Relegation, League 1, financial implications

[Stadt]

27 minutes ago, Terraloon said:

I have to put out there that I haven’t had time to read  for a second time the SCMP rules but on my first read I am far more concerned than I was just thinking that spending 75% of income was going to be a challenge.

 

I posted earlier an extract from the SCMP rules around Parachute Payments. I might be, and hope I am wrong, but the way I read it if LCFC have in effect drawn down and used in 25/26 all the 26/27 parachute monies then that sum doesn’t count as income for SCMP purposes in 26/27

 

Then you have transfer income. If all proceeds are paid in one instalment than all that income can be included but if say it’s payable over 4 years then the payment only counts when it’s made.I haven’t fully worked things through but in the 24/25 accounts there were significant sums due to be paid by the club in respect of historical transfers in. Similarly there are payments due re historical transfers out but as we know these payments are the subject  of draw downs from that Aussie Bank.

 

Pages 217 on Appendix 5.

 

https://images.gc.eflservices.co.uk/526ac020-67b3-11f0-9ba4-015464ec39cd.pdf

 

Would appreciate others thoughts

I guess (literally) if club want to pay us in instalments we'd just factor that with Macquarie like we have been doing. If that doesn't count as income for the SCMP rules that seems incredibly punitive.

 

The rules between the leagues just haven't modelled a club imploding and failing to meet any of them. It shouldn't happen in the first place but it's genuinely difficult to get the house back in order. The precedent was there with Sunderland so they essentially should have stress tested PL-L1 situations with 2020s football finances in the fray, Luton scarcely count as they were operating from a League 1 cost basis anyway.

[Les-TA-Jon]

16 minutes ago, wurmer said:

You are spot on with the EFL rulebook formula, but you’re it's not as simple: i.e. allowance vs actual cash-in-the-bank/cashflow.

 

Yes, that is exactly how the SCMP limit is calculated. But having a high spending limit doesn't matter if our bank accounts are empty. Here is the brutal reality of how those three pillars actually look for us right now:

 

1. 75% of Turnover (The Parachute Trap) Because we get a Year 2 Parachute Payment, our "turnover" on paper looks okay. But we’ve already spent it. We took out massive commercial loans (like the ones from Macquarie Bank) to survive the Championship, and those loans are secured against our future parachute payments. So yes, the EFL might say "your turnover gives you a £30m wage allowance," but the actual cash from that parachute payment goes straight to the bank to service our debt, not to paying League One wages. You can’t pay a striker with an SCMP allowance; you need cash.

 

2. ‘Allowable’ Equity Injection You’re assuming Top can and will just pump in "whatever equity" to boost the budget. That ignores what’s happening in the real world. King Power’s duty-free empire has been battered post-pandemic, and they’ve been going through a massive restructure in Thailand. The days of Top writing £50m-£100m blank cheques to bail us out are most likely over. Even if he wanted to, the EFL recently tightened the rules (2024) on how much owner equity can actually be counted to stop financial doping.

 

3. Player Trading Income (The Fire Sale) You are right that selling players boosts our allowance. But to get that "player sale profit," we have to absolutely gut the squad. We will have to fire-sale Hermansen, Fatawu, Ndidi, and anyone else with a pulse just to legally balance the books.

 

TLDR: The SCMP formula doesn't save us. It just outlines the exact mathematical parameters of the fire sale we are about to endure. The EFL gives us a credit limit, but Macquarie Bank has already taken the credit card.

I didn't assume that. I said "Whatever equity income we have" Whatever can include zero. 

 

And yes - EFL did change it - that's the 60% of equity injection I mention. 

 

I don't think SCMP save us at all - I said "how well we do that who knows"

 

All I was ever saying was SCMP isn't just "75% of turnover" 

[les-tah]

We need a crazy fun billionaire to buy us once we are relegated. 
 

a. To release us from the idiotic son and his management structure.

 

b. Cash injection from owner under leagues ones SCMP rules benefits this situation hugely.

 

[wardyfox86]

3 minutes ago, les-tah said:

We need a crazy fun billionaire to buy us once we are relegated. 
 

a. To release us from the idiotic son and his management structure.

 

b. Cash injection from owner under leagues ones SCMP rules benefits this situation hugely.

 

Fallen Premier League champion with State-of-the-art facilties. 

 

Somebody must be interested... 

 

Somebody... 

[damolcfc]

They could rent out Seagrave the night before to the away team to generate income 🤪

[wurmer]

30 minutes ago, Foxmeister said:

 

Hermansen and Ndidi?

My brain fart - Fatawu, Mavididi, Wout Faes, Kristiansen, etc.

 

Was thinking about the loans already secured on Hermansen's sale!

Edited 15 April by wurmer

[Sky Blues]

10 hours ago, drew said:

So hypothetically a super wealthy person could write a cheque for 500m investment whilst in L1 and use that funding in the Championship and EPL.
In essence a L1 club with infrastructure is more attractive than a Championship one that is limited by PSR rules.

I need that Matt le Tissier meme, makes you think.

These rules changed at the start of the season after Birmingham and to a lesser extent Wrexham took advantage. Birmingham bought a 15m striker in L1 amongst other players. Now there's a limit on how much can be put in. They didn't count in the Championship FFP constraints. But you don't need a massive cash advantage to win L1. 

[Ric Flair]

14 hours ago, les-tah said:

We need a crazy fun billionaire to buy us once we are relegated. 
 

a. To release us from the idiotic son and his management structure.

 

b. Cash injection from owner under leagues ones SCMP rules benefits this situation hugely.

 

That lad we had in our academy who's the richest footballer in the world.

[ronnup]

They'll sell Seagrave I think if it gets tasty. Be fascinated to see if we could make a profit on it. 

[Ormondroyd8ftTall]

3 hours ago, ronnup said:

They'll sell Seagrave I think if it gets tasty. Be fascinated to see if we could make a profit on it. 

I've heard a disgusting rumour, from my mate who works across the EFL, that we are exploring the possibility of Forest renting Seagrave next season.

 

If this has any legs, I honestly don't know, just what I've been told.

[cityfanlee23]

I really don’t know about the finances, but purely from a club draw perspective if the finances mean we can somehow keep Seagrave open, you’d imagine we are going to be the absolute #1 destination that premier league clubs will want to send players on loan to, and any free transfers that have a choice between us or other clubs in league 1 will surely want to play for us. 
 

I have a gut feeling that we might be okay IF we are utterly ruthless in summer. We have quite a few players that are on relatively low wages that could do a decent job at that level, Evans, Page, Aluko, Nelson (probably will be sold but can’t see clubs clamouring to take him right now) Alves, Braybrooke, Silko, Maybe Golding and Marcal (1 year extension?) finally get a chance. 
 

We desperately need massive cut backs but we do have some young players that would do well at that level and have the scope to improve in future. Keeping Nelson would be really big if possible. 

[Stadt]

15 minutes ago, cityfanlee23 said:

I really don’t know about the finances, but purely from a club draw perspective if the finances mean we can somehow keep Seagrave open, you’d imagine we are going to be the absolute #1 destination that premier league clubs will want to send players on loan to, and any free transfers that have a choice between us or other clubs in league 1 will surely want to play for us. 
 

I have a gut feeling that we might be okay IF we are utterly ruthless in summer. We have quite a few players that are on relatively low wages that could do a decent job at that level, Evans, Page, Aluko, Nelson (probably will be sold but can’t see clubs clamouring to take him right now) Alves, Braybrooke, Silko, Maybe Golding and Marcal (1 year extension?) finally get a chance. 
 

We desperately need massive cut backs but we do have some young players that would do well at that level and have the scope to improve in future. Keeping Nelson would be really big if possible. 

How many good PL loans have we had this season?

 

Buonanotte was the last good one and we dicked him about dropping him for effeminate Reid.

 

Clubs rightly will weigh up the development opportunity from the minutes they'll get, the manager they'll play under, the atmosphere at the club and so on. Facilities on their own don;t make a success - as we've seen.

[ronnup]

1 hour ago, Ormondroyd8ftTall said:

I've heard a disgusting rumour, from my mate who works across the EFL, that we are exploring the possibility of Forest renting Seagrave next season.

 

If this has any legs, I honestly don't know, just what I've been told.

Couldnt give a shit. Place is an albatros around our necks 

[Jattdogg]

We need a massive sponsorship deal for seagrave....how and who would fund that? 

[bmt]

1 hour ago, Ormondroyd8ftTall said:

I've heard a disgusting rumour, from my mate who works across the EFL, that we are exploring the possibility of Forest renting Seagrave next season.

 

If this has any legs, I honestly don't know, just what I've been told.

Ive been calling this would happen for ages. Theres no way its a saleable asset but renting it to Forest would make sense for both clubs. Obvs won't happen if they go down.

[Foxes1]

5 hours ago, ronnup said:

They'll sell Seagrave I think if it gets tasty. Be fascinated to see if we could make a profit on it. 

Any truth in the rumour that we could be selling Seagrave or renting it out to some of Tops Buddhist monks as a retreat.

[cityfanlee23]

1 hour ago, Stadt said:

How many good PL loans have we had this season?

 

Buonanotte was the last good one and we dicked him about dropping him for effeminate Reid.

 

Clubs rightly will weigh up the development opportunity from the minutes they'll get, the manager they'll play under, the atmosphere at the club and so on. Facilities on their own don;t make a success - as we've seen.

Oh I completely agree, but with the lower standard I think it opens us up to a bigger pool of potential loan players. It's quite rare to find a prem ready loan signing from another prem club, and the sort of loan signings we would be going in for would be the likes of Mukasa/Richards rather than James/Ramsay. 

We would be going in for Braybrooke types which I think opens the door for us. 
Completely agree we need to find a manager with a vision etc, but overall if a club has to choose between us and another league 1 club, and they are happy with the direction of both, they likely choose us, which is the only silver lining and opportunity to potentially stop this rot. 

[Clever Fox]

2 hours ago, Ormondroyd8ftTall said:

I've heard a disgusting rumour, from my mate who works across the EFL, that we are exploring the possibility of Forest renting Seagrave next season.

 

If this has any legs, I honestly don't know, just what I've been told.

It would make good business sense to share the facility with one or more Clubs. Especially in the short term to bring in money. 

[Clever Fox]

1 hour ago, ronnup said:

Couldnt give a shit. Place is an albatros around our necks 

No it isn't. It's the long term future of the Club if run properly. 

Bring in young players for little cost and sell for a big profit. 

 

It's also a very specialised facility. That wouldn't be easy to sell unless it was for Football. 

[Pita]

7 minutes ago, Clever Fox said:

No it isn't. It's the long term future of the Club if run properly. 

Bring in young players for little cost and sell for a big profit. 

 

It's also a very specialised facility. That wouldn't be easy to sell unless it was for Football. 

If run properly that’s the trouble. Our muppets can’t run a club. 

[Clever Fox]

12 minutes ago, Pita said:

If run properly that’s the trouble. Our muppets can’t run a club. 

Agreed, But that's not a reason to get rid of it. It's a wonderful facility that we have at present. That many other clubs are envious off. 

We won't always be in this position. Things always change in Football. 

As I said run right it can be a big income maker going forward. 

[ronnup]

33 minutes ago, Clever Fox said:

No it isn't. It's the long term future of the Club if run properly. 

Bring in young players for little cost and sell for a big profit. 

 

It's also a very specialised facility. That wouldn't be easy to sell unless it was for Football. 

 

That system doesn't work when your club is a pair of clown shoes, and young players get picked off like Nyoni for **** all. Until we are a proper prospect again its a waste of time. We will be producing prospects for Prem clubs who then **** off for nothing

Edited 16 April by ronnup

[AKCJ]

22 hours ago, damolcfc said:

Oxford 

Sheffield Weds 

Luton all favourites for promotion 🤔😉😉

Sheffield Wednesday definitely wouldn't be favourites. I'd say they're much more likely to go down again than come back up.

[Ormondroyd8ftTall]

56 minutes ago, Clever Fox said:

It would make good business sense to share the facility with one or more Clubs. Especially in the short term to bring in money. 

Begrudgingly agree. Its just......Forest tho

[when_you're_smiling]

2 hours ago, Jattdogg said:

We need a massive sponsorship deal for seagrave....how and who would fund that? 

One of those ‘have you been injured at work’ insurance companies.