The FFP thread

[originallambrettaman]

The £13 million only applies if the owner or someone else agrees to buy more equity in the club. Acun has to cover the losses with shares he buys or someone else buys. Agreeing to lend the company money to cover losses isn't permitted. If Acun is willing to buy £35 million worth of shares in City we can lose that amount over the next three years. If he doesn't buy or sell more shares our annual losses will have to be more modest. No wonder we're having meetings over ffp.

Losses last season alone..

Fulham - £94.4m loss
Bristol City - £38.4m loss
Reading - £35.7m loss
Middlesbrough - £30.8m loss
Preston North End - £13.5m loss
Millwall - £13.1m loss
Cardiff City - £11.2m loss
Hull City - £8.15m loss

 

[originallambrettaman]

The clubs that fell foul of FFP did so with quite some style, nobody knows quite how bad Derby's were as they stop filing accounts, but Reading made operating losses of £43.5million, compared to £40.7million the previous year, while accumulated losses totalled £138million.

 

[SydneyTiger14]

Unless it was due to be paid over in a period greater than 3 years, it would be irrelevant anyway,
wouldn't it?. Any add-ons for Bowen would be additional income in the period it was triggered though I'd have though.

Yeah the add-ons was something I brought up today as that's definitely additional income as it wouldn't be recognised when the original transfer takes place.

 

[SydneyTiger14]

Losses last season alone..

Fulham - £94.4m loss
Bristol City - £38.4m loss
Reading - £35.7m loss
Middlesbrough - £30.8m loss
Preston North End - £13.5m loss
Millwall - £13.1m loss
Cardiff City - £11.2m loss
Hull City - £8.15m loss

This is something I was trying to get my head around today in the discussion, plenty of other clubs are racking up debts but don't seem to be running into trouble with the EFL and I'm not quite sure why.

 

[Shark Sports]

I'm not sure it's been mentioned but Tan confirmed that the Nwakaeme deal has collapsed.

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So who knows if Lue is right about the FFP

 

[SydneyTiger14]

I'm not sure it's been mentioned but Tan confirmed that the Nwakaeme deal has collapsed.

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So who knows if Lue is right about the FFP

If he's right and it's for the reason Orange suggested (that his contract would put us over in the next two years) then we're not making any more signings that would exceed the value of his contract for the next two years.

So basically, no.

 

[Shark Sports]

If he's right and it's for the reason Orange suggested (that his contract would put us over in the next two years) then we're not making any more signings that would exceed the value of his contract for the next two years.

So basically, no.

I haven't read all this FFP thread but I had a quick scroll and didn't see it.

Lue is somewhat reliable but I certainly wouldn't trust everything he says

See who these next 2 signings are

 

[SydneyTiger14]

I haven't read all this FFP thread but I had a quick scroll and didn't see it.

Lue is somewhat reliable but I certainly wouldn't trust everything he says

See who these next 2 signings are

The suggestion that Nuakeme's contract would have put us over the 39m loss cap once our profit two years ago rolls out next year. Would mean we're not making a single other signing without any sales.

I thought perhaps there was a wage limit like in the PL but there isn't.

 

[originallambrettaman]

I'm not sure it's been mentioned but Tan confirmed that the Nwakaeme deal has collapsed.

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So who knows if Lue is right about the FFP

He claimed that the deal was all agreed and would go ahead once we've resolved FFP issues, but the deal's not going ahead due to daft player demands, rather than any FFP issue.

 

[Trumpton Tiger.]

I'll throw my hat into the ring and say we were expecting to move Wilkes on and that hasn't happened.

 

[Obadiah]

This is something I was trying to get my head around today in the discussion, plenty of other clubs are racking up debts but don't seem to be running into trouble with the EFL and I'm not quite sure why.

It seems the punishment comes when the EFL decide. I expect there would be discussions with the clubs first about how much equity they are going to put in. Stoke's owners have converted loans into shares in the past to avoid penalties.

A quite look through Google show a number of clubs are worried about facing points deductions this season.

For ffp the losses may be less than reported as there are a number of items of expenditure that can be written off to reduce the losses. How much a club pays for its academy is one.

 

[cheshireles]

I think you're misunderstanding what I'm saying mate, it's not that the receivable is all booked in the year it is recognised, it's the income.

Income is recorded when the service is performed or the goods are exchanged. When we sold Bowen in 2020 we would have booked his transfer fee as revenue received then and there, regardless of when the cash was received.

The discussion was regarding FFP and the calculation of our profit/loss. For any such calculation, KLP's fee would be recognised as having been received within this year, as we have sold the player to Brentford. If a business sells someone a TV or any good on credit, they don't recognise revenue for that product for the x number of years it takes for that person to pay it off. They book the revenue when the product is sold, and then write off the receivable as the cash is received.

I'm not misunderstanding anything, that said seems that what you've just stated amounts to what I'm saying, we're just using different words. I'm not getting into the semantics.

Bit like Ernie Morecambe and Andre Previn........As Eric said, I'm playing all the right notes, just not in the right order!

As for FFP I've not made any comment about it!

 

[SydneyTiger14]

I'm not misunderstanding anything, that said seems that what you've just stated amounts to what I'm saying, we're just using different words. I'm not getting into the semantics.

Bit like Ernie Morecambe and Andre Previn........As Eric said, I'm playing all the right notes, just not in the right order!

As for FFP I've not made any comment about it!

With respect, you stepped in to correct me when it sounds like I was saying what you were from the start - as I've not changed what I said - so I do think you were misunderstanding.

The point about FFP was that was my original context for explaining that revenue is recorded in the year of the sale, regardless of when the cash is received.

 

[jhe10]

I think you're misunderstanding what I'm saying mate, it's not that the receivable is all booked in the year it is recognised, it's the income.

Income is recorded when the service is performed or the goods are exchanged. When we sold Bowen in 2020 we would have booked his transfer fee as revenue received then and there, regardless of when the cash was received.

The discussion was regarding FFP and the calculation of our profit/loss. For any such calculation, KLP's fee would be recognised as having been received within this year, as we have sold the player to Brentford. If a business sells someone a TV or any good on credit, they don't recognise revenue for that product for the x number of years it takes for that person to pay it off. They book the revenue when the product is sold, and then write off the receivable as the cash is received.

You've been sydsplaining to everyone how FFP works regarding transfer income, and getting quite smug about how you understand it and no-one else seems to. Except I think you're wrong. Clubs have the choice of treating transfer fees as income in the year received or amortised over the length of the contract according to the UEFA FFP rules which cover European club football. As far as I know the EFL sets the FFP limits (i.e. £39m over 3 years) but not the nuts and bolts of the accounting rules which are set by UEFA. This article explains the rules, it took me 5 seconds to Google it.
https://www.linklaters.com/en/insig.../player-transfers-ffp-and-the-break-even-test

 

[cheshireles]

With respect, you stepped in to correct me when it sounds like I was saying what you were from the start - as I've not changed what I said - so I do think you were misunderstanding.

The point about FFP was that was my original context for explaining that revenue is recorded in the year of the sale, regardless of when the cash is received.

I corrected you originally because what you stated at the time was categorically wrong! Back to semantics. Last response on the subject from me, it's bloody boring!

 

[SydneyTiger14]

You've been sydsplaining to everyone how FFP works regarding transfer income, and getting quite smug about how you understand it and no-one else seems to. Except I think you're wrong. Clubs have the choice of treating transfer fees as income in the year received or amortised over the length of the contract according to the UEFA FFP rules which cover European club football. As far as I know the EFL sets the FFP limits (i.e. £39m over 3 years) but not the nuts and bolts of the accounting rules which are set by UEFA. This article explains the rules, it took me 5 seconds to Google it.
https://www.linklaters.com/en/insig.../player-transfers-ffp-and-the-break-even-test

The length of what contract? The player is no longer at the club. The length of his contract with his new club? And if they sell him after a year? Not sure that makes much sense. Sorry if that's 'sydsplaining'.

Your link also says nothing of the sort. The amortisation is the purchase fee, not the selling fee. The two scenarios both indicate that selling the player results in the income being recognised in that period. The difference is in the treatment of the purchase price. It took you 5 seconds to Google but perhaps you should have spent more than 5 seconds reading it and jumping in here to try and one up me.

 

[Mckechnie Orange]

If he's right and it's for the reason Orange suggested (that his contract would put us over in the next two years) then we're not making any more signings that would exceed the value of his contract for the next two years.

So basically, no.

LUE suggested it was FFP,. Not me.

I am suggesting we have had meetings over FFP with the EFL for a reason as has been confirmed.

What reason, we don't know yet.

 

[balkan tiger]

FFP it's all a load of bollocks.

Go to the top of this page (6) for the definitive answer.

 

[Mckechnie Orange]

The length of what contract? The player is no longer at the club. The length of his contract with his new club? And if they sell him after a year? Not sure that makes much sense. Sorry if that's 'sydsplaining'.

He's effectively saying we could either book all the KLP fee as profit for FFP in the year sold, or book the income as we receive the payments. That was my understanding but it doesn't change anything because there's pros and cons to doing either, we can't do both and the contracts we're handing out exceed the fee over a number of years anyway.

 

[SydneyTiger14]

. Sorry les! Don't want to go back and forth. Hope you're well.