Everton next points deduction no later than April 8th

Andybarca said:
This is a pretty good description of how it works:
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A concrete example is Matt Crooks. We bought him in July 2021 for somewhere around £1m with what was presumably a 4 year contract so his "amortisation" amount each year is (approx) £250K.
21-22 -250K = "book value" £750K
22-23 -250K = book value £500K
23-24 this season. We sold him for some amount with what sounds like a 20% sell-on fee from Rotherham. His current book value is £500K. If we sold him for the top-end of the rumours at £4m then that's £3.2m after 20% sell-on fee, £500k (book value) = profit of £2.7m.
Presumably we sold him for somewhere closer to £3m which would be a profit of around £1.9m minus agent fees, legal fees and so on. Call it £1.5m when all is said and done.

In PSR terms that 1.5m profit stays on the books for 3 years (this year and the next two). That means that we could buy someone next year for £6m, give them a 4 year contract and the amortisation fee of £1.5m per year is balanced out by the Tree fund for the first two years. We're probably looking at paying north of £8m for a top Championship striker this summer so the Tree fund balances most of that in terms of PSR for the next two seasons.

It feels a bit like magic beans but that's just how accounting works. The bad side is what happens when the profit from the sale runs out but you're still paying* amortisation costs. That's what happened to us with Assombalonga and Fletcher; we had 7 years of having to account for their amortisation fees and never got a penny back.

On the plus side, say we made £5m net profit from Rogers and £1.5m from Crooks that's £7.5m which is enough to spend £30m on players with 4 year contracts (£7.5m/year) and be ok for the next two years in PSR terms. It will bite badly from year 3 onwards if we are still in the Championship.

*You don't really pay. Think of it like buying a new car with actual cash. You buy it for £20K. You now have £20K less cash but now have a nice, shiny car worth £20K. End of the year, your car is probably worth £15k tops if you try and sell it so you have "lost" £5k. In PSR terms, you have "lost" £5K towards your PSR limit.
 
I wonder if we should appeal our three point deduction 🤔 all seemed very harsh given that Keith Lamb was given the impression that everything would be okay to call the game off by one of the officials he spoke to, as the head honcho was out playing golf apparently 😵‍💫 I’d say £500m or so should about cover what what might have been for us 👍🏻😁
 
Andybarca said:
This is a pretty good description of how it works:


For example, let’s say a club signed a player for £50m on a five-year contract. Amortisation means that, rather than the player costing £50m in the year he was signed, they would cost the club £10m in the books each year, or in other words, an annual amortisation fee of £10m.

As for player sales, the profit or loss made on a sale is calculated by taking the subtracting the player’s book value (their remaining amortised value) at the time of the sale from the transfer fee that has been received. So, continuing on with the original example but three years later; the player has now cost the club £30m (£10m X 3 years) of the initial £50m fee meaning his book value is now £20m (£50m-£30m). Therefore, if the club sell the player for £25m, this allows them to book a £5m profit (£25m fee- £20m book value) on the deal for the player in that year’s accounts.

Furthermore, and this is where academy graduates come into it, if a player has a book value of £0, this enables clubs to book a straight profit on a player sale, with the profit being the amount of the fee they have received (e.g. a £50m sale=£50m profit).

A player can have zero book value for multiple reasons, but the main instance is if they do not cost the club a transfer fee. Meaning that, and this is the key takeaway, academy graduates have zero book value, as they do not cost the clubs transfer fees.
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And one gap in the regulations is the use of buyback clauses. Aston Villa have ‘sold’ Archer to Sheffield United for £18 million, Ramsey to Burnley for £14 million and Philogene to Hull City for £6 million. All their contracts are reported to have clauses that allow Villa to buy them back.
As they were all Academy players Villa have now booked profits of £38 million. Despite this they remain in substance Villa players who they can have back if they wish. The deals are really disguised loans. It’s this kind of creative accounting that allowed Villa despite their debts to buy Rogers.
 
I fully expect Everton to appeal a further points deduction on the basis it's not fair to be deducted points twice in one season.

Not think that the first deduction should've been made last year, which would've resulted in them been relegated and Leicester staying up.

A deduction for last seasons failure to comply should really be hampering a promotion charge this season
 
bostonboro said:
I fully expect Everton to appeal a further points deduction on the basis it's not fair to be deducted points twice in one season.
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They're obviously different organisations, but I doubt they'd have a leg to stand in on with that defence.
EFL clubs frequently receive multiple deductions in a season.
Reading have just received their third today.
 
Aren't Geordies committed to buying Lewis Hall from Chelsea for £30 mill at end of season and his current loan.
So maybe have to sell more than just Bruno. Big clubs might be interested in Isak or Gordon.
 
FabioPorkpie said:
What a mess. Imagine you are Luton fans, and you secure 4th bottom in the dying moments of the last game of the season, celebrate like crazy, only to walk away from the ground and have the reality dawn on you that you may still be down and you might not even know for a month or two. Seems incredibly cruel.
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That's the position Coventry were in after our 3 pts deduction. I can't remember when our appeal was heard but it was after the season ended.
 
CG85 said:
Could the solution be any penalties are applied the following season. They get found guilty this season, have all the appeals etc, and the penalty is applied to next season at the end of the appeals so everyone knows where they are.
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I’m fine with this, although the points punishments should be much harsher in such cases. To ensure that getting that extra year prem money isn’t the goal
 
S7DiscoDown said:
Chelsea will almost certainly be the next one. Apparently a fire sale in the summer. Although zero chance of getting remotely the money back on any players they bought. Also good look getting them out the door when sat on 5-6-7 year contracts (who thought that was a good idea😂).
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If the sell a home grown player for £50m that is all profit in that year. However if you sign a player for £80m over 8 years for the accounting period you show a £10m cost so over all on them two deals you make a £40m profit that can be ji22ed else where.
 
S7DiscoDown said:
All punishments need to be in place prior to the season starting. That includes appeals heard and actioned.
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Would be in ideal world but as understand, the end of season accounts are end of either June/July (can’t remember which) and need to be presented to premier league, different date (March ) for football league and then all need to be reviewed. Not possible to charge in time frame before season starts
 
Colgates_shaving_foam said:
The whole process is an absolute shambles.

Why does everything take so long? Why the lack of transparency in what the punishments are? It's all very cloak and dagger and conjures images of a load of old blokes in suits having shady meetings and all a bit nudge nudge wink wink, secret handshakes, see you on the golf course at the weekend approach.
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I think the premier league voted against setting a tariff for the punishment of these rules. So only selfs to blame.
 
S7DiscoDown said:
That article says Forest look Fecked. You can lose 105mil over a 3 year period. They spent 250mil and only recouped 5mil. Even the Brendon Johnson money doesn't count as outside the 3 year window.
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Mental ain’t it? We know the rules, but thought we would ignore them and wait. Is that ok gov? Oh and we only signed 35 players so what’s the issue

That said also feels that it , as a promoted team you need to spend to catch up so is a bit anti competitive…

That said if you increase the loses what’s to stop teas maxing out to gain unfair advantage in promotion season and swallow loses as they hit bit time..
 
Merlin said:
I wonder if we should appeal our three point deduction 🤔 all seemed very harsh given that Keith Lamb was given the impression that everything would be okay to call the game off by one of the officials he spoke to, as the head honcho was out playing golf apparently 😵‍💫 I’d say £500m or so should about cover what what might have been for us 👍🏻😁
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Especially if we mention Roberto Carlos, Des Walker and Gabriel Batistuta…
 
Bruce said:
A concrete example is Matt Crooks. Call it £1.5m when all is said and done.

In PSR terms that 1.5m profit stays on the books for 3 years ... say we made £5m net profit from Rogers and £1.5m from Crooks that's £7.5m which is enough to spend £30m on players with 4 year contracts (£7.5m/year)
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I don't understand.

You've said it stays on the books for 3 years & then you've used a 1 year profit to offset a 4 year expense.

Is it 3 or 4 years?

How does £1 in the hand pay £3 (or £4) in the bush?
 
If Luton go down it’s because they haven’t amassed enough points to stay up. You can’t rely on points deductions to other teams. The whole fair play thing is a sh1t show, especially when you consider Manchester City’s achievements, I would feel aggrieved if I were a Forrest or Everton supporter and suffered relegation because of a penalty whilst watching City life the Premier League trophy.
 
How anybody can feel sorry for Everton is beyond me.
They have lost amounts of money so vast it is ridiculous to think you can offset them all with legitimate P&S allowances of Women, U21, Community, Depreciation, Covid and Fixed Asset revaluation.
They should already be down last season, should be this season and if not then should be next season.
They have repeatedly smirked at the rules and regulations.
 
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