| FFP decision in - not good 14:01 - Oct 24 with 55336 views | Northernr |
Arbitration found in favour of the league, basically protecting its role as a lawmaker that can set the rules for its competition as it sees fit. It leaves QPR liable to paying the fine in full, £40m-£60m
https://www.qpr.co.uk/news/club-news/qpr-financial-fair-play-dispute/
The club will be launching an appeal against this which will basically drag the whole thing on for another two years or so. They've a good chance in that, on the grounds of proptionality - you can fine HSBC £1.4bn but you can't fine the local Spar Shop the same amount for the same offence. Basically leaves the whole club, everybody that works there, the training ground development and us supporters in limbo for another two years. But yeh, at least Harry won us a promotion right?
Hopefully critics of Ferdinand, Hoos, Holloway, even Hasselbaink, and basically everybody that's been left to clear up the mess left by Hughes, Redknapp, Beard and most of all Fernandes previously now appreciate what a fcking tight spot they're all in.
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| FFP decision in - not good on 18:02 - Oct 26 with 3414 views | CroydonCaptJack |
| FFP decision in - not good on 17:16 - Oct 26 by Trom |
That's not the way accounting standards work.
As soon as an expense is probable it needs to be put through the P&L and a liability created in the balance sheet. When it's paid all that happens is the cash in the balance sheet goes down and the liability is extinguished. So the comment "until we actually pay it, it doesn't have to go in P & L." isn't correct.
What we have here is known as a contingent liability. Meaning essentially a liability that is dependent on future events. In this case the arbitration and following appeals. I'm a bit rusty on this but the rules used to be that if crystallisation of the liability was possible you just needed to disclose in the accounts but not include in the P&L and B/S, however, if it was probable you needed to account for it. |
I am a bit rusty as well but that is how I remember it.
I suspect they will need to provide for it. However, the amount to provide will be a challenge!
Or maybe they can disclose it in a note to the Accounts.
Anyone on here more up to date on this issue? |  | | |
| FFP decision in - not good on 18:04 - Oct 26 with 3402 views | Brightonhoop |
It would be crazy if we then risk being fined again the following year based on settling on a fine to the FL. |  | | |
| FFP decision in - not good on 18:17 - Oct 26 with 3363 views | francisbowles |
| FFP decision in - not good on 12:31 - Oct 26 by QPR_John |
No expert so open to being wrong but if we did go to the wall I assume payment of the fine would be way down the line below any genuine debts to third parties with HMRC top of list. The FL would be left with nothing and be in the position of destroying one ot its own members. Maybe they do not mind as far as I know we are not getting much reporting in the media over this. FFP was never devised one would hope to force clubs out of business. [Post edited 26 Oct 2017 12:38]
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This fine is not going to stay with the football league it is going to charity, so the football league doesn't profit from it either way.
So if we did go bankrupt one of our creditors (indirectly) would be charity(ies) unknown.
Perhaps if we were bankrupt the football league could nominate us as the charity! |  | | |
| FFP decision in - not good on 18:27 - Oct 26 with 3351 views | BazzaInTheLoft |
Anyone else feeling a bit guilty about feeling indifferent about it?
Obviously I would be devastated if my football club folded (this is my only worry) but if it turned out to be a survivable fine, I really couldn't care less. I've quite enjoyed austerity QPR so far. Feels like home again
Does that make me a bad supporter? |  | | |
| FFP decision in - not good on 18:30 - Oct 26 with 3345 views | PinnerPaul |
| FFP decision in - not good on 18:44 - Oct 25 by Northernr |
No I agree with a lot of that post mate, you're always very fair.
In David's defence, who asked both those questions, he'd asked for questions from twitter and those are the ones people wanted to ask, along with the usual "are we going to sign a striker/centre back in January" mindfck. I hold my hand up to the balance sheet/P and L thing, think that was me, but even the Telegraph has queried whether a fine would see us breach FFP in the future so it's a valid point to clear up for people not as business savvy.
I was genuinely asking what you'd ask, not being arsy about it, so no need to apologise. None of us were particularly happy with how it went TBH and we had a big discussion long into the night afterwards about whether we could have done it differently and if so how and if it was worth doing at all etc etc.
When people (not you) are giving it the 'celebrity fan wannabe' and 'club mouthpiece' and 'attention seeker' stuff I'd like them to see how much work and effort goes into stuff like that, I'd like to see them do better and certainly in my case how much we beat ourselves up over stuff that hasn't gone quite right afterwards. |
Fair enough Clive - as always.
Questions that have come to me over last 24 hours (Sorry only come on here once a day, now I'm not at work!)
1) Have the club accepted that they did break the rules as they were at the time and are now just appealing the size of the fine?
2) Related to that - although what the club did with the £60M 'credit' from the owners, was perfectly legal and signed off by the auditors - does the club accept that it was indeed against the FFP rules at the time?
3) Presumably the appeal will go before 3 new independent QCs - are you able to confirm that?
4) If such an appeal were unsuccessful and the fine remained the same, would the club accept that or pursue the matter further - the Evening Standard mentioned the possibility of the club taking the case to the court of arbitration in Lausanne. Obviously there is also the court of law option in the UK - are these avenues being explored?
5) The FL have said, that once the matter is finally concluded they want to 'work with (the club)' in relation to the fine - what do you infer from that comment?
6) Do you have a timescale in mind for the conclusion, one way or the other, of this?
7) You have done much excellent work on getting the club on a sound financial footing and working to a sensible business model - how much has this verdict affected your own personal morale and approach to your job going forward?
Perhaps you could get him on again? 
I don't suppose he would/could answer any of them though, so probably a waste of time.
Seriously - I see the Evening Standard quoted large parts of the interview last night - so it WAS a pretty good scoop!
Cheers | | | |
| FFP decision in - not good on 18:35 - Oct 26 with 3329 views | PinnerPaul |
| FFP decision in - not good on 22:50 - Oct 25 by philc |
I don't have a link but normally I'd expect something like this to be classed as an exceptional item which means it is deducted after the declared profit / loss. Exceptional is as it sounds i.e. not a normal business expense. |
I agree - the FL excluded the credit from the owners from the FFP calculation - although it was perfectly legal and signed off by independent auditors - so no doubt they would do the same over any fine.
As I said above we don't have to include that in the P & L until its actually paid, so definitely won't be in this (17/18) year's accounts. | | | |
| FFP decision in - not good on 18:38 - Oct 26 with 3322 views | PinnerPaul |
| FFP decision in - not good on 09:53 - Oct 26 by bosh67 |
I grow bored of this QPR disaster. Bring me another! |
Think that can be arranged if you don't mind waiting until about 4.45pm on Saturday!  | | | |
| FFP decision in - not good on 18:44 - Oct 26 with 3307 views | PinnerPaul |
| FFP decision in - not good on 17:16 - Oct 26 by Trom |
That's not the way accounting standards work.
As soon as an expense is probable it needs to be put through the P&L and a liability created in the balance sheet. When it's paid all that happens is the cash in the balance sheet goes down and the liability is extinguished. So the comment "until we actually pay it, it doesn't have to go in P & L." isn't correct.
What we have here is known as a contingent liability. Meaning essentially a liability that is dependent on future events. In this case the arbitration and following appeals. I'm a bit rusty on this but the rules used to be that if crystallisation of the liability was possible you just needed to disclose in the accounts but not include in the P&L and B/S, however, if it was probable you needed to account for it. |
Sooooooo we could reasonably argue that as the fine is only possible, as its subject to at least one more appeal and therefore does not have to go in either P & L or balance sheet, which is what I said. | | | |
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| FFP decision in - not good on 19:04 - Oct 26 with 3275 views | Northernr |
| FFP decision in - not good on 18:30 - Oct 26 by PinnerPaul |
Fair enough Clive - as always.
Questions that have come to me over last 24 hours (Sorry only come on here once a day, now I'm not at work!)
1) Have the club accepted that they did break the rules as they were at the time and are now just appealing the size of the fine?
2) Related to that - although what the club did with the £60M 'credit' from the owners, was perfectly legal and signed off by the auditors - does the club accept that it was indeed against the FFP rules at the time?
3) Presumably the appeal will go before 3 new independent QCs - are you able to confirm that?
4) If such an appeal were unsuccessful and the fine remained the same, would the club accept that or pursue the matter further - the Evening Standard mentioned the possibility of the club taking the case to the court of arbitration in Lausanne. Obviously there is also the court of law option in the UK - are these avenues being explored?
5) The FL have said, that once the matter is finally concluded they want to 'work with (the club)' in relation to the fine - what do you infer from that comment?
6) Do you have a timescale in mind for the conclusion, one way or the other, of this?
7) You have done much excellent work on getting the club on a sound financial footing and working to a sensible business model - how much has this verdict affected your own personal morale and approach to your job going forward?
Perhaps you could get him on again?
I don't suppose he would/could answer any of them though, so probably a waste of time.
Seriously - I see the Evening Standard quoted large parts of the interview last night - so it WAS a pretty good scoop!
Cheers |
Mate fair enough, they're good.
I suspect he'd have refused 1 and 2, said 'we're still considering our appeal options' to 3. 4 either gone with 'cross that bridge when we come to it' or 'considering our options' again although from what I understand they believe there are two further lines of appeal they can go down from here, 5 he might have had a stab at saying they don't want to bankrupt a member club, 6 he'd have answered, up to two years, and 7 he'd have answered although given the stick we've already had effectively asking "how you all feeling in yourselves" wouldn't have gone down well.
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| FFP decision in - not good on 20:23 - Oct 26 with 3169 views | bosh67 |
Yes mainly a sensible bunch. |  |
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| FFP decision in - not good on 19:52 - Oct 27 with 2839 views | Trom |
| FFP decision in - not good on 18:44 - Oct 26 by PinnerPaul |
Sooooooo we could reasonably argue that as the fine is only possible, as its subject to at least one more appeal and therefore does not have to go in either P & L or balance sheet, which is what I said. |
Well, it's not for the club to decide probable that's the job of the auditors. I'd imagine having failed in arbitration it would move from possible to probable. I'd imagine the main wrangling will be the size of the provision in the P&L rather than it's existence but who knows.
Not sure who the clubs auditors are. If it's a large firm then there's reputational risk for the audit firm due to the high profile nature of QPR and the fine. I'd imagine it will be a serious cause of discussion and debate between the auditors and the club. |  | | |
| FFP decision in - not good on 20:24 - Oct 27 with 2788 views | Roller |
I'm certain that FFP fines incurred are excluded from future FFP computations.
I'm spending more time thinking about transfer fees. These are spread over the duration of the player's contract for FFP purposes, so, as an example, we still have £2 million of Caulker's transfer in this season's figures. I don't know if the published accounts treat them in the same manner. If they do then all well and good, if they don't then the £11 million loss for the accounts ending May 16 is almost certainly understated as far as FFP is concerned. There will be £2 million for Caulker to add in, and without checking, possibly amounts for Sandro and Fer among others. There will also be transfer fees to defer but I doubt that they will be as large.
I asked a version of this question to QPR Business and am told that I will get it answered in this round of videos, but I was less certain of my facts then and may have got the question wrong. |  | | |
| FFP decision in - not good on 09:16 - Oct 28 with 2593 views | terryb |
| FFP decision in - not good on 20:24 - Oct 27 by Roller |
I'm certain that FFP fines incurred are excluded from future FFP computations.
I'm spending more time thinking about transfer fees. These are spread over the duration of the player's contract for FFP purposes, so, as an example, we still have £2 million of Caulker's transfer in this season's figures. I don't know if the published accounts treat them in the same manner. If they do then all well and good, if they don't then the £11 million loss for the accounts ending May 16 is almost certainly understated as far as FFP is concerned. There will be £2 million for Caulker to add in, and without checking, possibly amounts for Sandro and Fer among others. There will also be transfer fees to defer but I doubt that they will be as large.
I asked a version of this question to QPR Business and am told that I will get it answered in this round of videos, but I was less certain of my facts then and may have got the question wrong. |
Roller, I can't guarentee this is correct, but here goes with my understanding!
1) The transfer fee wouldn't appear in the P&L. This is an asset item & as such is a Balance Sheet transaction.
2) Depreciation on the purchase fee would appear on the P&L & this would be spread over the length of the contract.
3) If the said player is transferred out before the end of his contract, the suprlus/deficit on the fee's become a P&L item.
See you in the pub! | | | |
| FFP decision in - not good on 10:38 - Oct 28 with 2529 views | PinnerPaul |
| FFP decision in - not good on 19:52 - Oct 27 by Trom |
Well, it's not for the club to decide probable that's the job of the auditors. I'd imagine having failed in arbitration it would move from possible to probable. I'd imagine the main wrangling will be the size of the provision in the P&L rather than it's existence but who knows.
Not sure who the clubs auditors are. If it's a large firm then there's reputational risk for the audit firm due to the high profile nature of QPR and the fine. I'd imagine it will be a serious cause of discussion and debate between the auditors and the club. |
Fair enough - no right or wrong in accounting - just opinions after all! | | | |
| FFP decision in - not good on 11:40 - Oct 28 with 2474 views | Roller |
| FFP decision in - not good on 09:16 - Oct 28 by terryb |
Roller, I can't guarentee this is correct, but here goes with my understanding!
1) The transfer fee wouldn't appear in the P&L. This is an asset item & as such is a Balance Sheet transaction.
2) Depreciation on the purchase fee would appear on the P&L & this would be spread over the length of the contract.
3) If the said player is transferred out before the end of his contract, the suprlus/deficit on the fee's become a P&L item.
See you in the pub! |
That makes perfect sense Terry, thank you. There is a chunky amortisation figure in the accounts to backup your thinking. | | | |
| FFP decision in - not good on 12:04 - Oct 28 with 2458 views | Westy75 |
| FFP decision in - not good on 18:27 - Oct 26 by BazzaInTheLoft |
Anyone else feeling a bit guilty about feeling indifferent about it?
Obviously I would be devastated if my football club folded (this is my only worry) but if it turned out to be a survivable fine, I really couldn't care less. I've quite enjoyed austerity QPR so far. Feels like home again
Does that make me a bad supporter? |
I feel exactly the same to be honest mate. Other than the early 90s my favourite years were under Ollie in division 3 when we didn't have a pot to piss in. Know a lot of others that feel the same too. Once I concluded that getting to the prem and trying to survive was a bit of a hollow dream and not a lot of fun, bouncing around in the lower divisions seems pretty appealing. |  | | |
| FFP decision in - not good on 13:23 - Oct 31 with 2239 views | R_from_afar |
Not sure if any of you have seen this yet:
http://www.qpr1st.com/news/financial-fair-play/
Just for info.
RFA |  |
| "Things had started becoming increasingly desperate at Loftus Road but QPR have been handed a massive lifeline and the place has absolutely erupted. it's carnage. It's bedlam. It's 1-1." |
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| FFP decision in - not good on 14:58 - Oct 31 with 2184 views | PinnerPaul |
Well that last line has been covered in comments above about limited companies.
Fines imposed on limited companies are paid by the companies not from the directors' own pockets - that's what the 'limited' means - limited personal liability as far as owners/directors are concerned. | | | |
| FFP decision in - not good on 15:18 - Oct 31 with 2152 views | bosh67 |
| FFP decision in - not good on 14:58 - Oct 31 by PinnerPaul |
Well that last line has been covered in comments above about limited companies.
Fines imposed on limited companies are paid by the companies not from the directors' own pockets - that's what the 'limited' means - limited personal liability as far as owners/directors are concerned. |
A fine will be negotiated down and we'll be okay. The investors will probably still cover it by loaning the company money or something that may well help them legally avoid tax or something. | |
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