NFFC Financial Talk

[wassy04]

Just a question. Wasn't it Barnsley that established a transfer policy of no new signings of players over 25? If so, it seems looking for younger, hungrier players on lower wages might be the way to go instead of 30 year old wasters looking for one last contract.

Sure we tried a similar thing once and it got us nowhere.
We shouldn't place limits on ourselves.

I would really like to try the no over 25s policy properly. We kind of did it but we basically signed a load of Portuguese kids with no experience of the EFL so nor surprise we got nowhere. If recruitment is done correctly I think it could work then we unlock potential and develop these players how we want.

Alf does have a point though and I am a realist. Barnsley fans up until a few months ago were complaining bitterly about the strategy. Lets be honest if it wasnt for some utterly clueless Forest injury time defending last July, then Barnsley would currently be a L1 side.

Maybe there is a compromise. Only sign over 25s on free transfer and max 2 year contract, Youth first policy.

The epitome of fine margins.

The worst moment of Sabri's career, even just considering thinking about it made me angry!

I'd be happy to try this strategy, I'd probably argue we've done that already so far since last summer. Just mainly signed over 25s on free transfers  :D can't imagine any of them got more than 2 year deals, I hope not. 

The flaw is you make this a clear strategy and everyone will know to charge us more!

[Knocker West]

Just to make people wince a bit more.

There are 69 players on that list.

Assuming the average wage for them is £10K per week and that each player has stayed just 1 season then we have spent a further £36 Million in wages on them.

Some of these players are paid considerably more than that and of course some have hung around like a bad smell for years, I estimate Hefele has cost us £2.5M over his contract.

Of course some of them have done well and earned their money, we have to have some outlay. But Transfers £30M plus wages for them £36M and we are in 17th place in the Championship.

That's why this summer is so important & there's no room for sentiment, we're within FFP, our amortization costs are low (negligible if we move on Grabban & Carvalho) & so any in comings can really go straight into the war chest & from there it's down to how EM wants to view things & how much faith he has at the moment & therefore how high he's willing to run those amortization costs up again.

We need to finish the clear out & that leave a fairly blank slate, for CH (providing he's still here) to put his stamp on.

It's why we shouldn't get to sentimental this summer, because we don't actually want him to make do with some other managers players, who have failed before, & try to fashion something out of them, we actually want him to build his own team, & this summer is an opportunity to do that.

[Salvatore Matrecano]

Swiss Ramble’s annual superb analysis published.

Summary, we lose enough money to reduce most accountants to gibbering wrecks but not as much as some clubs.

[wassy04]

Swiss Ramble’s annual superb analysis published.

Summary, we lose enough money to reduce most accountants to gibbering wrecks but not as much as some clubs.

His analysis really is excellent.

Takeaways for me:

1 According to Swiss Ramble only squeaked meeting FFP this, largely due to a hefty loss a few years ago. Looks like he's added a covid adjustment so I'm guessing thats how they're going to police it. Can't see them being too strict but we can only afford a 6m loss. Given our operating loss is 32m, we're going to struggle next season. I wonder whether that means we'll have to sell Worrall early to get him in the next accounts. Did we sell anyone else aside from Cash? Even with 14-16m from that we're still around 10m short.
2. Parachute payments are a disgrace and these accounts once again evidence it. Even with the excessive losses and a turnover to wages ratio of 143% we're still only 11th in wages spent! We're in a halfway house strategy of spending too much to ever get wages under control but not enough to actually realistically challenge. 
3 Brings me on to the strategy for the summer, I suspect we'll just sell Worrall, sign a load of frees/loans and try and win with the current squad. However this would be clearly wrong. In my opinion we have three options:

Option one we spend nothing and clear out as much wages as possible. Don't commit to any high contracts and also sell Worrall. Basically balance the books and then start again, hopefully in a few years when Parachute payments are gone we'll be nicely poised with a squad predominantly from the cat 1 academy. Obviously pretty big risk we go down and a pretty depressing few years ahead but I'm sure it would be popular with some. Can't see Marinakis doing this but probably the best option.

Option 2, the fun option, gung ho. f**k FFP, f**k Parachute payments. We accept we'll fail FFP and gamble on going up next year. We wouldn't be punished until the following season so we'd have one shot at it. Spend excessively, keep Worrall and go all in. Ideally on players with resale value for the firesale the following year when it fails so the punishments aren't too severe. Perhaps some creative accounting surrounding FFP and the pandemic that we could take advantage of.

Option 3, listed above, we sell Worrall (or perhaps get away with selling Carv, Grabban, Mighten or Johnson maybe and use FFP write-offs to cover the difference), buy low and cheap/loans. Basically current strategy and hope CH can perform some magic. I'm assuming this is what we'll do but none of these options are great are they.

[wassy04]

Just googled FFP for the pandemic and it suggests you can adjust player valuations as they will have decreased. You can treat this as an asset write-off meaning you could claim Worrall's value has gone from 15m to 10m for example. You could put this 5m towards FFP in accounting terms, assume this is how we'll avoid failing next year. Arguably makes the Cash sale look even more impressive in that context, might even be able to claim we could've got more.

Basically FFP will be a mess for the league next year, definitely room to be manipulated/taken advantage of.

[Reds73]

Swiss Ramble’s annual superb analysis published

Summary, we lose enough money to reduce most accountants to gibbering wrecks but not as much as some clubs.

His analysis really is excellent.

Takeaways for me:

1 According to Swiss Ramble only squeaked meeting FFP this, largely due to a hefty loss a few years ago. Looks like he's added a covid adjustment so I'm guessing thats how they're going to police it. Can't see them being too strict but we can only afford a 6m loss. Given our operating loss is 32m, we're going to struggle next season. I wonder whether that means we'll have to sell Worrall early to get him in the next accounts. Did we sell anyone else aside from Cash? Even with 14-16m from that we're still around 10m short.
2. Parachute payments are a disgrace and these accounts once again evidence it. Even with the excessive losses and a turnover to wages ratio of 143% we're still only 11th in wages spent! We're in a halfway house strategy of spending too much to ever get wages under control but not enough to actually realistically challenge. 
3 Brings me on to the strategy for the summer, I suspect we'll just sell Worrall, sign a load of frees/loans and try and win with the current squad. However this would be clearly wrong. In my opinion we have three options:

Option one we spend nothing and clear out as much wages as possible. Don't commit to any high contracts and also sell Worrall. Basically balance the books and then start again, hopefully in a few years when Parachute payments are gone we'll be nicely poised with a squad predominantly from the cat 1 academy. Obviously pretty big risk we go down and a pretty depressing few years ahead but I'm sure it would be popular with some. Can't see Marinakis doing this but probably the best option.

Option 2, the fun option, gung ho. f**k FFP, f**k Parachute payments. We accept we'll fail FFP and gamble on going up next year. We wouldn't be punished until the following season so we'd have one shot at it. Spend excessively, keep Worrall and go all in. Ideally on players with resale value for the firesale the following year when it fails so the punishments aren't too severe. Perhaps some creative accounting surrounding FFP and the pandemic that we could take advantage of.

Option 3, listed above, we sell Worrall (or perhaps get away with selling Carv, Grabban, Mighten or Johnson maybe and use FFP write-offs to cover the difference), buy low and cheap/loans. Basically current strategy and hope CH can perform some magic. I'm assuming this is what we'll do but none of these options are great are they.

We will be within FFP limits for 20/21 100%.
There are accountancy procedures you can do because of the lockdown that have been announced with regards to FFP accounting.
You can add inlost revenue, and costs associated with COVID, reduced player values, and I also believe the 3yr rolling period has been increased to 4 yrs.
Also the large losses from 3 yrs ago are no longer in the rolling period.

We will be fine, there is no way we will fail the criteria.

[tugger2018]

Just a thought average joe lolley will probably pocket £500,000 in wages before he kicks a ball for us again ( not his fault)

[tugger2018]

Good write up wassy
It looks like we tried option 2 this season
And we will try option 3 next season
But we should be doing option 1

[wassy04]

Swiss Ramble’s annual superb analysis published

Summary, we lose enough money to reduce most accountants to gibbering wrecks but not as much as some clubs.

His analysis really is excellent.

Takeaways for me:

1 According to Swiss Ramble only squeaked meeting FFP this, largely due to a hefty loss a few years ago. Looks like he's added a covid adjustment so I'm guessing thats how they're going to police it. Can't see them being too strict but we can only afford a 6m loss. Given our operating loss is 32m, we're going to struggle next season. I wonder whether that means we'll have to sell Worrall early to get him in the next accounts. Did we sell anyone else aside from Cash? Even with 14-16m from that we're still around 10m short.
2. Parachute payments are a disgrace and these accounts once again evidence it. Even with the excessive losses and a turnover to wages ratio of 143% we're still only 11th in wages spent! We're in a halfway house strategy of spending too much to ever get wages under control but not enough to actually realistically challenge. 
3 Brings me on to the strategy for the summer, I suspect we'll just sell Worrall, sign a load of frees/loans and try and win with the current squad. However this would be clearly wrong. In my opinion we have three options:

Option one we spend nothing and clear out as much wages as possible. Don't commit to any high contracts and also sell Worrall. Basically balance the books and then start again, hopefully in a few years when Parachute payments are gone we'll be nicely poised with a squad predominantly from the cat 1 academy. Obviously pretty big risk we go down and a pretty depressing few years ahead but I'm sure it would be popular with some. Can't see Marinakis doing this but probably the best option.

Option 2, the fun option, gung ho. f**k FFP, f**k Parachute payments. We accept we'll fail FFP and gamble on going up next year. We wouldn't be punished until the following season so we'd have one shot at it. Spend excessively, keep Worrall and go all in. Ideally on players with resale value for the firesale the following year when it fails so the punishments aren't too severe. Perhaps some creative accounting surrounding FFP and the pandemic that we could take advantage of.

Option 3, listed above, we sell Worrall (or perhaps get away with selling Carv, Grabban, Mighten or Johnson maybe and use FFP write-offs to cover the difference), buy low and cheap/loans. Basically current strategy and hope CH can perform some magic. I'm assuming this is what we'll do but none of these options are great are they.

We will be within FFP limits for 20/21 100%.
There are accountancy procedures you can do because of the lockdown that have been announced with regards to FFP accounting.
You can add inlost revenue, and costs associated with COVID, reduced player values, and I also believe the 3yr rolling period has been increased to 4 yrs.
Also the large losses from 3 yrs ago are no longer in the rolling period.

We will be fine, there is no way we will fail the criteria.

Yes agreed, I wasn't suggesting we'd fail this season, next season might be tighter though. Swiss has included covid cost estimates in his FFP estimate for this year which I assume just accounted for lost income. 

Yeah mentioned those separately, So that's good actually I didn't account for the 4 year aspect, which means we get to keep our 6m loss from 17/18. Actually works out really well for us then. That's good then so we can afford to make an FFP loss of around 13m again I reckon if I've understood it right. 

So quick back of a fag packet maths,

17/18 - 6
18/19 - 20
19/20 - 13
20/21 - 13 (estimated)

Total - 52 which will be the total FFP losses allowed.

So to meet that 13m, assuming our operating loss of 32m is net of covid decreases (as in it'll be way higher but readjust back to that when you remove covid write-offs) 17-18m for sales (Guerroro and Silva worth a few m?!). Probably actually implies we're fine more or less. Although I guess I'm not including an inevitable increase in amortisation from signings of Soh, McKenna and Arter (shudders).

What it means for this summer is unclear as it depends on if it goes back to 3 years or 4 years next time. If its 4 years we still we're stuck with the 18/19 loss which means we need sales. If it's 3 years again we get to ditch that so can still with normal strategy which still requires around 15m of sales!

[wassy04]

Good write up wassy
It looks like we tried option 2 this season
And we will try option 3 next season
But we should be doing option 1

SM would definitely be happy!

[Reds73]

Swiss Ramble’s annual superb analysis published

Summary, we lose enough money to reduce most accountants to gibbering wrecks but not as much as some clubs.

His analysis really is excellent.

Takeaways for me:

1 According to Swiss Ramble only squeaked meeting FFP this, largely due to a hefty loss a few years ago. Looks like he's added a covid adjustment so I'm guessing thats how they're going to police it. Can't see them being too strict but we can only afford a 6m loss. Given our operating loss is 32m, we're going to struggle next season. I wonder whether that means we'll have to sell Worrall early to get him in the next accounts. Did we sell anyone else aside from Cash? Even with 14-16m from that we're still around 10m short.
2. Parachute payments are a disgrace and these accounts once again evidence it. Even with the excessive losses and a turnover to wages ratio of 143% we're still only 11th in wages spent! We're in a halfway house strategy of spending too much to ever get wages under control but not enough to actually realistically challenge. 
3 Brings me on to the strategy for the summer, I suspect we'll just sell Worrall, sign a load of frees/loans and try and win with the current squad. However this would be clearly wrong. In my opinion we have three options:

Option one we spend nothing and clear out as much wages as possible. Don't commit to any high contracts and also sell Worrall. Basically balance the books and then start again, hopefully in a few years when Parachute payments are gone we'll be nicely poised with a squad predominantly from the cat 1 academy. Obviously pretty big risk we go down and a pretty depressing few years ahead but I'm sure it would be popular with some. Can't see Marinakis doing this but probably the best option.

Option 2, the fun option, gung ho. f**k FFP, f**k Parachute payments. We accept we'll fail FFP and gamble on going up next year. We wouldn't be punished until the following season so we'd have one shot at it. Spend excessively, keep Worrall and go all in. Ideally on players with resale value for the firesale the following year when it fails so the punishments aren't too severe. Perhaps some creative accounting surrounding FFP and the pandemic that we could take advantage of.

Option 3, listed above, we sell Worrall (or perhaps get away with selling Carv, Grabban, Mighten or Johnson maybe and use FFP write-offs to cover the difference), buy low and cheap/loans. Basically current strategy and hope CH can perform some magic. I'm assuming this is what we'll do but none of these options are great are they.

We will be within FFP limits for 20/21 100%.
There are accountancy procedures you can do because of the lockdown that have been announced with regards to FFP accounting.
You can add inlost revenue, and costs associated with COVID, reduced player values, and I also believe the 3yr rolling period has been increased to 4 yrs.
Also the large losses from 3 yrs ago are no longer in the rolling period.

We will be fine, there is no way we will fail the criteria.

Yes agreed, I wasn't suggesting we'd fail this season, next season might be tighter though. Swiss has included covid cost estimates in his FFP estimate for this year which I assume just accounted for lost income. 

Yeah mentioned those separately, So that's good actually I didn't account for the 4 year aspect, which means we get to keep our 6m loss from 17/18. Actually works out really well for us then. That's good then so we can afford to make an FFP loss of around 13m again I reckon if I've understood it right. 

So quick back of a fag packet maths,

17/18 - 6
18/19 - 20
19/20 - 13
20/21 - 13 (estimated)

Total - 52 which will be the total FFP losses allowed.

So to meet that 13m, assuming our operating loss of 32m is net of covid decreases (as in it'll be way higher but readjust back to that when you remove covid write-offs) 17-18m for sales (Guerroro and Silva worth a few m?!). Probably actually implies we're fine more or less. Although I guess I'm not including an inevitable increase in amortisation from signings of Soh, McKenna and Arter (shudders).

What it means for this summer is unclear as it depends on if it goes back to 3 years or 4 years next time. If its 4 years we still we're stuck with the 18/19 loss which means we need sales. If it's 3 years again we get to ditch that so can still with normal strategy which still requires around 15m of sales!

Contrary to certain reports on social media, Soh was apparantly around 1m and Arter we paid a fee that in effect paid up his contract.

So for the 2 of them the amortised cost is prob less than 1m a year.

It is the Carvalho amortised cost we need to rid, that is 3m a year.

Would make a difference to remove that.

[Reds73]

It’s also worth noting the wage bill will reduce greatly this summer, I will give it a guess on the conservative basis.

Dawson - 10k
Hefele - 15k
Diallo - 5k
Ribeiro - 8k
Sow - 20k
Bachirou - 10k
Ameobi - 15k

Total - 4.3m

Loans
Christie - 20k
Garner - 10k
Knockaert - 40k
Freeman - 20k
Krovinivic - 15k

Total - 5.4m

TOTAL SAVING 9.7m

we will need 2 full backs, a striker, a number 8, and let’s assume we also get Krovi, Knockaert and Garner back on same wages.

If we average 15k a week on the 4 players added to the loans they would be around 6.5m

So I reckon we will knock off over 3m on the wage bill.

I guess we will also try and find a taker for Arter, but we may need to pay a % of his wages.

But I think the wage bill is coming down, which will also help.