Terraloon

Home grown players have zero value in the accounts it’s why when you sell one of them their fee is all profit. Every year the director are meant to take an informed view of values in terms of book value( players you have paid a fee for ) and then if it’s less then they write off the difference. It’s called impairment

Friday nights out for me are not good. In the day I could sink a decent volume but nowadays! Anyways last night we talked about all this and a couple of lads were surprised with my view that the PL did have authority in this matter. I a not sure I convinced them but here’s my thoughts. Forget anything else at this point but focus on the fact that as at 1/4/23 LCFC were most definitely a member of the PL. On 1/3 23 all PL clubs have had to send in accounts for T-1 2021/22, T-2 2019/20 + 20/21 averaged The third period, T , would be impossible for LCFC indeed most clubs to send accounts in for so by 1/3/23 in accordance with Section E 45.2 of then22/23 rulebook clubs have to send in a forecast of the current trading position including a balance sheet etc On receipt of that information by 31/3/23 if the PSR ( estimated) losses are over £105 million then at that point even though they, The PL, will almost certainly try and delay any charge till the submission of final accounts the club are considered to be in breech of PSR for 22/23 on 31/3/23 . People asked how the PL would know to charge without accounts well my guess is that within a small number it would be pretty easy to estimate the accounting impact over the last couple of months Now you come to the question of jurisdiction be it the PL and or in the case of a relegated club the EFL. PL Rule E74 makes specific reference to who will have jurisdiction. The inference is that it will be the PL but if the EFL and PL agree then the dispute can be transferred to the EFL . My guess would be any such application would be down to the club . I might be reading this all wrong but I wonder if LCFC want the EFL to rule on this simply because if all goes well the EFL sanction can’t be applied if promotion is achieved

This post is perhaps the most relevant I have read for many a year. The irony is that despite what many think the same comment re breaking business and accounting rules in particular apply to most of the indiscretions that all clubs seem to be charged with. As I was always told targets drive behaviour. All that was needed and still is a straight forward rule at seasons end the accounts can never show ( save normal trading creditors and even then no payables overdue by say 60 days ) borrowing should never exceed say 15% of turnover and even then a limit is set at seasons start as to a maximum based on previous years average. Debt is the devil in football and not investment

* Club ownership in Germany isn’t consistent. The 50%+ 1 isn’t the model in place at all clubs. Three of the 18 member clubs are owned by companies. One ironically is Bayer Leverkusen. One or two others only have a very limited number of members I can’t recall which one it is but one club NLS has 20 or so members who pay huge sums annually. This supposed perfect structure is said to be changing ! * Unlike inEngland the national professional structure is terms of number of leagues is way less . The Bundesliga don’t put anywhere near the amount the PL do I to their pyramid * BM have won 32 of the 60 league titles.

The EFL are projecting that in 23/24 there will be a overspend I can’t find the details immediately but I believe they are projecting an overspend of £83 million Initially they wanted a business plan to be submitted in October 23 . The infamous case that Leicester won wasn’t bout the right of EFL to ask for such a plan but the timing. I would imagine the passing of-the 1st March is a key point

I don’t know why people keep saying this there is a clear and defined process to deal with both relegated and promoted clubs.

The IC almost certainly hasn’t been formed yet let alone being into a position to start assessing the evidence Charge issued 21/3 there are then 14 days for a response which is 4/4 even assuming no allowance is allowed for Easter. There will the be a directions hearing, that will set a timetable. Documents will be exchanged , date set for hearing . Hearing , time to reach a conclusion time to prepare written reasons, time to edit them after reference to the club etc. Without an accelerated deadline this won’t be settled this side of June

Sadly that’s not correct. When a team is relegated or come to that promoted to or from the PL if both leagues agree then the other can be responsible for progressing the discipline case.

What is hurting and hurting not just Leicester is the fact that a lot of the clubs that seem to be in the mire will have advanced cash flow by way of loans from commercial lenders These lenders don’t just advance a pound or two it’s tens if not hundreds of millions. The rates they charge are circa 4-6% above base rate of 5.25%. Everton for instance borrowed £150 million from just one lender to fund working capital and not stadium build costs in effect with a turnover of around about £180 million they will for that just loan circa £15 million pa then add to that other loans they have at one of their supporters quantified their interest costs alone at £42 million a year. Not sure of the extent but there are 10 charges registered by Macquarie Bank shown against Leicester by this company but let’s just assume it matches the same £ as Everton’s.

That was a FIFA matter nothing to do with spending, FFP or the PL equivalent

Rolloing year to year

It’s actually not If promotion is achieved there currently ( unlike the EFL) isn’t any restriction in terms of you can be charged year on year and not just once in any three year cycle it’s the situation that Everton now find themselves

Nor dare I say is that strictly correct either. We have absolutely no idea what they self reported nor do we even know which regulatory body will or is taking the matter forward. Brighton only last season self reported and were charged by the FA for incorrect reporting of sums paid to agents yet they were only fined and didn’t have their PSR submissions re worked. Nor is their any suggestion that City will have theirs re opened indeed there is a view that to do so creates a double jeopardy Cities PSR charges revolve around third party investment and not around breeches of the £105 million which I believe if sums were deducted from their income and sums in respect of players wages and managers contracts added on

I read yesterday that in Chelsea’s 21/22 accounts which showed a significant loss and based on that many have suggested that there is a need to generate the sort of profit you talk about were two significant issues which potentially are their get of jail card 1) £76 million for player Impairment ( this was the most ever sum and thought to be either a COVID allowable or a exceptional sum insisted on a s part of the sale. ( this followed a£17 million sum in the previous years accounts that will be deducted) The £76 likewise could potentially be discounted for PSR purposes 2) There is a £40 million provision for a historic legal matter which will likely again count as an exceptional item and deducted The problem we are all in is that the statutory accounts only give us a hint of what the PSR submissions look like as we even in a normal year don’t know for Chelsea indeed the majority of clubs how much healthy expenses account for ie academy, ladies, depreciation of tangible assets then you have COVID deductibles in 21/22 ( the last year) then you will in Chelsea’s case have to factor in the things I mentioned above alongside income losses that were quantified due to impact of sanctions and the suspension of sponsorship deals . In cities case you are right that it’s far more complex and it’s really worth reading CAS written reasons when they adjudicated the UEFA charges. UEFA really thought they had enough of a case but ( and City fans just won’t accept) is that UEFA had one version of damming emails but really needed the original string of emails but UEFA gave up chasing them and that was a mistake because CAS simply wouldn’t or should I say couldn’t under Swiss Law make any conclusion based on that refusal whereas under English Law they can. City aren’t assisting it seems in any way indeed they took the question of arbitration to the High Court and had their backside kicked. They have delayed, challenged and clearly not assisted but their charges don’t fall under any sort of accelerated process so every time they fail to submit a requested document they refuse so you then get into another delay. My guess is we are now at the point that the IC have finally been left no choice but to set a hearing date but as anyone involved in litigation will tell you legal arguments and preparation of bundles is no small job and when you consider Everton’s first charge resulted in 11000 documents then it’s pretty safe to assume in Cities case it’s going to be hundreds of thousands they all have to be read and all are open to challenge At the end of the IC it’s likely , no certain there will be an appeal and even then their is a possibility of arbitration and or further reference to the High Court on a point of law.

All clubs that are members of the PL have to be registered as a company limiting liability there is no dictate, yet, as to the date when a clubs accounting period ends although for convenience many end on 30/6. The reason for that is many but one simple on is that players contracts, save those on short term deals end on that date. In effect Leicester for all intents and purposes remained a premier league club as a member till 30/6/23 and shareholder until 13/6/23 when the share as transferred . If you look at both organisations (EFL&PL) rule books it is for they to decide which takes forward discipline matters post the end of the playing season/ accounting period when a club is relegated. It isn’t a grey area indeed just suppose that this matter was taken forward under EFL rules they are far more stringent and only allow an excess of £13 million per season not £35 million . As I said yesterday on first read on the clubs statement I thought it was challenging the PLs authority but on second read I don’t think that is the case at all.

At no time during the 22/23 year was LCFC a member of the EFL . That is the whole point

In season there is a requirement to file information akin to audited accounts which I would imagine LFC complied with that would have given the PL very much the heads up and I would imagine those projections told the PL everything that was fequired

How can it be abuse of process if it complies with the PL 22/23 rulebook ?

The 22/23 rules were definitely in place the accelerated process wasnt hence why the PL say the timing is something the IC will take responsibility for.

Any points deduction won’t be in this season there is absolutely no way that the process could be completed that quickly.

Love it or hate it the PL do have jurisdiction for the 22/23 season even after clubs were relegated. The PL statement makes reference to their inability to deal under the accelerated procedure but I agree that the accounts weren’t due at the PL till 31/3/24 so don’t know what to make of that Edit the submissions date in the 22/23 handbook was 1/3/24 . So it’s that date by which the accounts had to be sent to the PL

The first part of that statement is a matter of fact but no where in the statement does it say that the charge is contrary to the PL rules

Sorry by default if not a PL club an EFL club charged under EFL rulebook when that rulebook makes it 100% clear where jurisdiction lies

It’s worth re reading the statement . My first reading of it suggested to me that there was a question over the legality of these charges but I don’t think it is doing anything else other than put a marker out there.

Some years ago QPR managed to avoid EFL sanctions because they had been promoted their case was only dealt with when they came back down. In both the EFL and PL rules on this clubs that get promoted/ relegated remain under the jurisdiction of the league for the year of their accounts. In other words Leicester would be measured against PL criteria contained within the 22/23 Pl rule book. That in essence was the case we recently were learned about however it was made clear that the accelerated process in the PL 23/24 rulebook wasn’t something that could apply to Forest but charges under the PSR ( (PL) process could.