SonofErnie
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11.9%
Championship thread 25/26! (27 Viewers)
- Thread starter shepardo01
- Start date
KenilworthSkyBlue
Well-Known Member
Their strategy is concerning to be honest. The interest payment is significant and there's no real way of repaying it as it stands without coming off Birmingham's bottom line or just accruing year on year.
Their idiot owner is claiming BCFC will have the biggest revenue ever of clubs which haven't received parachute payments - which just isn't possible.
Then there's the issue of profit & sustainability. I would imagine they'll almost certainly be in breach next season if they fail at achieving promotion as their pre-tax losses over the past two years are already over £40m - albeit some of this will be able to be written off e.g. stadium improvements. So then what if they're embargoed and/or receive a points deduction?
The entire strategy they're dreaming up is a complete facade based on fictitious scenarios which aren't even plausible.
SkyBlueStallion_89
Well-Known Member
Luke Evans, the Welsh actor who played Bard in the Hobbit is gay, you couldn't tell looking at him or listening to him, Tyler Bidon sounds posh camp lol
Lamps
Well-Known Member
This has been spoken about on here recently.
There's different rules for League 1 than the Championship. They more or less have a clean sheet to start with. The previous signings don't count as it was more about wages. From now it is something like a 3 year rolling amount of 39m losses. But I agree they have this season to do something but next season may well be different. There's a good chance they spent so much last year on transfers to take full advantage of the rules.
TomRad85
Well-Known Member
Does last season in league one wipe out the previous season in the Championship over that 3 year period? I genuinely don't understand how it works but it feels a little like they discovered a cheat code.
SBAndy
Well-Known Member
I saw people claiming that they were going to build a sports village which they’d generate rent from and this would be the cause of the astronomical revenue.
Back in the real world, no business owner (and certainly not a hedge fund) would ever build something of that nature in the name of the operating company.
Anyway, let’s assume they used up all of their £50m ‘slush fund’ last year (I can only assume it was getting on for full usage given they have had to increase the pot). By the end of this financial year their interest liability will be somewhere in the region of £17m.
KenilworthSkyBlue
Well-Known Member
I'm pretty sure this is completely wrong.
Yes, transfer fees weren't included in the previous regulations therefore wouldn't have counted towards SCMP at the time.
However, with a wage bill that would've inevitably dwarfed the rest of L1's by some distance, their operational losses would've still been significant - especially as TV revenue drops by a sizeable amount as well. I would also imagine their wage bill now has further increased with the latest signings and the inevitable bonuses which they likely inserted into the contracts of marquee signings such as Stansfield last season.
It's not counted from now either. It doesn't just reset because they were relegated.
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Lamps
Well-Known Member
From what I remember they only started spending massive amounts after relegation. But it could make a difference as it's down to losses.
David O'Day
Well-Known Member
Birmingham as far as I am aware do not get the slate wiped clean this season and has been said their 2 year losses are already massive. They spent biggest last season they were at this level, people on here talked about how good their recruitment was.
Lamps
Well-Known Member
In League 1 and 2 the rules are about players wages and similar. SCMC or Salary Cost Management Protocol. The cost of signing players don't count other than their wages. Maybe they might take another look at the rules just in case it happens again. But it's really rare for League 1 and 2 clubs to spend a fortune on transfers.
KenilworthSkyBlue
Well-Known Member
They changed the rules midway through last season due to Birmingham's spending spree.
League One and Two owner investment to be restricted from 2025-26 season
League One and Two clubs will be restricted in the amount of investment from owners that can spend on player wages and transfer fees from the 2025-26 season.
www.bbc.co.uk
Lamps
Well-Known Member
But what were their losses from? IIRC year 1 they were allowed 80% of income to go.on wages then the second year 60% of income.
Sick Boy
Super Moderator
It’s almost like stereotypes aren’t actually true.
KenilworthSkyBlue
Well-Known Member
Player wages alone would've probably exceeded their income last season.
Lamps
Well-Known Member
Still open to abuse. I liked the line 'if owners inject £100m they can only spend £60m'They changed the rules midway through last season due to Birmingham's spending spree.
League One and Two owner investment to be restricted from 2025-26 season
League One and Two clubs will be restricted in the amount of investment from owners that can spend on player wages and transfer fees from the 2025-26 season.
So Birmingham would have been able to spend an extra £60m and kept the other £40m for their new ground build.
Lamps
Well-Known Member
Under the current SCMP rules, League One sides can spend 60% of turnover on wages and transfer fees and League Two sides 50%, but 100% of any equity investment.
This was taken from the link you provided.
KenilworthSkyBlue
Well-Known Member
Yes, and there's categorically no way they would've been able to adhere to those regulations given the players they still had under contract, and those which were bought in.
fernandopartridge
Well-Known Member
Not necessarily a sign they're in for the long term, they're trying to pump up the value of Birmingham so they can flog it asap.
Lamps
Well-Known Member
fernandopartridge
Well-Known Member
It's a maximum of 60% of turnover
Their wage bill in 2023/24 the year they got relegated was £33.7m against a turnover of around £29m.
The turnover might have improved a little in relation to gate receipts in the L1 season and income from getting to Wembley, but they'll have lost around £8-9m from reduced TV income.
The wage bill I doubt has reduced much if at all from then. They'll certainly have breached the 60% cap.
Lamps
Well-Known Member
Look above. For their time in League 1 they were allowed to spend 100% of any equity investment. As they invested a major amount of money the 60% meant nothing to them.
Lamps
Well-Known Member
So loans are not equity investment?
I agree the rules were wrong. That's why they changed them mid season.
fernandopartridge
Well-Known Member
fair enough, they issued £100m worth of shares but that was the previous season - not sure how the timings are calculated tbh
fernandopartridge
Well-Known Member
I've deleted that post as I was wrong, they did issue £100m shares in the parent. Loans are not equity investment though no. Equity investment is selling shares in exchange for capital.
KenilworthSkyBlue
Well-Known Member
From my understanding it was that equity injections could be included in turnover, loans could not. Loans are separate from equity investments.
Lamps
Well-Known Member
So why did the FL change their rules if it didn't count?
KenilworthSkyBlue
Well-Known Member
Didn't they enter into a facility agreement with Knighthead?
Lamps
Well-Known Member
To me they're as dodgy as Leicester on taking full advantage of the rules. I hope it goes tits up for them and after their major spend they end up just mid table after the first season then are limited to their spend over the next 2 seasons.
SkyBlue_Adam
Well-Known Member
It will.. this season Ipswich and Southampton are my guarantees for the Autos, which leaves the play offs, which as we know anything can happen.
And then next year the 3 coming down will be ridiculous, if you look at how Sunderland, Leeds and Burnley have strengthened since going up..
You can only last so long gaining £120k for every £1m spent
fernandopartridge
Well-Known Member
it's a bit circular really, feels like an attempt to disguise debt as equity
share issued in 2023 to BCL (parent of BCFC)
BCL has lent that money then to BCFC
KenilworthSkyBlue
Well-Known Member
Even if I'm wrong and the latest set of accounts aren't considered within the 3 year rolling period due to a ridiculous loophole their strategy is still very rogue and based on a lot of intangibles which aren't even achievable.
If they're unsuccessful in achieving promotion in the next couple of seasons their future will probably be of the highly uncertain variety.
fernandopartridge
Well-Known Member
Classic pump and dump imo
KenilworthSkyBlue
Well-Known Member
Christ this seems like a lot of smoke and mirrors.
Lamps
Well-Known Member
Ipswich I agree with. We saw what their second string did to us. Southampton? Not so sure. Will Still? Add to this can't see Birmingham being better than us. We have a settled side with good players used to this level.
KenilworthSkyBlue
Well-Known Member
It's really difficult to say how Birmingham will do this season as while their recruitment has been gung-ho, it's somewhat random.
As I've mentioned previously I do suspect some of their signings won't deliver the return many expect. For instance, with Gray and Kyogo, it does seem like their best years are probably behind them. But we'll see.