Terraloon

I was broadly neutral when it came to relegation. Indeed a good run ( ok I know) even with a points deduction could see LCFC pull away . However more likely is that points deduction coupled with a bad run could see relegation a real possibility. Now however having listened to that interview the feeling that the club is in free-fall is beyond doubt but the biggest thing for me is two fold the chaos and the denial. The club are rudderless and For instance the comment that it’s all down to relegation that there was a charge but we know that the 22/23 PL season should have resulted in a charge let’s not forget that season incorporated seasons of PL football and income. I am now 70-30 thinking a relegation will be the result of the 25/26 season .

A lot won’t but there a was a stat doing the rounds that something like 98% of youngsters in academy football never get to play in a first team game.

Worth a read of this because being a Cat 1 really is advantageous https://thepfsa.co.uk/understanding-the-english-football-academy-category-system-under-the-elite-player-performance-plan-eppp/

Having a Cat 1 academy enables clubs to cast the net but LCFC in my mind can’t / don’t operate in the same way. Only today Chelsea spent £500k on a youngster . Watching that game tonight I would say that at best a couple of Leicesters players may be ready for at best a loan at say National League possibly EFL 2 level whereas. Chelsea had several players who are ready for EFL loans possibly even at Championship .

The question that needs to be asked first is what sort of budget there will be. No I am not talking about players coming in the budget I am talking about how much is left in the pot once the compensation for yet another “ failed “ HC is funded. what’s it going to cost ? Two million plus would be my guess. Very few decent “ fire fighter” type of managers/ HC will come cheap and it’s unlikely that there will much , if anything in the kitty, for whoever to bring in more than maybe a token signing and yep that possibility of a points deduction. Of course there was a need for change but does anyone think that there is a plan in place ? I don’t !

The league table doesn’t lie and Oxford are where they are for a reason. LCFC have to win against this type of opposition but as we know they didn’t. Look to the games at Wrexham, home to WBA what we witnessed there were two games where no points were deserved based on performances .

On one hand the number of players out of contract at the end of the season will help reduce the wage bill, possibly! But the negative , and a big one in that, is that almost certainly the case that none of the players whose deals end at seasons end will have had discussions with the club about an improved contract and with things being as they are I very much doubt any have even had any talks about extensions even on lesser terms. What that will mean is that you have a significant number of players who know they dont have a future at LCFC past this season and probably are sending out feelers via their agents. With the crowd on their back, a HC who can’t motivate them , and the ongoing concerns about the FFP charges must be a bundle of fun being a player at LC .

I went to the dentist yesterday morning for a filling . The injection wasn’t pleasant and I was delighted when it was all over . Bet you are better off from knowing that. Last night I watched the game , it wasn’t pleasant and I was delighted when it was all over. Watching shouldn’t be a chore it should be enjoyable but did anyone feel anything other than miserable after watching that pile of sh1*? A draw wasn’t well earned it was more to do with Wrexham not being able to finish LCFC off. Exactly the same as the WBA game. Moore terrorised the two CD in the air. Their players just looked like players fit for the championship they were stronger, more aggressive and were far more motivated. Ok there was a point gained but everything we see , everything we believe leads us to know that this team isn’t going to get promoted and if they manage to even get into the play offs it would be akin to a miracle

Comparison wise yes you’re right but when historically when amortisation was around 5 times the amount taken in match day , more than commercial and match day combined, then the cost of transfers like many things be it wages, amortisation, training ground costs they are simply far more than than LCFC can afford

It’s possible , just that a possibility but now more than that, the IC may be wanting information re 24/25 because they will be considering trends as part of claims to mitigation or come to that aggravation but the IC can’t make any rulings around 24/25 simply because the club haven’t been charged.

Let’s not kid ourselves that be you a fan or not LCFC like all clubs have to work within the FFP/ PSR framework. It’s futile to argue about how unfair it is or how it works to the advantage of one club or another’s disadvantage we are where we are. Laws are rarely as clear cut as some think they should be. The amount of time spent trying to argue even just what someone that scripted a rule meant by a specific word , can often take hours of research particularly looking at how a specific word has been interpreted in the past. Any one whoever has had to seek legal opinion will know that there is absolutely no guarantee that the opinion you are given isn’t necessarily how the “ other side” will have been advised or indeed how an advocate will rule on the matter. Don’t get distracted by the question of jurisdiction or other legal opinions this all comes down to a club LCFC , spending sums which they did knowing that the numbers didn’t add up. The appeal against the question of jurisdiction according to arbitration panel was determined incorrectly . The two sides , LCFC & the PL both argued their case that the appeal panel either did or didn’t arrive at their decision perversely from a LCFC perspective the got the rub of the green for 22/23 particularly as there was an overspend that probably would have resulted in a points deduction. As I say don’t get distracted this is all about the numbers.

Of course it’s a conversation point but there is absolutely no way that you will find out precise details of who gets paid what nor indeed how their remuneration package is put together. Personally I think that’s only right. Does the player get a % paid by way of image rights? Are there individual bonuses for say appearances, goal scored signing on fees or what about benefits in kinds as a consequence of say the club paying agent fees or what a club car , provision of accommodation flights home or maybe even relocation payments over a certain level. The press in particular love to add to the number but still no one has a clue save those personally involved have a handle as to the exact numbers but often the ball park figures published by Capology are said by some to be the best source. I personally am far from sure they are any more reliable than Fred down the pub who has guessed! Even reference to the accounts will only give you an idea of a clubs expenditure on squad wages . Very few clubs will tell you anymore than the total company expenditure on wages . Included in the total wage spend will include everyone on a clubs payroll from groundsman to the person in the club shop but even then it’s not straight forward when comparing on a club by club basis because some clubs hire contractors or outsource tasks like upkeep of pitches, stewarding and some clubs because of their deals with sponsors don’t even run the clubs retail outlets. At the moment initially only UEFA and no doubt at some point both the PL and likely the EFL will follow are adopting a far more relevant measure called Squad Ratio Costs (SCR) which will focus on how much a club is spending on players and certain support staff. The new UEFA approach does to a degree include debt. There are four elements that are included in SCR: 1)Wage costs 2) Amortisation 3) Impairment 4) Agent fees. For me in the case of LCFC I would guess that if you want to get a ball park figure of the sum the club is spending on players try this calculation but it will only tell you historical numbers 1) 80% of the total wage costs as per the accounts. The suggestion by some is this is as good a % to be used. Again who knows . 2) Player Amortisation and impairment as per the accounts 3) Agent fees . These numbers are published annually by the FA around mid Feb. The last numbers published for the year 24/25 for LCFC was the best part of £10 million.

The accelerated process is a PL “ rule” and whilst it is the PL prosecuting the FFP charge the case is under the EFL rules therefore LCFC find themselves answerable and directed under those EFL rules where the accelerated process is not part of their rules. The arbitration ruling is relevant and LCFC agreed to that process ( they had no option but to) and as much as we might want to feel that that question of jurisdiction I don’t think that the arbitration panel left any area of doubt in their rulings As for guessing how long a commission will take is nearly impossible indeed simple little things like a commission members illness, holiday,, commitment elsewhere or maybe they are looking at the claims to aggravation and mitigation after they have reached decisions regarding guilt or otherwise all could be part of the reasons.

Of course it’s subjective as to if there’s a delay but under the PL accelerated process there are timelines/ expectations. For instance the requirements are that even any appeal is to be dealt with meaning from charge to settlement of appeal is to be dealt with in circa 20 weeks. We are now closer to 35 weeks since charges laid. The question of jurisdiction re 23/24 has been settled at binding arbitration . I don’t believe that the IC are in a position to revisit that ruling so save the question re non submission on time of accounts not sure that that the ability of the PL to brings charges will stand up to any challenge. The limitation act is of course factored in PL disciplinary matters but the fact that the case is in train mitigates any concerns re timing. Not sure how there is any way other way in which this type of case can be dealt namely retrospectively but even if this matter went to appeal and or possibly arbitration it almost certainly will be settled in another 35 weeks after the IC announcement ( guesstimate) this matter will not / cannot go further Once an IC is set up they very much become independent Counsel will of course be discussing matters with the PLs in house teams but just like the city case the PL won’t post the hearing have any involvement till the commission reports. On that City commission their task is far far more complex if for no other reasons than there are 115+ charges each having to be explored both at commission and explained and ruled on in their orc publication. LCFC charge will of course revolve mainly around the 23/24 numbers ( I don’t believe jurisdiction will be up for debate) then a very simple question of was they a requirement to submit accounts to the PL as per the PL rules and the third charge re failure to co operate normally would be discussed once a charge had been proven.

Could pick this apart without an awful lot of effort to be honest .

I understand it all too well. What would the spending cap you propose be based on say in the championship? If you arent going to have clubs with greater income allowed to spend more then you have to set the cap at the club with the lowest income level. In 23/24 Oxford Utds income in the championship was £8.44 million. You ok with it being set at level ? What was LCFC wage bill in 3/4 £100+ million ? Edit. You added to your earlier post so I will add further. You talk about fixed squad cost. How would you determine the level on a league by league basis ? If you reduce the level based on debt as you suggest ( sounds reasonable) isn’t that removing that level playing field ?

In terms of argument as to an offence has or hasn’t been committed ( crude way of putting it ) I don’t think there is much doubt based on the numbers we have seen in the public domain. It’s an argument that transfer spend has been reduced and maybe the IC will accept that steps have been taken. Everton tried to argue roughly the same when it came to mitigation but the difference here is that almost certainly the 22/23 cycle would have resulted in a charge for Leicester had there not been an issue re jurisdiction but that didn’t stop LCFC spending on 5 players in 23/24. Mitigating and aggravating matters will be factored in of course when it comes to sanction, if indeed there is one , and without a tariff table any sanction will based very much on how the individual IC members feel . If I had to bet as to why there is a delay I would say two things to those that compare time lines with the Everton and Forest charges. Firstly their cases were dealt with under the accelerated PL rules. LCFC case isn’t Secondly both Forest and Everton, albeit in the Everton case very late in the day, admitted they had broken FFP rules.I suspect that isn’t the case in the Leicester charge.

What you suggest would be a recipe for financial meltdown I apologise for what is going to be a very long comment. Here we go! Let’s look at 1.On the face of it sounds fair enough but look at how many clubs have been built the club based on owners cash injections and then bang they the owners either can’t afford, don’t want to carry on injecting cash or they pass away.? In a way it seems to many that may be where LCFC find themselves now. What we have at the moment is far from satisfactory but limiting owner cash injections to a degree has restricted clubs vulnerability going forward.Look at what’s happening even now at Sheffield Wednesday there will always be examples where clubs still get into financial difficulties. If you took away all limits and controls in terms of owners believe me we wouldn’t just be witnessing the odd club going into administration you would see clubs suffer full blown insolvency. It actually might suit some owners to see the demise of a club. Owners injecting cash through equity increases the % of shares that benefactor owns. Majority shareholding of say 51% is one thing.When a shareholder gets up to 75% or over that enables special resolutions to be steamrollered through. Once the ceiling of 90% is broken through then the owner can effectively do what they want and any remaining shareholders have no choice but to relinquish their share. Whilst there are constraints around developing on a clubs ground mainly driven by input from Sports England property developers will be out there looking for opportunities. Prior to the introduction of financial regulation in football it was commonplace for the HC ( High Court) to be presented with literally dozens of WUO( winding up order) monthly. In the main these WUO came as a consequence of HMRC not being paid for PAYE/NIC and VAT. Clubs used sums owing to aid cash flow. I don’t know if you have ever had any dealings with cash flow but for a business like football it’s incredibly difficult to keep a handle on matters. VAT on certain transfers, vat of gate receipts all have to be paid indeed some times even before payment has been received.Wages have to be paid irrespective of the income delivery and with that tax and nic becomes payable even if there isn’t money in the bank and very quickly one outstanding debt becomes two outstanding debts then three and so on. HMRC do have enforcement powers but very few clubs have assets enough for the tax authorities to secure the debt against tangible assets that can be seized and sold at public auction.So ultimately as one months debt stacks up on top of the the previous months unpaid liability . That was commonplace around 2003 It came to the point where compliant clubs , those clubs that did pay their liabilities on time, were being impacted because they more often than not lost out in terms of promotion/ relegation to clubs that had injected significant cash suddenly hit the financial buffers when that cash was no longer available( see above) those non compliant clubs didn’t face any footballing consequences for their reckless approach . Even entering administration did little to nothing as most assets were either owned by or subject to a charge held by the owner or by a company who knew that at some point they would turn a profit down the line. The governing bodies panicked and had no choice but to introduce penalties for clubs that suffered an insolvency event but that wasn’t enough it was felt that the governing bodies needed to put into place some sort of early warning system and with it try and put brakes on reckless spending. Hence why clubs now have to provide advance financial information and if those projections suggest there will be issues then that’s when you get things like transfer embargo’s . Previously all they had to do was provide annual accounts. It might not be evident but the number of WUOs has reduced dramatically as a consequence of the financial contrails now in place. Stability of contracts is massively under threat following yet more involvement of the European courts. Bosman was bad enough, Webster less so but what clubs are now potentially going to have to face is players exercising close to the same rights as any other employee is other industries in that they will be able to say bye and walk for no fee . I didn’t say that clubs shouldn’t be able to have loans that they couldn’t afford . You stated that clubs that are financially challenged shouldn’t be able to pay for a loan. My point was let’s say club a) has a player they want to put out on loan and there are say two clubs that would like to take him on loan and fit the criteria playing wise. One isn’t allowed to pay a fee because they are under financial pressure the other can pay something. Who do you reckon that player will go on loan. Thats enough for today from me . Have a good weekend, we’ll not too good !

What would constitute an overspend ? An accounting loss would you make allowances for “ good spending on things like infrastructure? Seems to me you are advocating 1) Keep a version of FFP. Particularly the requirement to produce and live within an agreed business plan. 2) Ignore FIFA regulations around stability of contracts 3) Set conditions that would almost certainly mean no club would ever allow a player of theirs go out on loan to the struggling club I think what you have demonstrated is that there are massive issues whichever or whatever method you try and adopt to try and keep clubs financially stable.

A club that’s squint is usually because they have spent more than they can afford . Often spending without any fear of sanction not caring about how the supporters or owners of other clubs that live within their means feel or even trade. Of course the entity should be impacted as I said in an earlier post I would relegate as a matter of course any club that suffers an insolvency event. Most clubs historically that got into problems do so because they overspend on players wages. What then happens the clubs owners start to juggle with debt often however it’s the taxman that used to go to the bottom of the list. So how would you deal with clubs that have overspent ? Or would you be ok with such clubs just carrying on regardless?

Some of this I don’t believe you are 100% correct The ground according to the last accounts ( yes they are over a year out of date ) wasn’t at that point paid for by LCFC it was subject to an HP agreement with KP. The accounts in question state that the balance owing at that point circa £26 m has to be paid in full by June 26 You say that PSR is basically legalised cheating yet it was the clubs that voted for it but your point about spending more because of bigger revenues not quite sure that really makes sense because the allowable losses at all levels are the same for all clubs within their respective leagues. There is a valid argument that the allowable losses should be a % of turnover as opposed to fixed numbers the fact it isn’t gives a greater advantage to clubs with smaller turnover You then talk about all clubs having the same salary cap and spending limit but how would you determine the cap ? Would you be ok with say LCFC only being allowed to spend the same as the lowest income generating club in the Championship? Bear in mind that it no doubt costs far more to run LCFC than it does say Oxford but how would that play out if spending was equalised ? Maybe if we want a truly competitive competition should the cap be based on a Div2 club ? I personally think that any club going into administration ,(do we mean standard administration or a pre packed type ?) shouldn’t just face automatic points deduction they should be relegated.

Chelsea were by no means the first team to amortise a players transfer fee by a period greater than 5 years .Indeed all players that signed a second contract when the initial one entailed a cost had their fee amortised over a period greater than 5 years . Interesting fact is that players that signed say 7 year deals in accounting terms nothing changes because under accepted protocol amortising the fees over the contract period won’t change what has is the numbers being submitted for FFP/PSR purposes. It’s going to be impossible to just look at the accounts and transfer the numbers to our bag if the packet fag packet PSR calculations If you look at football certainly Europe wise where big fees were involved clubs have used contracts in excess of 5 years for many years.It happened when clubs like Real Madrid, Barcelona & Man Utd signed players and I believe Newcastle were among clubs that did likewise For me this rule change was a knee jerk and at some point those that heralded the change will realise it will impact them negatively. Its important to recognise that sums amortised don’t just include transfer fees it also includes all sums that have been incurred and that includes sums paid to intermediaries. So say you signed a player on a 5 year deal on a fee of £20 million and after 3 years the club / player agree a new 5 year deal then the annual sum of the fee history would reduce from £4 million to £1.6 million over a new 5 year period plus 20% of the intermediary fee whereas now that £4 million won’t change plus 50% of the intermediary fee. Agreeing a long term deal which probably includes triggers for improved terms and conditions will likely in the long term save significant fees paid for agreements to extended contracts.

It is.

Haven’t tried to find loopholes? What is realistically a loophole? This is where I have a problem . If the rules state you can’t do something then that’s clear but if those rules don’t exclude something then when someone or some entity does something that’s allowed then good on them. Were LCFC using a loophole as you call it to in effect to gain an accounting years grace or was it simply LCFC using the rules to their advantage? People will then start to talk about spirit of the rules and all that but when it comes to the PL had the shareholders ( the clubs ) felt strongly about say selling hotels, woman’s teams etc it was in their gift to change the rules.

Separated Not many clubs realistically do impair values often because they , the directors overvalue a players worth indeed over the last couple of years most clubs show little to no sum. During Covid Chelsea showed impairment of players registrations over a couple of years by just under £100m. I have no idea what the justification of them claiming so much but I do wonder if they were able to set some if not all that enormous sum down as Covid losses. Arenal had a player Pepe , signed him for €65 m on a 5 year deal but after 4 years they let him go on a free the balance due of his fee that was left to be amortised was shown in their accounts in the impairment numbers.