Leicester 'could face points deduction next season'

[CosbehFox]

1 hour ago, dylanlegend said:

Surely every other team is guilty of FFP breaches.

 

Chelsea, Newcastle, Man City, Man Utd, Spurs, Forest, Villa etc etc

 

theyve all spent big… we’ve actually had a decent income due to player sales. Maybe it’s the wages? But I don’t see how we are any worse than others.

 

Maybe the difference is we are actually honest when it comes to the accounts 

Majority of those clubs get more money from TV, ticket sales, merchandise sales etc 

[Aus Fox]

4 minutes ago, ClaphamFox said:

What we've spent this season has zero bearing on this story because the period under discussion ended last June. This is what Jordan Blackwell wrote in the Leicester Mercury yesterday:

 

"LeicestershireLive understands that City’s 2022/23 season accounts will be released publicly towards the end of this month. They made losses of £125.5 million for the first two seasons of the three-year cycle, meaning that they need to make a profit of £20.5 million not to exceed the £105m limit."

 

So we need to have made a healthy profit for the year 2022/23 to avoid being in breach. I'm personally very sceptical that we achieved this. If you think otherwise, please reveal more - lots of people would love to be reassured about this!

 

[ClaphamFox]

Just now, Aus Fox said:

 

Ah. Your reference was clearly too subtle for me...

[dylanlegend]

34 minutes ago, fox in the sox said:

Most of those teams are on a totally different level in terms of revenue, sponsorship, ground size, merchandising etc. We reached a level way above our size and the wages required to keep the players at that level are too much. Forest are the nearest to our size but they have only been promoted recently so their wage structure will be very different to Leicester who were in Europe and regularly towards the top of the table.

So basically the gap between the bigger teams and smaller teams widens even more… well done FFP 👏🏻

 

But teams like Villa, Newcastle….

 

Theres no way they’ve been able to sign all those players and pay the wages without breaking FFP. Main source of income (for FFP purposes) is TV revenue so not hugely different to us. What the others do os give themselves huge sponsorship deals to make our their income is more, pay consultancy fees on top of wages etc etc 

[CosbehFox]

14 minutes ago, ClaphamFox said:

What we've spent this season has zero bearing on this story because the period under discussion ended last June. This is what Jordan Blackwell wrote in the Leicester Mercury yesterday:

 

"LeicestershireLive understands that City’s 2022/23 season accounts will be released publicly towards the end of this month. They made losses of £125.5 million for the first two seasons of the three-year cycle, meaning that they need to make a profit of £20.5 million not to exceed the £105m limit."

 

So we need to have made a healthy profit for the year 2022/23 to avoid being in breach. I'm personally very sceptical that we achieved this. If you think otherwise, please reveal more - lots of people would love to be reassured about this!

Bad journalism that - financial results are different to FFP PSR calculations. 

 

The £105m limit refers to PSR calculation/allowance - that is not the same as the financial accounts. Merely the accounts give a guide before its put through the PSR calculation. 

[Babylon]

18 hours ago, Lambert09 said:

To be fair to the club, the goal posts were moved in an attempt to stop clubs like us challenging. We created a new wage structure to secure our assets and make us competitive.  Then FFP came in and it’s obviously very hard to then go back on that structure. Yes vardy gets 125kpw but you need to come in on 20k. 
 

FFP was designed to put clubs like us in our place. So i’m not fully blaming the club for not meeting it. 
 

We wouldn’t have signed anyone last year but due to desperation had to throw money at souttar, VK and tete in an attempt to survive. 

 

Take the points deduction and get on with it 

Bingo. 

[Babylon]

21 minutes ago, ClaphamFox said:

What we've spent this season has zero bearing on this story because the period under discussion ended last June. This is what Jordan Blackwell wrote in the Leicester Mercury yesterday:

 

"LeicestershireLive understands that City’s 2022/23 season accounts will be released publicly towards the end of this month. They made losses of £125.5 million for the first two seasons of the three-year cycle, meaning that they need to make a profit of £20.5 million not to exceed the £105m limit."

 

So we need to have made a healthy profit for the year 2022/23 to avoid being in breach. I'm personally very sceptical that we achieved this. If you think otherwise, please reveal more - lots of people would love to be reassured about this!

That's absolute muck, you can write off plenty of the "losses" as not everything counts towards FFP. It's such a beyond-stupid calculation by them, entirely missing the basics of FFP. 

[coolhandfox]

7 minutes ago, CosbehFox said:

Bad journalism that - financial results are different to FFP PSR calculations. 

 

The £105m limit refers to PSR calculation/allowance - that is not the same as the financial accounts. Merely the accounts give a guide before its put through the PSR calculation. 

Correct, people struggle with this.

 

 

[coolhandfox]

Just in case people are wondering “healthy” expenditure i.e. allowable deduction included:

 

Depreciation of tangible fixed assets

New stadium expenses

Other amortisation

Youth development

Women’s football

Community development

Promotion payments.

 

 

[Babylon]

7 minutes ago, coolhandfox said:

Just in case people are wondering “healthy” expenditure i.e. allowable deduction included:

 

Depreciation of tangible fixed assets

New stadium expenses

Other amortisation

Youth development

Women’s football

Community development

Promotion payments.

 

 

Plus Covid, I'd have to check, but I think that's in the calculations for one more yeear until 20/21 drops out? And Infrastruture, so loans to pay for Seagrave potentially out of the equation. 

Edited 5 March by Babylon

[CosbehFox]

13 minutes ago, Babylon said:

Plus Covid, I'd have to check, but I think that's in the calculations for one more yeear until 20/21 drops out? And Infrastruture, so loans to pay for Seagrave potentially out of the equation. 

Which is one of the reasons I think it's going to be tight. Creative accounting possible around something like that. Also noise that Everton have difficulty trying to persuade PL that some loans they have taken on are in relation to the new stadium. 

 

 

[CosbehFox]

38 minutes ago, dylanlegend said:

So basically the gap between the bigger teams and smaller teams widens even more… well done FFP 👏🏻

 

But teams like Villa, Newcastle….

 

Theres no way they’ve been able to sign all those players and pay the wages without breaking FFP. Main source of income (for FFP purposes) is TV revenue so not hugely different to us. What the others do os give themselves huge sponsorship deals to make our their income is more, pay consultancy fees on top of wages etc etc 

Villa are close. But it's gone relatively under the radar - they brought in a decent sum of money selling off their younger players which is another benefit in the FFP box. Lots of rumours in Birmingham that the pause in extension to Villa Park is that the owners would need to take out loans for liquid cash - (okay they get away with the investment on FFP but it would stretch other parts of the club). 

 

Newcastle have made decisions affected by FFP - see ASM's sale to Saudi and throw in a load of CL cash. 

[Babylon]

11 minutes ago, CosbehFox said:

Which is one of the reasons I think it's going to be tight. Creative accounting possible around something like that. Also noise that Everton have difficulty trying to persuade PL that some loans they have taken on are in relation to the new stadium. 

If I was a betting man, I'd say we make it... but there is going to be an argument again about what does and doesn't count. 

[Monk]

If this did happen I’d rather take the hit now and take our chances in the playoffs than have it at the start of a prem season. 

[David Lowe]

5 minutes ago, Monk said:

If this did happen I’d rather take the hit now and take our chances in the playoffs than have it at the start of a prem season. 

There will not be a deduction this season but I disagree anyway. It gets very difficult if you stay down for too long which could happen if we went into the play-offs.

[ClaphamFox]

7 minutes ago, Monk said:

If this did happen I’d rather take the hit now and take our chances in the playoffs than have it at the start of a prem season. 

Maybe we can argue that our three recent losses on the bounce effectively amounted to a voluntary points deduction and ask if we can leave it at that?

[Gamble92]

I think all this proves not sacking Rodgers was seen from a purely financial point of view. The margins for making the profit needed must have been so slim. They thought we could just about do it with him still in place then sack him.

 

I genuinely think if we'd stayed up Top would have put us up for sale. He will do in the summer regardless

 

[Matt]

People go on about Villa’s sales then when countered go on to say wages have screwed us, I couldn’t see us signing a player for around £17m on £125k p/w (apparently) only for them to play 22 games like Villa and by the way has anyone googled Villa’s apparent wages? 
 

Eyewatering.

[The Bear]

Yeah Villa's wages went from £137m to £194 in 22/23. Massive increase in player amortisation too. 

 

As I said they'll be close to the limit same as most clubs in the Prem now. 

[pkonline]

We don't know the details or even if this is an issue, so a little premature some folk having a meltdown on here and social media.

 

The same moaners now are the ones who also moan when we don't sign anyone - which we haven't been able to last few windows because of FFP compliance!

 

Remember, we breached FFP with Vichai in 2013/14 and were fined so things were not all that rosy back then.

[coolhandfox]

3 hours ago, Babylon said:

Plus Covid, I'd have to check, but I think that's in the calculations for one more yeear until 20/21 drops out? And Infrastruture, so loans to pay for Seagrave potentially out of the equation. 

For the 21/22 monitoring period, the PL assessed the seasons 2019/20 and 2020/21 as a single (average) period to minimise the impact of COVID-19.

 

So they end up going 208/19, (2019/20 and 2020/21 combined), 21/22.

 

I assume for the 22/23 monitoring period its back to normal so 20/21, 21/22 and 22/23. 

 

If you refinanced to cover the loan for the Seagrave, that would be included in the new calculation. Loans are where it gets tricky, as you have to prove what they are for and whether they are covering good expenditures. 

[coolhandfox]

3 hours ago, CosbehFox said:

Which is one of the reasons I think it's going to be tight. Creative accounting possible around something like that. Also noise that Everton have difficulty trying to persuade PL that some loans they have taken on are in relation to the new stadium. 

 

 

From what I can gather loans were from pre-planning permission, so can't be included in FFP, cost can only be include post planning be granted.

[Ric Flair]

22 hours ago, Lambert09 said:

To be fair to the club, the goal posts were moved in an attempt to stop clubs like us challenging. We created a new wage structure to secure our assets and make us competitive.  Then FFP came in and it’s obviously very hard to then go back on that structure. Yes vardy gets 125kpw but you need to come in on 20k. 
 

FFP was designed to put clubs like us in our place. So i’m not fully blaming the club for not meeting it. 
 

We wouldn’t have signed anyone last year but due to desperation had to throw money at souttar, VK and tete in an attempt to survive. 

 

Take the points deduction and get on with it 

I'm not so sure, we'd done the damage in terms of our wage structure before FFP was altered. We are victims of being successful, then after having steadied the ship we went on to challenge the elite again and got caught up in trying to keep up. We've been financially snookered for the last 2-3 years as a result.

[Babylon]

3 minutes ago, Ric Flair said:

I'm not so sure, we'd done the damage in terms of our wage structure before FFP was altered. We are victims of being successful, then after having steadied the ship we went on to challenge the elite again and got caught up in trying to keep up. We've been financially snookered for the last 2-3 years as a result.

It's up for debate as to why they changed the rules (again). But it most definitely had an impact, and those of UEFA. Without the rule changes we had far more room to manoeuvre. The spectre of having to reduce wage to turnover from UEFA to 70% was a death knell to our model. Straying from the model to back Rodgers and then buying a load of crap, was the nail in the coffin. 

[Ric Flair]

5 minutes ago, Babylon said:

It's up for debate as to why they changed the rules (again). But it most definitely had an impact, and those of UEFA. Without the rule changes we had far more room to manoeuvre. The spectre of having to reduce wage to turnover from UEFA to 70% was a death knell to our model. Straying from the model to back Rodgers and then buying a load of crap, was the nail in the coffin. 

Yes, these new rules are harsh. However, at the time it seemed to impact us in 2022 it was only relevant to those who qualify for Europe. We hadn't done at that point having finished 8th and although we harboured ambitions to be back there ASAP, our wage bill was not sustainable even on the old rules (UEFA or otherwise). We essentially had to qualify for Europe every season to maintain the wage structure and have a bit of wriggle room for new signings.

 

I've little sympathy for us, we made many mistakes. I didn't like our change in approach to what we'd been successful at in the first place.