Points Deduction AGAIN

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Elm Park Kid
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Re: Points Deduction AGAIN

by Elm Park Kid » 17 Mar 2023 15:14

Total debt is largely irrelevant.

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Re: Points Deduction AGAIN

by Mr Angry » 17 Mar 2023 15:15

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For P&S reasons, pretty much all of the above is wrong.

The target is 39m over 3 years (or 4 currently as 2 years of Covid treated as 1), however, due to the agreed decision, the first 2 periods of the current reporting period were capped at 13m per season once we accepted the punishment.

That means we could only lose 13m last season and meet the plan. We lost 17.3 but this is before P&S deductions - the club can deduct 2.5m as COVID relief plus costs of running the academy/womens team and a whole raft of other items.

So after the COVID relief, we had to find deductions of 1.8m, which should be more that achievable via those deductions - so if we have breached, it won't be by much - though in our situation, any breach however minor is likely to be major.


apols as I haven't really followed the detail of all this closely, but are you saying we may have breached FFP in our newly released accounts, and also the EFL are potentially looking to impose a points penalty for something in a previous season unrelated to that too?


Without seeing the calculation it is possible but given the deductions allowed include Womens Team costs (approx 1.2m), training ground upkeep (approx 300k) then with the COVID relief the academy costs for the year would need to be less than 300k for us to have breached, which is incredibly unlikely.

The only breach I can see, if it relates to the period over the past 2 years, is that we haven't met the wages aspect, which looking at the top line wage costs, also seems unlikely but may come down to semantics at the end of the day.


So we come back to the breaking news from nearly 3 weeks ago now that we are going to get a 6 point deduction.

Here is a wacky theory; someone in the EFL who knew we needed to lose less than £13M in our latest accounts was told we had lost £17.3M, so rings his chums in the Press and says we are defo getting hit with the 6 point deduction.....but, he didn't take into account the items that we can offset against that loss, offsets that makes the actual lose £12.75M, so under the £13M limit set by the EFL, and hey presto - no points deduction.

This would also explain why this story seems to have gone totally cold in the last week/10 days or so in the press.

I am not saying this IS what has happened, just that it MIGHT be what has happened.........

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Sutekh
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Re: Points Deduction AGAIN

by Sutekh » 17 Mar 2023 15:56

Mr Angry
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apols as I haven't really followed the detail of all this closely, but are you saying we may have breached FFP in our newly released accounts, and also the EFL are potentially looking to impose a points penalty for something in a previous season unrelated to that too?


Without seeing the calculation it is possible but given the deductions allowed include Womens Team costs (approx 1.2m), training ground upkeep (approx 300k) then with the COVID relief the academy costs for the year would need to be less than 300k for us to have breached, which is incredibly unlikely.

The only breach I can see, if it relates to the period over the past 2 years, is that we haven't met the wages aspect, which looking at the top line wage costs, also seems unlikely but may come down to semantics at the end of the day.


So we come back to the breaking news from nearly 3 weeks ago now that we are going to get a 6 point deduction.

Here is a wacky theory; someone in the EFL who knew we needed to lose less than £13M in our latest accounts was told we had lost £17.3M, so rings his chums in the Press and says we are defo getting hit with the 6 point deduction.....but, he didn't take into account the items that we can offset against that loss, offsets that makes the actual lose £12.75M, so under the £13M limit set by the EFL, and hey presto - no points deduction.

This would also explain why this story seems to have gone totally cold in the last week/10 days or so in the press.

I am not saying this IS what has happened, just that it MIGHT be what has happened.........


Who knows? It wouldn't surprise me if the FL still didn't know either!

YorkshireRoyal99
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Re: Points Deduction AGAIN

by YorkshireRoyal99 » 17 Mar 2023 16:36

Sutekh
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One8Seven1* Anyone know what the current club debt is now? Bearing in mind we no longer own the stadium, land around the stadium, or training ground.


If I'm reading the accounts right - the total debt stands at 98m - of which 83m is owed to the owners. This is actually down from 116m last year.

The club is also currently owed 23m, though 19m of that is classed as "amounts owed by group undertakings" so likely money lent to say the Womens team over the years (amongst others).

Again if I am reading it right, and if not am sure someone will correct me, but The Reading Football Club Limited is the full owner of:

Reading FC Community Trust
RFC Bearwood Ltd
Reading Women's Football Club Ltd.

In total those 3 companies lost 2 million, and I think that can all be offset to P&S calcs.

If correct, from that and covid we have 4.5m of losses we can write off from P&S meaning our 17.25m loss becomes a 12.75m loss - bringing us in just under the 13m threshold.


Ultimately though if Mr Dai chose to write off the debt owed him then I presume the club could basically tell the FL what to do with their FFP restrictions?

Out of interest which company owns the SCL stadium now?


That's what the Coates family did with Stoke isn't it?

The company that owns the SCL stadium is one owned by Dai Yongge I'm sure, although don't know specifically which one. Not sure if it's the football club though.

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Re: Points Deduction AGAIN

by Mid Sussex Royal » 17 Mar 2023 19:19

So - £5m of the latest loss in the club financials is down to player depreciation....assume Joao/Puscas mainly....this has no impact on day to day cashflow which banks ignore when lending to businesses

Why don't the EFL do the same?


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Re: Points Deduction AGAIN

by Winston Biscuit » 17 Mar 2023 21:49

Skybet have put us back into the relegation betting. 8th favourite at 18/1

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tidus_mi2
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Re: Points Deduction AGAIN

by tidus_mi2 » 17 Mar 2023 22:34

Winston Biscuit Skybet have put us back into the relegation betting. 8th favourite at 18/1

Good bet to take if you genuinely think we'll get a point deduction. Would think Sky might know something though.

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Re: Points Deduction AGAIN

by Hound » 18 Mar 2023 09:45

Mid Sussex Royal So - £5m of the latest loss in the club financials is down to player depreciation....assume Joao/Puscas mainly....this has no impact on day to day cashflow which banks ignore when lending to businesses

Why don't the EFL do the same?


Yeah that’s how I read that figure - assume it’ll be the same this season but cleared off the books for next year

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Re: Points Deduction AGAIN

by Snowflake Royal » 18 Mar 2023 09:48

Elm Park Kid We lost £95m in the last 3 seasons. Including 17.3m last season.

The P&S target is £39m over 3 seasons. £13m a season.

Even following the EFL plan and being under a transfer embargo will still missed our allowed losses by £4.3m. And that was only because we sold Olise - otherwise we would have missed them by £12.3m!

This is way we are probably still non-compliant this season and why the EFL is on our arse.

Accounts loss is not the same as FFP loss. FFP does not count lots of things like Academy, Women's team, major infrastructure etc.

So accounting for that, the £17m loss could be under the requirement. Academy is going to be £1m - £2m on its own.


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Re: Points Deduction AGAIN

by windermereROYAL » 18 Mar 2023 10:27

Surely we`ve already been punished for the previous 3 season cycle?

Mid Sussex Royal
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Re: Points Deduction AGAIN

by Mid Sussex Royal » 18 Mar 2023 10:58

windermereROYAL Surely we`ve already been punished for the previous 3 season cycle?


Yes - I think now the previous losses are re-set at £13m each year, meaning to stay within FFP on a rolling average we have to be inside £13m each year not to breach it again.

As said above, looking at what we can deduct from the £17m, ie academy, women's team, £2.5m covid adjustment we should be ok.....

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Re: Points Deduction AGAIN

by Winston Biscuit » 18 Mar 2023 11:35

tidus_mi2
Winston Biscuit Skybet have put us back into the relegation betting. 8th favourite at 18/1

Good bet to take if you genuinely think we'll get a point deduction. Would think Sky might know something though.


They have removed us again. Missed my chance!

Mid Sussex Royal
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Re: Points Deduction AGAIN

by Mid Sussex Royal » 18 Mar 2023 12:17

Winston Biscuit
tidus_mi2
Winston Biscuit Skybet have put us back into the relegation betting. 8th favourite at 18/1

Good bet to take if you genuinely think we'll get a point deduction. Would think Sky might know something though.


They have removed us again. Missed my chance!


I expect they've had a few backers on us since they offered odds again.

Interestingly Birmingham are not quoted either...I wonder what's going on with their investigation?


Elm Park Kid
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Re: Points Deduction AGAIN

by Elm Park Kid » 18 Mar 2023 16:00

Mid Sussex Royal
windermereROYAL Surely we`ve already been punished for the previous 3 season cycle?


Yes - I think now the previous losses are re-set at £13m each year, meaning to stay within FFP on a rolling average we have to be inside £13m each year not to breach it again.

As said above, looking at what we can deduct from the £17m, ie academy, women's team, £2.5m covid adjustment we should be ok.....


You have to think that 6 points was an extremely lax punishment. I could see why fans of other clubs (especially those relegated during that time) would be unhappy.

Mid Sussex Royal
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Re: Points Deduction AGAIN

by Mid Sussex Royal » 18 Mar 2023 16:05

Elm Park Kid
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windermereROYAL Surely we`ve already been punished for the previous 3 season cycle?


Yes - I think now the previous losses are re-set at £13m each year, meaning to stay within FFP on a rolling average we have to be inside £13m each year not to breach it again.

As said above, looking at what we can deduct from the £17m, ie academy, women's team, £2.5m covid adjustment we should be ok.....


You have to think that 6 points was an extremely lax punishment. I could see why fans of other clubs (especially those relegated during that time) would be unhappy.


Sheffield Wed got away with 6 after appeal...maybe set a precedent

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Re: Points Deduction AGAIN

by Franchise FC » 19 Mar 2023 17:31

Mid Sussex Royal So - £5m of the latest loss in the club financials is down to player depreciation....assume Joao/Puscas mainly....this has no impact on day to day cashflow which banks ignore when lending to businesses

Why don't the EFL do the same?

Because you could spend a couple of hundred million, amortise over a number of years and thus have it excluded fromFFP altogether

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Re: Points Deduction AGAIN

by Stranded » 20 Mar 2023 07:28

Elm Park Kid
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windermereROYAL Surely we`ve already been punished for the previous 3 season cycle?


Yes - I think now the previous losses are re-set at £13m each year, meaning to stay within FFP on a rolling average we have to be inside £13m each year not to breach it again.

As said above, looking at what we can deduct from the £17m, ie academy, women's team, £2.5m covid adjustment we should be ok.....


You have to think that 6 points was an extremely lax punishment. I could see why fans of other clubs (especially those relegated during that time) would be unhappy.


But the punishment wasn't 6 points was it? It was 6 points then, with the threat of 6 more and massive restrictions on what could be spent on the playing staff which grossly impacted the club in terms of recruitment, leaving us with the Frankenstein's monster of a squad that we currently have.

So whilst the punishment, did not and still may not relegate us, it is hard to argue that the club haven't been punished fairly heavily.

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Re: Points Deduction AGAIN

by RG30 » 20 Mar 2023 11:01

Winston Biscuit
tidus_mi2
Winston Biscuit Skybet have put us back into the relegation betting. 8th favourite at 18/1

Good bet to take if you genuinely think we'll get a point deduction. Would think Sky might know something though.


They have removed us again. Missed my chance!


That was my fault, max staked it on a couple of restricted accounts.

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Winston Biscuit
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Re: Points Deduction AGAIN

by Winston Biscuit » 20 Mar 2023 11:09

RG30
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tidus_mi2 Good bet to take if you genuinely think we'll get a point deduction. Would think Sky might know something though.


They have removed us again. Missed my chance!


That was my fault, max staked it on a couple of restricted accounts.


I am genuinely gutted I didn't do it. Even just to chuck a small amount on then cash out straight after the points deduction would have been well worth it

how much you put on and at what odds?

Clyde1998
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Re: Points Deduction AGAIN

by Clyde1998 » 20 Mar 2023 11:15

YorkshireRoyal99 I think it relates to the wage bill, it was at just over £25m for last season where it needed to be around £21.5m as agreed in the Business Plan.

The fact we've still posted losses of £17.3m, including the £8m sale of Olise, is not good either.

Not only that but I don't know how we will have managed to get our wage bill down by nearly £10m for the year this season either considering we haven't lost that many big earners other than Swift.

I don't think anyone's picked up on this point, but the wages in the business plan relate to player wages specifically whereas the wages in the accounts cover all salaried staff at the club (including players, coaches, scouts, directors, ticket office, club shop, catering, etc).

I'm not sure if the business plan wage limit includes social security or pension costs incurred by the club though. If social security and pension costs aren't included as part of the business plan, our total salary expenditure (for all employees) is £22.4m. The business plan limit was £21.1m for player wages, so £1.3m would have to go to non-playing staff to comply.

There were 210 non-playing staff shown in the accounts, so they would have to be paid an average of £6.2k p/a (or greater) to take us below £21.1m wages for the playing staff. Without matchday staff and government training scheme employees, that would mean an average of £9.7k p/a. It's almost certain our playing costs were below £21.1m, once discounting social security and pensions.

If social security and pension costs are included, then (excluding matchday and training scheme employees), it's an average of £31.5k p/a (or greater) to take us below the limit; £4.2m total. That would make it less clear whether our player wages fall below the £21.1m threshold from the accounts alone, but is certainly possible.

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