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#swfc -12 points for 2020-21. What does that points deduction mean for us then - and what could it mean for the future?
Below a thread looking into:
1) How does P&S work again?
2) What does it all mean?
3) How much can we spend now then?
Below a thread looking into:
1) How does P&S work again?
2) What does it all mean?
3) How much can we spend now then?
P&S, Profitability & Sustainability. The @EFL's version of UEFA's Financial Fair Play.
It means we cannot lose more than £39m in the current season and the two seasons before that combined.
At the end of 2019-20 that £39m limit was for the period July 2017 to June 2020.
It means we cannot lose more than £39m in the current season and the two seasons before that combined.
At the end of 2019-20 that £39m limit was for the period July 2017 to June 2020.
The loss limit of £39m is always for a rolling three years - and that's key.
Wolves, when winning the division in 2017-18, lost £31m that season alone.
But because they only lost a combined £5m in the previous two seasons, they didn't break the £39m limit (via @SwissRamble):
Wolves, when winning the division in 2017-18, lost £31m that season alone.
But because they only lost a combined £5m in the previous two seasons, they didn't break the £39m limit (via @SwissRamble):
Even if you get away with breaking the £39m limit once, because it's a rolling three years the "hangover" from bad decisions and bad finances can last a long time.
Not until the end of next season, 20-21, do we get rid of the "hangover" from the spendathons of 16-17 and 17-18.
Not until the end of next season, 20-21, do we get rid of the "hangover" from the spendathons of 16-17 and 17-18.
We're still waiting for the full verdict of the Independent Disciplinary Commission - even the @EFL are yet to receive it.
But it's fair to assume, so far, that:
1) The sale of Hillsborough is moved from the 17-18 to the 18-19 accounts.
2) The sale price of £60m is okay.
But it's fair to assume, so far, that:
1) The sale of Hillsborough is moved from the 17-18 to the 18-19 accounts.
2) The sale price of £60m is okay.
If we move the sale of Hillsborough from 17-18 to the 18-19 accounts, we get a £17m breach of the £39m limit for the period 2015-2018.
Which is why our deduction is 12 points as it's above the upper limit of a breach of £15m established in last year ( https://www.efl.com/contentassets/c79763f8e2174f4fb87200a371abf5fa/190322---efl-v-bcfc---decision---final.pdf#page=11):
Which is why our deduction is 12 points as it's above the upper limit of a breach of £15m established in last year ( https://www.efl.com/contentassets/c79763f8e2174f4fb87200a371abf5fa/190322---efl-v-bcfc---decision---final.pdf#page=11):
Look again at that first image: While we're in breach for the rolling three years 2015-2018, we stay just inside the £39m limit for the rolling three years 2016-2019 as well as 2017-2020.
No further deductions for what we HAVE done then:
No further deductions for what we HAVE done then:
But what about the future - next season (20-21) and the season after (21-22)?
Will we break the £39m limit for the 2018-2021 and 2019-2022 periods?
Lots of even more expiring contracts mean our expenses - and losses - dwindle as quickly as the size of the playing squad:
Will we break the £39m limit for the 2018-2021 and 2019-2022 periods?
Lots of even more expiring contracts mean our expenses - and losses - dwindle as quickly as the size of the playing squad:
Even if we spend £17m on wages and amortised transfer fees in both 2020-21 and 2021-22, we should still stay inside the £39m limit for the three rolling years ending in 2021 and 2022 respectively.
Should we just go out and splash all that cash then? No.
Should we just go out and splash all that cash then? No.
Since the January 2018 we've recruited/extended a lot less expensively: All the names in green in the image below.
Especially compared to some of the "heavy weighters", who signed or were given new contracts in the 15-16 and 16-17 seasons (the names in red):
Especially compared to some of the "heavy weighters", who signed or were given new contracts in the 15-16 and 16-17 seasons (the names in red):
In fact the average yearly wage of the "heavy weighters" was £1.3m.
For the new recruits, from 2018 onwards, it's only £450k - a significant reduction in costs:
For the new recruits, from 2018 onwards, it's only £450k - a significant reduction in costs:
If we, as has been mooted, recruit from the free agent and loan market this summer, we should be paying little, if anything, in transfer fees.
6 more players (for a squad of 24), on wages of £500k a year each, is "just" another £3m and would take wage costs for 2020-21 to £19m.
6 more players (for a squad of 24), on wages of £500k a year each, is "just" another £3m and would take wage costs for 2020-21 to £19m.
That's still 142% of revenue, as revenue will also fall due to Covid-19: Lower match day income, fewer merchandise sales and lower broadcast income due to EPL paying broadcasters a rebate.
unroll
