Terraloon

I have just re read my posting and I must be thick! The last accounts we have seen were up to 30/6/24, not 30/6/25. So it’s possible indeed fa t that that debt to equity will reflect in the soon to be lodged accounts.

We need to wait a couple more weeks before we get sight of the ye 30/6/25 numbers but sorry unless the numbers have massively improved then debts are massive. From memory it’s circa £250 m which I believe, again from memory was after the equity swap which was said to have happened in Jan 25. We know not all the debt to KP has been wiped because for instance the stadium is subject to an HP agreement. The club own the stadium and indeed both training grounds but again without access to the accounts and or Land Registry records it’s difficult to get a handle on the here and now. Seagrave was financed with a close to £100m loan from KP. If and it’s an if, the cub goes into Administration and football creditors are owed then it will be interesting which takes precedence. Why I say that is because if Macquarie does then somehow all football creditors will have to be paid and if the club were to retain league status I think I am right in saying that all other creditors will have to be satisfied as well. There was a significant sum owing to the club but a fair chunk of that was, again as of some 9-10 months ago was sums still owed in respect of transfer sums still owed but as we know LC factored these out so the likelihood is that whist the debtors will still be shown the cash has already been spent. Finally I think you need to look at the Jan 26 charge registered by Macquarie because even when the 30/6/25 accounts come out I doubt the full impact and indeed current borrowing under that agreement will be clear.

So if the club let a player with sums still to be amortised go for free aren’t you reducing the book value ? You simply can’t under accounting process just write off the value of an asset without it impacting in the numbers and in every squad ratio calculation I have seen player trading and that includes both amortisation and impairment are factored into squad costs . Heres the explanation of the PLs rules Four primary expenditure types constitute the regulated squad costs. Wages and salaries: This encompasses the total gross compensation, including base salary, performance bonuses, and image rights payments, for all contracted first-team players and the head coach. Notably, the salaries of assistant coaches, medical staff, and administrative personnel are excluded. Amortisation of transfer fees: In line with standard football accounting, the cost of acquiring a player is not recognised as a lump sum in the year of purchase. Instead, the transfer fee is amortised, spread equally, over the length of the player’s contract, up to a maximum period of five years. Agent and intermediary fees: All commissions and fees paid to player representatives during contract negotiations or transfer transactions are included in the annual squad cost calculation. Impairment losses: If the book value of a player’s registration decreases significantly due to factors such as long-term injury, permanent performance decline, or the club’s relegation, the resulting impairment loss must be factored into the squad costs for that period. I admit I am not close to 100% of the EFL rules but unless impairment were factored into squad costs all clubs would do is write players values down to nil and they simply won’t do that Irrespective if transfer profit and loads is excluded in the 60% squad cap ( I think in year one for a relegated Championship Club it’s actually 75%) then no point selling anyone that’s any good.!

Morally, yes I know that’s a strange word to use when discussing football, there is absolutely no way that ST shouldn’t go down but, LC probably can’t afford to keep prices the same so will be increased. That is unless the club somehow cut costs by a vast %

A loss on player transfer value is factored into squad cost its called impairment which is treated in exactly the same way as amortisation.

There was no doubt that the points deduction on Luton was draconian but Luton’s issues at the time regarding entering administration on more than one occasion added to their seemingly lesser issues but the FA believed and so it turned out ,were able to be proven in front of an IC . That it is stated is where the PL believed their case against Chelsea differed. The second Chelsea fine came about not because of any complaint by anyone but it was the way in which a senior member of staff conducted themselves and it was their new owners that flagged up what had happened. I should add that there are still the 74 cases they have been charged by the FA and it was their new owners FA that deducted those points from Luton

Think you are wishing something that really isn’t going to happen.

It’s important not to mix up things that were done in accord with the rules ( no matter how wrong those rules appear) with things that weren’t right such as payments going to say player’s family via third parties. Sorry but I think you are maybe a little naive if you think that Chelsea are the only one that has operated in this way for instance Brighton not that long ago had to agree a settlement with the FA over payments . Football was ( not so much now) a cash industry in the day club after club understated attendances and had an illicit cash fund that was used to grease palms, pay players monies outside contracts often this was referred to as boot money. Nowadays it’s not so straight forward but it’s not just Chelsea that have used agents / representatives that aren’t registered or payments have been made via an account not under the control of the club. Its easy to point the finger at Chelsea and yes their new owners haven’t been able to explain why payments from Abromvich were made to , for instance, the owner of a club where they signed both Willian and Eto from or indeed other vast sums but the likelihood is that most if not all clubs have skeletons in their cupboards!

I would really recommend that people read the sanctions agreement the Chelsea case is a classic example where something is believed to be so but the evidence, yes evidence , has been assessed and said the advice is that’s unlikely to meet the standard to meet the balance of probability standard.In. Other words nothing is as clear cut as it seems. 1) We know that when Chelsea’s owners went through due diligence they discovered incomplete financial reporting. 2) It is said that none of the payments in question came from Chelsea’s bank account but came from a variety of Abromvichs accounts. 3) The PL tried to gain information/ context from 3rd parties that received monies but they wouldn’t engage. 4) The PL tried to gain information/ context from past directors and employees but again they wouldn’t engage. 5) The PL state that the new owners allowed the PL full access to historic records and even offered up possible but not proven explanations even to the point of those explanations being to the club’s detriment but in these instances there was nothing to prove or disprove their theories. I try to be fair minded in this and can’t but help feel that Chelsea’s owners have been very clever in all this. It’s easy to suggest that the PL have treated them in a preferential way but unless the settlement agreement isn’t accurate I somehow doubt even though they self reported ( they didn’t admit guilt as some have suggested) it seems to me that the PL were not able to prove and legal advice would direct them and the fact that a massive sum was kept back to settle regulatory offences committed under Abromavich meant that £10+ million was seems as a way to end it and those Chelsea owners weren’t paying that sum from their coffers!

There is no doubt in England Chelsea took it to another level but it’s worth looking at how clubs have operated in Europe and it was commonplace for the likes of Real Madrid to do exactly the same. I read an interesting article which weighed up the positives and negatives of signing players on long contracts and basically it can be argued either way but in the English football not 20 years ago it was rare to offer a player a deal over 3 years but transfer fee inflation altered things to a degree but wage inflation and the cycle that a 3 year contract bought about complicated matters even further.

If you look both internationally and indeed domestically Chelsea were no where close to the first club to sign players on contracts over 5 years. What is forgotten that club after club were and have amortised players fees for periods way in excess of 5 years even if the initial contract was only 5 years. There actually isn’t any accounting justification in limiting the time depreciation ( amortisation) should be over indeed it negatively impacts every club and by my calculations idc the inability of clubs to in effect reduce a players squad cost by extending the contract post 5 years will start to impact add to that if say you have amortisation costs for an extended contract over 5 years then those costs can’t be amortised for FFP purposes at all.

1) The registering of a further charge for me wouldn’t have been needed if the bulk of the 26/27 parachute payments hadn’t already been advanced. But you are right we can’t be sure either way. 2) I agree . Think some are in for quite a shock as to just how low in value the players potential fees have dropped 3) Again I agree . There is absolutely no way that commercial deals won’t reduce in attraction and consequently values will continue to drop 4) Time will tell but I suspect contracts when signed as a PL club the likelihood of LC becoming a EFL club wasn’t even in any ones wildest thoughts.

It appears to me that some still haven’t grasped the facts that there isn’t any rule ( save for those under 18) that stops you signing a player on a 10 year, 6 year or however a long a contract can be agreed between the club and the player. What is forbidden is that you can only speak the period over which a fee can be amortised. Similarly there is no rule that forbids a club from selling its stadium, its woman’s team etc . What is forbidden is that you can’t claim the income for PSR purposes.

You are right in one sense as we simply don’t know what the current state of the club’s borrowings is but who or indeed which even remotely well run entity would have the number or type of charges that currently are registered unless there wasn’t a need to generate immediate cash ? As for your analogy well if you can’t pay the loan on the £20k car you loose your house.

Many of these points have already been discussed to exhaustion. In accounting terms yes the parachute and indeed transfer instalments do indeed go to the club but my understanding is that the bank’s position is fully protected but the bulk, not all, of these arrangements aren’t loans they are factoring arrangements where in effect the “ debt / debts” have been sold on at a cost. For illustration only say £55 million was expected by way of 25/26 parachute payments around 10% would have been charged by way of fees / interest so the Aussie bank would only have paid £49.5 million to LC. There is an arrangement in place which isn’t secured against parachute payments or indeed transfer fees still to be paid which is secured against club assets and it’s this arrangement that in default would likely be the most damaging. The idea of parachute payments is indeed aimed at softening the impact of relegation but therein lies the problem at LC because all the money that should have eased the burden going into 26/27 almost certainly has been spent in 25/26. LC would be a big club in EFL 1 but you don’t get extra points or indeed concessions because you’ve got a top class stadium and training ground the massive decline in income would be catastrophic. Yes catastrophic.

I suggested a week or so ago people shouldn’t just be looking up but needed to watch Oxford

He at best is a championship player who is 30 years old and on a suggested £45k a week. Lets say he gets offered a 2 year deal at say Middlesbrough on £30k a week does anyone think he will just say ok ? No one is likely to pay much for him

I once played a game of Monopoly with my 10 year old nephew. I lost but still believe I am adequately qualified.

49 Forgot Charlton and Swindon

Has any one told them about being in the Championship Why is the partnership with Leicester City FC significant for the Malaysian market? A: This partnership brings a global Premier League brand directly to the Malaysian audience Source: https://www.outlookindia.com/xhub/e-gaming/8win-malaysia-announces-strategic-digital-integration-following-global-partnership-with-leicester-city-fc

Why would they ? They are no more than employees who, yes, are on top wages but they have signed contracts with a football club who knew exactly what they were doing albeit as we now know knowing and it being a wise decision by the club aren’t one and the same thing. This is probably yet another Catch 22 situation the club will finds itself . The bottom line in the accounts ending 30/6/26 probably won’t allow the club to impair any residue fee for those players who will have over 12 months on their deals come 30/6/26. Even those with no fee would almost certainly be looking for a significant settlement to walk away again those pesky accounts for 25/26 and likely 26/27 probably don’t have any room for manoeuvre when it comes to paying off contracts. The problem is compounded because some players whose contracts end on 30/6/26 include some that the club possibly want to be around next season and but as free agents would they want to sign a new deal certainly not in the EFL1. Then you have the possibility that the player will just laugh at the offer. Finally you have the likes of Monga who is still isn’t on a professional contract .He may well have agreed to sign a 3 year deal but as a Monga is a minor any application to a court to void such an agreement would almost certainly be agreed . Would he want to play in EFL 1 ? Would he realistically be well advised to hang around ? But then the bigger problem is that funds are so tight that every opportunity to save money has to be taken. Then you are looking at around 10 players whose deals end in either 2028or 2029.who would cost a fortune to pay off. As I say Catch 22!

Why wouldn’t I believe the accounts ? The only issue is they are some 20 months out of date. As for loans we know that KP advanced circa £94 m to fund the build we have no idea what is registered at the land registry

Sell for how much ? The latest accounts suggest that the value is around £100 m. Let’s say KP offered that sum . Firstly none of that income will be allowed for PL FFP or indeed the EFLs version. Chelsea got away with selling assets because it wasn’t against the PL rules as did Derby because it wasn’t against EFL rules. Both set of rules have now been amended so no it can’t be used to give a FFP boost . The sale would have to be for the sum shown in the accounts otherwise and difference would likely be adding to the losses. Then you have to look at the rental agreement. In that aspect it would have to be fair value so as a minimum imagine it would have to be close if not more than running costs and I would imagine that a sum would have to be included in the fair value calculations to factor in interest on the capital KP had to put forward to build Seagrave in the first place and all that is before you have to somehow deal with the circa £100 million loaned to build the dam place.

There is basically a route called pre packaged administration where in effect every thing is agreed before an insolvency practitioner(IP) becomes involved . There are of course politics in all this but ultimately the laws around insolvency apply to distressed football clubs That route would probably provide a perfect solution if the club wasn’t in such a mess and wasn’t under obligations with McGuire and KP that is. So much of the clubs future income to the club has already been spent. Anyone willing Administration is , well mad! Many of the IPs I knew would probably look at the situation and go straight for liquidation if for no other reason than the they would be unlikely to generate enough cash to enable them to pay day to day expenses during the administration period and continued trading probably wouldn’t We don’t know what the situation would be with regard to KPs loans or how they are secured against such things as Seagrave and the stadium and again back to McGuaire I believe their charge is a fixed and floating charge meaning if the club can’t pay they can take possession of goods and chattels. The reality is that an IP would be primarily concerned with creditors and the FA would be pressing for football creditors to be paid first.Where would the millions that are still owed for historical transfers come from for instance ? The cupboard is bare ! Players will be sold of course but in a market where a club is in financial difficulties fees offered will be negligible.if it comes t9 t( point where a certain number of paydays aren’t met on time players can leave for free under what’s called sporting just cause or come seasons end certain other players may well explore leaving on a Section 17 Webster . But all the while you have the EFL rules around Administration and almost certainly there would be a requirement for those creditors to be paid in full or as a minimum a payment plan in place before the start of the next season.Explusion would maybe lead to a new club but even that wouldn’t be guaranteed As I say anyone wishing for Administration is mad

Look at Oxford ! You can’t get past that if we are looking at the form guide for any sort of indication as to what’s going on then LC have the second worse in the league. Only Sheffield Wednesday are worse!