Terraloon

By appealing against the points deduction LC have re opened up scrutiny of not only how the case was concluded but above all how IC arrived at the points deduction.The PL didn’t need to lodge an appeal against the points deduction because it was pretty much assured that LC would The PL will repeat their arguments re points deductions and as I said whilst to date an IC hasn’t increased a points deduction it’s not forbidden. In effect the appeal IC like many ICs before can and possibly will amend the initial award. The appeal panel has the power to do so. Most journalists are only looking at the PLs appeal which is not suggesting any further points deduction but my guess would be that they believe it should have been assessed as an aggravating factor as a minimum The appeal panel can amend the ICs award as it thinks fit and that could mean a complete rewrite of their findings bear in mind the PL could easily argue about the process being independent and any points increase came about because of LC appeal they, the PL, were only appealing against the non award of a sanction re the non submission of the accounts.

My thoughts going back some weeks ago were that there would be 6 points but I voiced my concerns around three factors 1) The size of the breach 2) The failure to submit the end of year accounts 3) Failure to co operate Having read the ICs written reasons it’s pretty clear that the £20+ million excess was viewed as significant ( which of course it was) . In terms of the next 2 charges against LC were proven with ease. Cities claim that they co operated was fanciful. It is fact that to date no club has ever had their points deduction increased following their appeal but it’s not a rule that forbids such an increase but it’s a possibility. It’s worth remembering that the charges were under the EFL rulebook where there are clear guidelines as to how many points should as a starting point be deducted and taking those guidelines into account then the entry points deduction should have been 12 points . The argument around improving numbers attracted a 1 point mitigation so based on the PLs take the points lost should be 11 but then their argument would be that the failure to assist and failure to send in accounts should add to the points deducted. The IC concluded that the points deduction guidelines should be adjusted to the % excess over the upper limit of EFL allowable of £39 m. If a clubs allowable was ( LC was £83m) in excess of £39m . In those guidelines if the excess is over £15m then the entry point should be 12 points. Why I personally have concerns that this adjustment is potentially flawed is simply this that no where in the EFL or come to that PL rules are they adjusted to %.Put another way if say a club with a 3 year turnover of £39 m exceeded the allowable sum by £39 million they would have the same starting points deduction as a club whose 3 year turnover was £130 m who exceeded by £39 million. . No where in the guidelines does it say the guidelines should be converted to % . Add to that there was a allowance granted following the IC ruling was dispute as to what length the three accounting ( periods) should cover .Due to a step taken by LC whereby they extend the accounting year 22/23 to cover a 13 month period an action that enabled them to avoid 22/23 charges The PL argued that the excess should be measured over a 37 month period( 3 accounting years ) which in turn have been increased the excess by circa £3m which in turn even using the ICs adapted sanctions chart would lead to extra points deduction I suspect that LC will repeat many if not all the arguments it put forward at the original hearing. I suspect that they will be unsuccessful. As I keep saying it’s the PLs appeal that worries me. I can see why the PL will argue that conversion to a % of excess against the staring point was flawed likewise not assessing over 3 accounting years even though they were 37 months is likewise flawed.

As I said the PL appeal worries me . The PL won’t necessarily be arguing for the case to be re run but will solely focus on sanctions applied whereas LC will almost certainly be trying to open up again the arguments already ruled on both concerning jurisdiction and authority but if, no ,when they loose yet again those arguments which I suspect even the legal team will be anticipating, then they, LC, will try and get the 6 points reduced. But that’s where it goes back to the PL appeal because as I keep saying the two minor charges have been proven and whilst they might not in themself lead to additional points deductions they will be arguing as a minimum the 1 point mitigation will be removed but just as likely they will be wanting the way in which the IC calculated the 6 points.

Some weeks ago I floated the notion that potentially taking the matter to appeal and maybe even arbitration could result in the matter being kicked even further down the road.We now come to the stage where I think it’s likely until LC appealing is rule on the points may well have to be reinstated You will have seen that the PL are pushing for this to be in effect fast tracked to ensure the matter is resolved asap

It is but as I have just posted the behaviour and actions of lack of them should be treated as aggravating factors. What that means that the entry point of 7 points should have been increased and not reduced as has happened

To be fair it’s a valid question but as I said some weeks ago proving the charges that weren’t the main FFP charge, should probably have been taken as aggravating factors which in themselves probably wouldn’t lead to a points deduction but as a minimum should have led to 7 points and not the 6 the sanction was mitigated down to.

The appeal by the PL worries me. They the PL are arguing that to not punish the two proven offences 1) Failure to Supply accounts & 2) Failing to co operate could be used as a precedent going forward I have to admit I was surprised that the IC allowed mitigation but didn’t see failure to co operate as an aggravating factor which my guess is that is the main point of their appeal. Make no mistake the PL will be arguing for over 6 points and LC appealing was inevitable but having read the written reasons I can’t see the clubs appeal being successful.

Bear in mind that he was in charge for effectively 12 months at Oxford and in the 50 games in that 12 months the win rate was 28%.His total career has yielded a 39.8% win ratio . At this point in time talent alone won’t be cut the mustard what will secure safety is guts, determination and dare I say experience.I actually think that the younger players who so many have faith could be negatively exposed to the point where it could damage then going forward. LC have at this point in time let the second most goals in and those defensive issues won’t be sorted with the same personnel.

It does sort of make sense but I can’t get away from the fact that once it had been decided to sack Cifutes then an appointment should have been made immediately. The remaining 10 weeks of the season will see 14 “ Cup Finals”. I think however there are six in the next 23 days. My point here is that won’t be a lot of time to work on anything between games. Yes there will be a few tweaks that will have to happen immediately but working on simple things like set pieces and triggers to press take time add to that particularly over the next 23 days recovery and travel will occupy a significant proportion of the time that he will have to work on anything.. I personally have little to no expectations that anything will materially change . Hope is one thing and you can only wish him well but as I say we will know an awful lot more after the next 6 games and those games were always going to be particularly challenging no matter who was in charge.

Been thinking about him and indeed Monga, and yes there will be others, players who aren’t yet able to sign longer term contracts than 3 years. Their early progress to first team football will I believe potentially be more a negative long term than a positive. Top category academy after academy have had their 16/17&18 year olds poached because clubs like Chelsea , City and Utd will be having a word in the ears of these players agents and whereas LC will be offering say £3k a week those clubs will be talking about £10k or even more. Sadly, but understandably, no young player with ambitions and options is going to choose to play in the Championship or even less likely EFL if they can increase earnings and exposure at a higher level . Sentiment is one thing but these youngsters will, when on international duty, be mixing with fellow youngsters whose wages will be multiples of what LC can pay and the agents of these players will be nagging away . Even worse is that the big clubs won’t be paying the big bucks to non PL clubs for academy players with relatively short term contracts indeed those contracts in a blink of an eye are down to two then one year without the security of long term contracts the club will be put behind a rock and a hard place.Bear in mind compensation outside of England is multiples less .

Yep the piggy bank is likely not just been emptied but smashed in case a £ was hidden away You think that anyone that buys them will be paying for it all up front ? Ok that’s when you Macquarie come into play but as we know at considerable cost. Likewise my guess is that when they were bought in it was on HP so from any feesLC receiver the club would have to pay any balance still outstanding so maybe not the same sum accounting wise but almost certainly will amount to millions As you say it is the norm that they on deal in sure bets but have a look at the charge they registered in January. This isn’t the first time that LC have had a line of credit with them. I thought when you said this : “They’ll raise £40m which should stave off the pain of being non compliant next season.” you were talking about FFP compliance.

The top ones will likely leave if the pathway isn’t to PL.

As I pointed out on another thread Macquire registered a further charge on all the clubs fixed assets in January. This was because, it seems, that another line of credit has been opened. This one isn’t based on transfer fees or parachute payments it’s effectively an overdraft. I have no idea of what the limit is or indeed if any of the sum , has been drawn down but the charge in default allows them the ability to take control of land , stadium etc. Selling El Khannouss will need to factor in that around €13m o still to be amortised meaning if say he is sold for say €25m the profit will only be €12 m . As for Fatawu again a chunk of his fee still has to be amortised circa €10 m selling him for €20 will only deliver €10 m profit add to that there would be a number of clubs holding their hands out for training compensation . There were add ins when he signed and whilst mention was made re add ons nothing was published about a % of any profit. My point is if £40 m is raised in fees ( which I doubt) for the two my guess it wouldn’t yield over £20m of profit

Think you over estimate the value of what assets the club currently owns outright. In Jan 26 that Aussie firm lodged a charge against the clubs fixed assets . The charge is related to a borrowing facility being put in place. Now we don’t know how much, if any of that facilities been drawn down nor will the 24/25 year end accounts tell us much more but the rumour was that cash flow is said to have been an issue and the actions re staff pay around Christmas may have been coincidental but there again it may not be ! Someone would need to take a look at all the paperwork lodged both in the clubs internal accounting records and indeed documents at say Land Registry to fully understand just how well KP have protected their “ investment “ Because protect it I suspect they almost have. It will be interesting to see if there has been any player values impaired in the accounts to 30/6/25. There should be but even then no club is going to go big for any of the current players even the promising academy players won’t bring in close to some of the estimates I have seen some placing on them. The club isn’t cash rich, I am not sure it’s close to asset rich. The current book value of Seagrave of circa £100 m an asset that will only have marginal depreciation to date is massively over it’s realistic value and as I said the other day the project was funded by way of a development of £91 loan from KP. We don’t know exactly what loans have been converted to equity but we do know that any outstanding loans can be called in on 12 months notice.

Of course you will need to get funds together to just start up but to a degree that’s putting the cart before the horse. The first thing that needs to happen is that there needs to be early stage planning and working out what the process and indeed requirements are just in terms of starting up. From working with respective leagues establishing what entry league any Phoenix club could start and matching that with a ground of acceptable grading and of course having talks with whoever owns that ground re ground sharing. Next structure in terms defying roles and appointing individuals search out best practice ( no point in re inventing the wheel) . This is just a guess but to start up a club at say level 5or 6 you would need circa £50k minimum but even at that level you would need to generate at least £2k a week . The more that you can offer players then even at that level you will have some reasonably wealthy individuals willing to throw money at realities success. Way above my pay grade to head such a venture but having read some posters on here it’s pretty clear that there are the skills out there

My theory is that he had his contract paid up by Newcastle and has put himself in the shop window at LC with a view to getting a deal for 26/27. The benefit to LC if I am right is that he isn’t costing anything.

For the avoidance of doubt

It’s expensive of that there is no doubt but £15 m is incredibly wide of the mark . Between half and a third of that sum

Of course the fortunes of KP and the club are linked and if KP fails then it’s inevitable that the impact on LC will be catastrophic as would relegation to Division 1. The reality is Seagrave is not affordable and yes it might develop academy products but sadly even the cost of the academy will probably not be affordable if there’s a relegation and certainly not if LC energy any type of insolvency event. As to what would happen if the club went into administration, God forbid, then it would set of a sequence of events that won’t be as straightforward as “ LC fails, debts written off, KP gone, new club formed all are happy. Unlike many clubs that sadly go into Administration any practitioner dealing with LC wouldn’t be able to look forward to getting monies owed for parachute payments or money from transfer fees still due as we know that’s all been received and most likely spent. So yes there would could be a fire sale and the administration would focus primarily on creditors and shareholders. There wouldn’t likely be any surplus to fund a new club because after paying off football creditors, and of course other creditors any surplus goes to either the FA or local sporting entities and I doubt that a to be formed club would qualify for a portion of any final distribution. I have talked about before, is the ownership of the stadium yes LC own it but are buying it from KP. What is the situation when it comes to Seagrave? . The funds to develop came from KP are KP able to call in ,on 12 months notice , all sums owed by City to KP. KP suffering an insolvency event would inevitably lead to those debts being called in. Those sums are so large that much would have to written off . Players values in an administration would be minimal, realising sums due from debtors wouldn’t be great ( see comments around transfer fees and parachute payments ) So to those that think all that would happen if LC or indeed KP went into administration would be a points deduction they need to think again .

Sadly no matter what those that are fanatics and not just fair weather supporters ( sorry for that term) will turn up but the reality is that a significant % go because supporting a successful football team makes them feel good and when that same team is in the doldrums they don’t just stop going they quite often blank all matters re the club. The sadness is that in terms of a town, a city a community having a successful football team does more for a feel good feeling in those environments than just about anything else sadly the concern is that at this point in time LC is a major point of division and contention also there is no doubt that some people’s mental health is being negatively impacted. Its hard for those that follow the club through thick and thin to understand why some can’t match their level of support but that’s where we are and although subjective I would imagine that the “ fanatics” are by and large of a significantly older age profile meaning that unless they are replaced in the fanatical group by younger supporters at some point , unless success returns, the core numbers of those that attend no matter what will diminish.

Edit I would add that the last number I saw in terms of the cost of the KP was also around £5 m pa

Not affordable for a Championship Club. The suggestion is that the average income of a Championship Club is £30 million. If you extract the amount included in clubs income attributed to parachute payments my guess is that it’s nearer £20 million. Let’s be generous and assume once all parachute payments have been received by LC that the annual income is indeed £30 million there is absolutely no way the club will be able to afford the estimated £5-6 million cost of a training facility

Been looking a little deeper into this The clubs administrative cost went up from £17.5m to £22.3 m. a rise of £4.8 m in 2021. The clubs explanation said that the costs were down to 1) The opening of Seagrave and 2) An increase in rates following withdraw of the removal of some of the Covid Business Rate discount which at most I believe would have been at most £250k . So I think fair to say that as a minimum in 21/22 the cost of Seagrave was a minimum of £4.5 million Since then as we all know from our own household expenditure every thing costs more . From an employers perspective the additional NIC and increases in wages will have added a further chunk. I am revising my guess as to how much Seagrave is costing in cash terms to between £5&6 million PA.

One thing in life I have learnt is never say never. To re purpose the Seagrave site to say housing would be incredibly difficult. When it comes to planning on a site where there are playing fields means that Sports England has to be consulted and unless either those pitches haven’t been used in the last 3 years or there are plans to replace them in full and on a location nearby then Sports England will also set certainty object and that would in all likelihood mean planning would not be granted. Returning to running costs and staffing London lionesses, a standalone WSL team, have submitted plans to built a training ground . It will be amazing of that I have no doubt but won’t be the same size or standard as Seagrave but my point here is that their planning application includes the statement that they will create 50 full time jobs.

If you read my posts over the last few months I have been talking about running costs.They will have to be cut and cut dramatically The other day I was trawling back through some of the closed years accounts and it’s quite interesting how some of the little snippets contained therein are quite frightening. Not just that but what they tell us it tells us that when the spending on transfers and wage growth got out of control the clubs “ ambitions” simply couldn’t be funded from the reality small income streams that a non PL club generates and even if in the PL without a significant transfer fee each year LC simply can’t afford the type of luxury facilities that Seagrave offers up.But it goes deeper in that to maintain two training grounds isn’t just financial madness it smacks of poor planning in that to have planned for just one site ( maybe different buildings on the site ) dealing with all teams would have bought about significant economies of scale . Back to those snippets. A sum of circa £91 m by way of loan was provided by KP for construction costs in respect of Seagrave construction costs. The club clearly haven’t been in a position to pay down debt so either that has been swept up in the sum Top has written off or that debt is included in the sums still owed. In terms of running costs of Seagrave we simply can do no more than guess the numbers.KP charge interest small sums on their loans , but charging and being paid aren’t one and the same nor are the sum in the accounts necessarily the same as will have to be shown in FFP submissions . If you work on the basis that say a nominal FFP charge of 3% and that £91m is still owed there’s a £2-3 m charge in those submissions even if those sums aren’t the same as reflected in the accounts or ever likely to be repaid. As for selling Seagrave the ship has pretty much sailed unless there is some way around the new squeaky PL rule re selling assets but as we all obviously know the league the club plys its trade is under the jurisdiction of the EFL where such transactions have been banned for many a year now. I am far from sure that Belvoir can be sold from a FFP perspective, the time to have done that was when Seagrave was delivered( see above) when no questions at all would have been asked. In those snippets in the accounts you can track for instance the massive increase in energy consumption by the club. Prior to Seagrave it was circa 12.2m KwH the latest published accounts that consumption was just under 17m KWH. I can’t see that there is a statement as to how much of that is gas or how much electric. Being super conservative just on energy consumption my guess is that there is around a £500k increase in energy costs my logic is all , well most, of that is a Seagrave cost. I asked a contact of mine who is involved in a semi pro team how much the budget/ spend maintaining their one pitch he excluded man power costs and machinery hire and he estimated around £6k. I challenged him because that seemed massive and of course the 21 pitches at Seagrave will be maintained to a far higher standard and of course there will be economies of scale he included watering costs, annual refurbished costs etc. Add in a staff of at least 10 grounds people and at least another 20-30 to maintain, clean and service the facilities themselves then you must be talking of at least £1.5 million Business rates were something I mentioned the other week and add to those costs the water bill for the building, the insurance costs and that’s another £1 million minimum. There will be lots of other costs such as refuge disposal, window cleaning, TV licences etc etc . In themselves relatively small sums but collectively they are going to add at least another £100k So back to the question how much does Seagrave cost ? My best estimate would be £3-4 million in hard cash terms rising potentially to £5-6 million if you have to factor in the interest I talk about. For perspective going back a few years ago the club used to tell us how much the stadium cost ( they no longer do ) pre Covid that was around £5 m