New FFP rules

paddy20
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New FFP rules

by paddy20 » 29 Aug 2020 08:38

Apparently new rules have been agreed to assess profitability for FFP over a 4 year period instead of 3. with years 3 & 4 (19/20 +20/21)being averaged to equal 1 year

In year 17/18 we lost 21m
In year 18/19 we lost 30m
In year 19/20 tba
In year 20/21 tba
If my analysis is correct then we will be allowed to lose 39m and so far have lost 51m. So with this years results and next season we will need to make a profit of 12m to avoid penalties. With heavy losses predicted for last season this looks like an impossible task unless the Chinese owners really splashed the cask in an effort to get us promoted next year and thus avoid EFL FFP.
Please accept my apologies if these figures are not correct. It could be that some of the losses are allowable for example the training ground etc which may reduce those figures. I'm not an accountant so I'm sure there are those that will be able to give a more accurate summary

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Re: New FFP rules

by Millsy » 29 Aug 2020 09:21

Deserves new thread.

paddy20
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Re: New FFP rules

by paddy20 » 29 Aug 2020 12:21

Millsy Deserves new thread.


Sorry has this already been covered. Thought new rules have only just come out??

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Re: New FFP rules

by Nameless » 29 Aug 2020 16:35

paddy20
Millsy Deserves new thread.


Sorry has this already been covered. Thought new rules have only just come out??


I think your numbers are wrong, looks like you've looked at the wrong set of accounts. It's not the RFC accounts that matter it's the holding company.

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Re: New FFP rules

by Snowflake Royal » 29 Aug 2020 17:02

Although the picture isn't a great deal rosier.


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Zip
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Re: New FFP rules

by Zip » 29 Aug 2020 17:20

paddy20 Apparently new rules have been agreed to assess profitability for FFP over a 4 year period instead of 3. with years 3 & 4 (19/20 +20/21)being averaged to equal 1 year

In year 17/18 we lost 21m
In year 18/19 we lost 30m
In year 19/20 tba
In year 20/21 tba
If my analysis is correct then we will be allowed to lose 39m and so far have lost 51m. So with this years results and next season we will need to make a profit of 12m to avoid penalties. With heavy losses predicted for last season this looks like an impossible task unless the Chinese owners really splashed the cask in an effort to get us promoted next year and thus avoid EFL FFP.
Please accept my apologies if these figures are not correct. It could be that some of the losses are allowable for example the training ground etc which may reduce those figures. I'm not an accountant so I'm sure there are those that will be able to give a more accurate summary


We made a loss of £18 million in 2018/19.

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Re: New FFP rules

by Millsy » 30 Aug 2020 01:52

paddy20
Millsy Deserves new thread.


Sorry has this already been covered. Thought new rules have only just come out??


Yes I started a thread about this issue it’s on the first page.

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Re: New FFP rules

by 3points » 30 Aug 2020 09:04

Re the OP. The figures are way out. You need to look at the holding company accounts.

Take a look at the accounts analysis on the STAR website. That data was confirmed as accurate by the club.

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Re: New FFP rules

by SouthDownsRoyal » 30 Aug 2020 09:19

Well this is interesting


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Re: New FFP rules

by Sutekh » 30 Aug 2020 10:24

3points Re the OP. The figures are way out. You need to look at the holding company accounts.

Take a look at the accounts analysis on the STAR website. That data was confirmed as accurate by the club.


https://star-reading.org/news/2018-19-accounts-analysis

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Re: New FFP rules

by Mid Sussex Royal » 30 Aug 2020 10:36

Sorry I'm not an accountant - so basically can the owners do new share issues to inject cash each year and be within FFP?

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Re: New FFP rules

by tidus_mi2 » 30 Aug 2020 10:37

Mid Sussex Royal Sorry I'm not an accountant - so basically can the owners do new share issues to inject cash each year and be within FFP?

No, you can't use owner investment to bypass FFP

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Re: New FFP rules

by Sutekh » 30 Aug 2020 11:02

tidus_mi2
Mid Sussex Royal Sorry I'm not an accountant - so basically can the owners do new share issues to inject cash each year and be within FFP?

No, you can't use owner investment to bypass FFP


Disagree with that part of FFP. There should be a way for owners to invest as much as they want so long as conditions are applied to the “investments” to stop owners, for example, funding through mortgages and loans and not taking responsibility if they “over-reach” themselves.


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Re: New FFP rules

by tmesis » 30 Aug 2020 15:58

Sutekh
tidus_mi2
Mid Sussex Royal Sorry I'm not an accountant - so basically can the owners do new share issues to inject cash each year and be within FFP?

No, you can't use owner investment to bypass FFP


Disagree with that part of FFP. There should be a way for owners to invest as much as they want so long as conditions are applied to the “investments” to stop owners, for example, funding through mortgages and loans and not taking responsibility if they “over-reach” themselves.

Yeah. They should be allowed to put money in, effectively as 'sponsorship', but I'd ban the practice of loaning money to clubs. If an owner wishes to bankroll a club, he should do it knowing that the club doesn't owe him that money, and he can't claim it back.

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Re: New FFP rules

by Franchise FC » 30 Aug 2020 17:10

tmesis
Sutekh
tidus_mi2 No, you can't use owner investment to bypass FFP


Disagree with that part of FFP. There should be a way for owners to invest as much as they want so long as conditions are applied to the “investments” to stop owners, for example, funding through mortgages and loans and not taking responsibility if they “over-reach” themselves.

Yeah. They should be allowed to put money in, effectively as 'sponsorship', but I'd ban the practice of loaning money to clubs. If an owner wishes to bankroll a club, he should do it knowing that the club doesn't owe him that money, and he can't claim it back.

Been saying this for years and years
Non-refundable investment and should also need to deposit funds to cover any contract longer than a specified period (maybe, two years) so that they can't burden a club with long, expensive contracts without paying for it.
But that wouldn't suit the current 'big' clubs as it would allow competition at the top end

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Re: New FFP rules

by 3points » 30 Aug 2020 18:55

Mid Sussex Royal Sorry I'm not an accountant - so basically can the owners do new share issues to inject cash each year and be within FFP?

The owner has been buying the assets at a profit which creates headroom in the accounts under FFP (or P & S as it is now called). The share capital thing does help the club though. If he sells, then it isn’t debt that needs to be repaid by anyone It is up to the owner to decide if the amount the prospective owner is prepared to pay is sufficient. However, it shouldn’t be forgotten there’s still a lot of debt owed to Mr Dai

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Re: New FFP rules

by paddy20 » 31 Aug 2020 16:40

Ok. Using the financials from the holding company we lost 21m in 17/18 and 11.7m in 18/19. So for last season and this basically we have to break even still. Its very likely we lost a lot of money last season so this season we have to make the equivalent of the loss last season. How do we get out of that?

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Re: New FFP rules

by DelBoyRodders » 31 Aug 2020 16:56

paddy20 Ok. Using the financials from the holding company we lost 21m in 17/18 and 11.7m in 18/19. So for last season and this basically we have to break even still. Its very likely we lost a lot of money last season so this season we have to make the equivalent of the loss last season. How do we get out of that?


Player sales.
But our owner continuously blocks any sales.

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Re: New FFP rules

by Nameless » 31 Aug 2020 20:51

paddy20 Ok. Using the financials from the holding company we lost 21m in 17/18 and 11.7m in 18/19. So for last season and this basically we have to break even still. Its very likely we lost a lot of money last season so this season we have to make the equivalent of the loss last season. How do we get out of that?


Have you deducted all the allowances ? The FFP figure is not the same as the P&L

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Re: New FFP rules

by CountryRoyal » 31 Aug 2020 21:26

tmesis
Sutekh
tidus_mi2 No, you can't use owner investment to bypass FFP


Disagree with that part of FFP. There should be a way for owners to invest as much as they want so long as conditions are applied to the “investments” to stop owners, for example, funding through mortgages and loans and not taking responsibility if they “over-reach” themselves.

Yeah. They should be allowed to put money in, effectively as 'sponsorship', but I'd ban the practice of loaning money to clubs. If an owner wishes to bankroll a club, he should do it knowing that the club doesn't owe him that money, and he can't claim it back.


Agreed. It works for the big teams who get away with it.

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