In football accountancy terms, March 1st has been quite important for some time. Back in 2012 it was the day Blues were put into a transfer embargo due to not filing their accounts on time with the authorities, and it’s always been the date that clubs have had to show how and where they are going to get money for the next season.
However, the Financial Fair Play rules were changed for the 2016/17 season to the new “Profitability and Sustainability rules”. Part of the change is that clubs have to provide accounts for the current financial period (ie for this season), and these would be used as the final year of accounting for Financial Fair Play purposes.
I’ve got to admit, I missed this one myself.
I didn’t realise until I read this excellent summary online the other day that the EFL had shuffled the reporting period in such a way – and it has changed my mind about how I feel BCFC will deal with FFP from being concerned to being downright worried.
Without going into too much detail, Blues are allowed to have a maximum of an £5million “deviation from break even” and an £8million cash injection from their owners per season.
Accounts aren’t quite the same as an FFP result as various things like academy expenditure and women’s football aren’t taking into account with respect to FFP, but it will do to give us a ball park figure.
In my “Accounts Analysis” piece on December 10, I wrote how the 2016/7 accounts showed a huge increase in loss from £5million the season before to £16.4million.
In my “Loss Warning” piece from a week or so ago, I wrote about how BSH had warned of an “substantial increase in loss” for the first half of this season.
Taking that figure of a maximum £13mil loss allowed multiplied by three-year account period and you get a £39million loss.
If BCFC make the same loss as they did last year, then their total will be £37.8million over those three years. Throw in a “substantial increase in loss” for this year – and it’s not hard to imagine we’ll be close to or over the limit.
This would credence to my idea that BCFC could have been warned by the EFL about their spending before the January window – which would have prevented them from laying out money on targets for the team.
It would also give credence to my feeling that Blues will still need to be careful with their spending in the summer and it will be another window where it will be more about who goes out than who comes in.
Now it might be that BCFC got enough wiggle room from losing David Cotterill, Emilio Nsue, Stephen Gleeson along with youngsters David Popa and Dan Cleary from the wage bill plus loaning out Ronan Hale and Nicolai Brock-Madsen – but I’m a pessimist where this is concerned and I’m not sure that will be the case.
The EFL have a range of penalties available to them to punish teams which break FFP rules – a transfer embargo being only one of them. There are some that are harsher but I think I’ve been enough of a doom-monger in this article without scaring people further.
The actual interim accounts for BSH at least will be out on Feb 28. That will give us an idea of where the whole BSH group are at – and maybe an idea of how bad the BCFC accounts will be.