Terraloon

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!

Interesting you talk about slow over technical laboured passing because that is exactly how I saw it. In the PL there is no doubt that professionals at the top of their game are able to move the ball and the opposition around but then , bang the space opens and play opens up. What we see at LC is a group of players who have been coached to a league and that league isn’t the championship. Norwich on the other hand are pragmatic and they epitomise the phrase “ play to your strengths “. Was the two draws the height of the new manager bounce ? Norwich were a pragmatic middle of the table Championship team . Yes they are on a decent run but in terms of results this season save the last 3 or 4 games their results were actually worse than LC yet they looked far superior. This really was a game where I thought we would see a change but it was the same. There is time to change things around but that window is slowly but surely closing. If and a big if Oxford are able to get a win at PNE on Friday they will go above Leicester and does anyone think there will be a win at Ipswich? I wasn’t looking down I kept looking at the clubs that needed to be overtaken and that number is slowly reducing but now Oxford are looking up and clearly have LC in their sights.!

Producing a near to accurate cash flow projection in football is in incredibly difficult.I only ever had input into a non league club whose dominant income streams were commercial ,gate and bar receipts and whilst a model using previous seasons averages was used a dip in form and a reduction in those that attended changed the numbers in a blink of an eye.In terms of commercial and sponsorship reduce the resources ( staff) employed getting out there to get entities to sign up and that income goes down even further. Even though additional income could be earned through transfer ( not that much ) or prizes in cup competitions was able to be earned those additional funds were very much treated as an unplanned bonus and formed a contingency fund , well that was the idea ! In other words they didn’t appear in the income projections . In terms of budgeting for wages that was incredibly difficult an injury to say one of your goalkeepers or sacking the manager for instance meant spending some of that contingency fund was inevitable, that’s if you hadn’t already spent it. And that was before things that you didn’t even think would go wrong did. For instance a safety inspection required more lighting or changes of signage.OK these things maybe weren’t that costly but if there isn’t any money in the coffers the costs significantly impact and as wages were the biggest single head of expenditure it was always there that realistically you had to make savings and so cash is even more stretched. Now I know that the sort of sums that LC earn is at another level but reading the clubs accounts and particularly the section which tells us how the auditors assess the clubs ability to carry on trading as a going concern what strikes me is that the club’s economic model is as we know so flawed as to be comical. So back to your comment around what sort of sums could / should be spent on wages where LC are so in terms of the starting number in income terms assumes a significant sum each season will be received by way of a transfer out. In simple terms the sums received for fees received need to match as a minimum the sum accounted for in terms of amortisation and them some. I am pretty sure that I would be able to get the numbers closer in terms of income matching expenditure and the normal assumption ( not in the case of LC) is the more you put toward your playing budget the better the return so by default that would mean even more cuts to the player budget but even using the infamous back of a fag packet calculations it’s abundantly clear that as the clubs income reduces in accord with the reducing sums that will be received from say parachute payments and likely reducing transfer fees received the % of that reduced income that has to be put toward wages has to reduce way below 50%. The fixed costs at LC will likely account for around 60% of cash received in season without parachute payments add in remaining amortisation and without massive transfer income there really won’t be much left for wages. This is a “ We’re doomed Captain Mainwaring moment “ we all know that there is absolutely no chance of promotion this season indeed, we are all looking downward as opposed to upwards and fast forward to the clubs that will be in the Championship next season, that’s if that’s where the club finds itself next season, the challenges will be I believe greater than this.

My guess would be that a lot of the sum reported is in respect of impairment or depreciation of tangible fixed assets along with other accounting tidying up. PSR/FFP won’t as a matter of course come close to the same result as the accounting bottom line . Without a lot more information it’s impossible to get close to assessing the impact but the suggestion is that they are relaxed about the impact

The first hurdle for the EFL to charge would be proof from the PL that they had started an PSR investigation whilst LC were still a PL club. That said if LC either failed to comply with obligations to supply projections, failed to meet deadlines , supply audited accounts or those projections were significantly incorrect then there would be a valid PL argument as to why any investigation wasn’t commenced. The PL fast track process was introduced in an attempt to deal with any PSR failure for say 24/25 in the 25/26 season and for cases that follow the defined process they have only been able to get one case , Forest, fully completed before seasons end. Everton 2 was largely completed but even after the IC had dealt with the substantive arguments there was still one aspect unanswered , it involved the treatment of interest on a loan and should that interest be a PSR allowable . It required a ruling from an accounting body (FRS) that took several months to resolve and certainty post the end of the season. The fast track process is the anticipated way in which the PL will proceed but it’s not the only process because at any point either party, the PL or a club, can make application to the IC to follow a different time line. It is impossible, even if projections have revealed a PSR breach, to state with certainty until annual accounts have been completed and undergone audit. The 24/25 PL Clubs, and as we now know Leicester included, will have been obliged to send their 30/6/25 ending accounts to the PL by 31/12/25 but at that point there was still a dispute between LC and the PL . That dispute wasn’t resolved until the recent IC ruling. We don’t know if LC maintained that they weren’t required to send accounts to the PL after ceasing membership. If they did well that would be a reason for delay and dare I say will almost certainly lead to another charge .Another and the main problem for the EFL would have been till the recent IC ruling has been confirmed at appeal it’s impossible for any charge for the 3 year period ending 30/6/25 to be made. One reason why I say that there is still a dispute around the 36 v 37 month period impacting 22/23 . Two final points . First. No matter how clear a rule book is when it comes to interpreting what is meant by something that is clear to one person but an other will argue that isn’t what is meant. I will give to a simple example. In our local car park there is a sign which reads “ Have you paid and displayed ? Penalty £60 . I think we all know what that means but one person who didn’t pay and got a PCN successfully appealed saying that had he paid and displayed he could have received a £60 fine. The local council’s argument was “ It was obvious “ But was it ? The lawyers earn big bucks for advancing arguments as to how using different arguments and rulings in different and usually non sporting matters as to how the rule book should, could or must be read . Ironically those same lawyers if they represented the other side would be arguing the polar opposite. The second is and it’s something that must not be forgotten that the PL / EFL indeed any European league that could provide a team to play in either the CL, Europa or Conference competitions had no option but implement cost constraints akin to FFP.

It’s sustainable because they have such vast income. In excess of £650m Pa so interest around 9% Try looking at LC accounts. In 23/24 from income of £105 m interest £14 m so I test around 13.5%.

The first thing that has to happen is the more important charges have to be proven. If and a big if all 115+ charges are proven then without doubt they will suffer a massive sporting sanction. The PL shareholders are the clubs and the majority won’t give a toss if Man City are either relegated or banished. There is absolutely no way that the likes of Sky will have any clauses around the clubs that make up the league nor will they be entitled to getting money back if a club falls foul of a PL disciplinary process.