| Stoke reduce debt 15:57 - Mar 23 with 4535 views | stantheman10 |
I see Stoke are the latest club to try and bypass FFP by reducing their debt by waiving loans. Isn't that what we tried before getting a £40m fine! |  | | |  |
| Stoke reduce debt on 16:09 - Mar 23 with 4456 views | QPRSteve |
I was wondering the same. £160 million wiped off. Won't be using Bet365 (not that I ever did lol) | | | |
| Stoke reduce debt on 16:36 - Mar 23 with 4365 views | Northernr |
Yeh that's precisely what we did and were told it wasn't allowed - although admitedly that was under the previous set of rules. |  | | |
| Stoke reduce debt on 16:52 - Mar 23 with 4305 views | stevec |
| Stoke reduce debt on 16:36 - Mar 23 by Northernr |
Yeh that's precisely what we did and were told it wasn't allowed - although admitedly that was under the previous set of rules. |
Do loans have anything to do with FFP?
Thought FFP was all about the P&L account |  | | |
| Stoke reduce debt on 17:45 - Mar 23 with 4164 views | Northernr |
| Stoke reduce debt on 16:52 - Mar 23 by stevec |
Do loans have anything to do with FFP?
Thought FFP was all about the P&L account |
Well the losses clubs make are all paid for by 'loans' from shareholders. QPR lose £20m, Ruben pays that by way of a loan, then he converts it to equity in our case. If QPR lose £50m he still does that, but it breaches FFP/P&L because it's more than the £39m permitted.
What we did previously, and what Stoke seem to be doing now, is saying "yeh we've lost £150m, but the shareholders are just going to write it off". Which you can't do - otherwise that's obviously what every club that just wants to financially dope itself up a division would do. You can't spend a billion quid trying to win the Championship and then when the FFP police come calling just say "yeh well it was a gift I've written it off". | | | |
| Stoke reduce debt on 18:35 - Mar 23 with 3999 views | stevec |
| Stoke reduce debt on 17:45 - Mar 23 by Northernr |
Well the losses clubs make are all paid for by 'loans' from shareholders. QPR lose £20m, Ruben pays that by way of a loan, then he converts it to equity in our case. If QPR lose £50m he still does that, but it breaches FFP/P&L because it's more than the £39m permitted.
What we did previously, and what Stoke seem to be doing now, is saying "yeh we've lost £150m, but the shareholders are just going to write it off". Which you can't do - otherwise that's obviously what every club that just wants to financially dope itself up a division would do. You can't spend a billion quid trying to win the Championship and then when the FFP police come calling just say "yeh well it was a gift I've written it off". |
I see, that’s a good explanation.
I may be wrong about this, but even if the owners write off their loans to the club I can’t imagine that would have any bearing on their FFP situation.
Again, I think all it will mean is the club don’t have to pay the owners back in the future as the loan is wiped out, but the losses will still count against FFP.
That seems fair as a) the club still has to adhere to FFP but b) at least the owners can’t hold a club to ransom over the personal loans whenever they decide to sell up.
I could be completely wrong about the mechanics of this though! | | | |
| Stoke reduce debt on 18:37 - Mar 23 with 3999 views | nadera78 |
| Stoke reduce debt on 17:45 - Mar 23 by Northernr |
Well the losses clubs make are all paid for by 'loans' from shareholders. QPR lose £20m, Ruben pays that by way of a loan, then he converts it to equity in our case. If QPR lose £50m he still does that, but it breaches FFP/P&L because it's more than the £39m permitted.
What we did previously, and what Stoke seem to be doing now, is saying "yeh we've lost £150m, but the shareholders are just going to write it off". Which you can't do - otherwise that's obviously what every club that just wants to financially dope itself up a division would do. You can't spend a billion quid trying to win the Championship and then when the FFP police come calling just say "yeh well it was a gift I've written it off". |
I'm curious to see what happens with the sale of Chelsea. Abramovich had said he'd write off the debts but wouldn't that fall foul of FFP? Yet at the same time, the government can't be seen to insist on the new owners paying off the debts to Abramovich and him walking away with £2bn. So what's going to happen? Fairly sure they'll just wipe it and pretend it never happened, but if so I hope every other club kicks up a stink. | | | |
| Stoke reduce debt on 18:38 - Mar 23 with 3990 views | bosh67 |
| Stoke reduce debt on 16:36 - Mar 23 by Northernr |
Yeh that's precisely what we did and were told it wasn't allowed - although admitedly that was under the previous set of rules. |
Does anyone on here have a DeLorean ? Perhaps we can bring our FFP debt into the future? |  |
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| Stoke reduce debt on 14:22 - Mar 24 with 3448 views | Benny_the_Ball |
| Stoke reduce debt on 18:35 - Mar 23 by stevec |
I see, that’s a good explanation.
I may be wrong about this, but even if the owners write off their loans to the club I can’t imagine that would have any bearing on their FFP situation.
Again, I think all it will mean is the club don’t have to pay the owners back in the future as the loan is wiped out, but the losses will still count against FFP.
That seems fair as a) the club still has to adhere to FFP but b) at least the owners can’t hold a club to ransom over the personal loans whenever they decide to sell up.
I could be completely wrong about the mechanics of this though! |
If the loans are written off then there is less loss to report and FFP impact is therefore reduced.
In simple terms, if I were to lend you £50 then your accounts would show an outstanding debt of £50 to me, which counts towards your losses. If I then suddenly wrote it off then the debt disappears from your accounts and your losses are reduced. |  | | |
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| Stoke reduce debt on 15:53 - Mar 24 with 3355 views | dmm |
| Stoke reduce debt on 14:22 - Mar 24 by Benny_the_Ball |
If the loans are written off then there is less loss to report and FFP impact is therefore reduced.
In simple terms, if I were to lend you £50 then your accounts would show an outstanding debt of £50 to me, which counts towards your losses. If I then suddenly wrote it off then the debt disappears from your accounts and your losses are reduced. |
Then can you lend me £50 Benny?  |  | | |
| Stoke reduce debt on 16:01 - Mar 24 with 3332 views | slmrstid |
| Stoke reduce debt on 14:22 - Mar 24 by Benny_the_Ball |
If the loans are written off then there is less loss to report and FFP impact is therefore reduced.
In simple terms, if I were to lend you £50 then your accounts would show an outstanding debt of £50 to me, which counts towards your losses. If I then suddenly wrote it off then the debt disappears from your accounts and your losses are reduced. |
Correct Benny but I'm not sure that the write-off is loans is an allowable expense now under FFP. Could be wrong though but I didn't think it was.
What it can help do though for sure is strengthen the club's balance sheet ahead of any finance applications/future sale of the club. I'd be doubtful that the Coates family are heading in that direction yet though. |  | | |
| Stoke reduce debt on 16:25 - Mar 24 with 3269 views | CliveWilsonSaid |
I'm not sure they can just right off loans either. Isn't that the same as bank rolling the club which is what ffp is supposed to stop? |  |
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| Stoke reduce debt on 18:36 - Mar 24 with 3118 views | themodfather |
maybe cute by stoke, they announce the write off early enough, the EFL can look at it as they see fit and as stoke have not been evasive whatever, if they do cop a deduction , it would likely be lower, derby dragged it out and copped a big un imo. stoke would stay clear of drop zone . | | | |
| Stoke reduce debt (n/t) on 18:41 - Mar 24 with 3107 views | terryb |
| Stoke reduce debt on 14:22 - Mar 24 by Benny_the_Ball |
If the loans are written off then there is less loss to report and FFP impact is therefore reduced.
In simple terms, if I were to lend you £50 then your accounts would show an outstanding debt of £50 to me, which counts towards your losses. If I then suddenly wrote it off then the debt disappears from your accounts and your losses are reduced. |
[Post edited 24 Mar 2022 18:47]
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| Stoke reduce debt on 18:52 - Mar 24 with 3069 views | stevec |
| Stoke reduce debt on 14:22 - Mar 24 by Benny_the_Ball |
If the loans are written off then there is less loss to report and FFP impact is therefore reduced.
In simple terms, if I were to lend you £50 then your accounts would show an outstanding debt of £50 to me, which counts towards your losses. If I then suddenly wrote it off then the debt disappears from your accounts and your losses are reduced. |
Except loans don’t go on the P&L account, they’re a balance sheet item. | | | |
| Stoke reduce debt on 08:48 - Mar 25 with 2820 views | slmrstid |
| Stoke reduce debt on 16:25 - Mar 24 by CliveWilsonSaid |
I'm not sure they can just right off loans either. Isn't that the same as bank rolling the club which is what ffp is supposed to stop? |
Any business owner is able to write-off debt owed, so they are very much allowed to do that. Whether its allowable as part of your FFP calculations is another matter, and I don't believe it is.
For simplicities sake - a business that has lost £20m in a year, but writes off £60m of owner loans would in effect have a "profit" of £40m.
For FFP though I'm pretty sure the loss would be £20m still with the £60m write-off not counted as part of it. | | | |
| Stoke reduce debt on 09:10 - Mar 25 with 2748 views | OldPedro |
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| Extra mature cheddar......a simple cheese for a simple man |
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| Stoke reduce debt on 13:13 - Mar 25 with 2535 views | Irish_Hoop |
| Stoke reduce debt on 18:52 - Mar 24 by stevec |
Except loans don’t go on the P&L account, they’re a balance sheet item. |
Yes but when you write off the loan the release of the debt is income in your P&L | | | |
| Stoke reduce debt on 14:21 - Mar 25 with 2451 views | Benny_the_Ball |
| Stoke reduce debt on 08:48 - Mar 25 by slmrstid |
Any business owner is able to write-off debt owed, so they are very much allowed to do that. Whether its allowable as part of your FFP calculations is another matter, and I don't believe it is.
For simplicities sake - a business that has lost £20m in a year, but writes off £60m of owner loans would in effect have a "profit" of £40m.
For FFP though I'm pretty sure the loss would be £20m still with the £60m write-off not counted as part of it. |
I think that depends on how it's 'written off'. QPR converted loans into equity. I suspect that Stoke will have done something similar. | | | |
| Stoke reduce debt on 14:23 - Mar 25 with 2448 views | Benny_the_Ball |
| Stoke reduce debt on 15:53 - Mar 24 by dmm |
Then can you lend me £50 Benny? |
Sorry, my money's already been converted into equity (my code word for the wife). | | | |
| Stoke reduce debt on 14:25 - Mar 25 with 2447 views | Benny_the_Ball |
| Stoke reduce debt on 13:13 - Mar 25 by Irish_Hoop |
Yes but when you write off the loan the release of the debt is income in your P&L |
Exactly.
The leg bone's connected to the knee bone,
The knee bone's connected to the thigh bone,
The thigh bone's connected to the hip bone... | | | |
| Stoke reduce debt on 16:40 - Mar 25 with 2362 views | stowmarketrange |
| Stoke reduce debt on 14:21 - Mar 25 by Benny_the_Ball |
I think that depends on how it's 'written off'. QPR converted loans into equity. I suspect that Stoke will have done something similar. |
All they need to do is get bet365 to pay them £100 a season for the naming rights for the stadium and it’s job done. |  | | |
| Stoke reduce debt on 16:53 - Mar 25 with 2320 views | RangersDave |
Bet365 have recently (last 2 months) taken on all responsibility for the finances of Stoke. It is all now managed from the 365 building (money matters, that is) |  |
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| Stoke reduce debt (n/t) on 17:28 - Mar 25 with 2261 views | distortR |
| Stoke reduce debt on 14:22 - Mar 24 by Benny_the_Ball |
If the loans are written off then there is less loss to report and FFP impact is therefore reduced.
In simple terms, if I were to lend you £50 then your accounts would show an outstanding debt of £50 to me, which counts towards your losses. If I then suddenly wrote it off then the debt disappears from your accounts and your losses are reduced. |
[Post edited 25 Mar 2022 17:29]
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