6 + 2 Point Deductions

[Titus Bramble]

They’re just gonna do what they want anyway.

This, really

 

[pfim]

Thanks mate.

This is the bit where we say "can i just go back to watching football and not bothering with all this figures nonsense!" but this is where we are.

I used to run a small restaurant and had to purchase 3 mini ovens for various reasons and the accountant said dont worry about the cost we can add depreciation in and i never did ask him why , bit silly really as it obviously benefitted us, as per Spurs !

You're still buying the ovens, it's a cash expense.

Accrual accounting just allows you to spread that expense over their useful life. Let's say you buy the ovens now and you think they'll last 5 years, you're paying cash (whether it's cash or financing) for the asset now, though you're receiving the benefit of the asset over 5 years.

Compare that to normal expenses like food...you're probably not keeping more than a years worth of inventory, so those are expensed in the year they're purchased and used.

 

[mahermi1]

Wagebill for Spurs is about 45% of their turnover.

And there lies the incredible difference there squad is massive and filled with players we can only dream of.

 

[Blue peter]

I don't think that argument will land because it's two separate charges. All they've said is one PSR charge shouldn't exceed the 9 points for admin, but that wouldn't apply to multiple ones landing in the same season.

A more plausible angle is that you shouldn't receive two points deductions in one season on what is by definition an annual offence. There's the popular argument that we delayed the first charge and so that's our fault but I think it's a rebuttable argument - we were charged in March, the PL asked if it could be done by May, we said that wasn't enough time for due process and, crucially the IC agreed with us. So it was delayed til this season by the IC themselves.

They held our argument to be correct, and if we raised a point that was correct I don't think they can take negative inference on it later. The blame for our first charge being delayed til this season lies with the PL as their rules (now changed) meant charging it too late in the season, as the IC held. So in actual fact it's the PLs fault we have faced two charges in one season.

Then of course you have all the double punishment arguments about the previous seasons but that's been done to death.

In addition to the above, surely any IC ruling can also determine the effective date of any sanction they hand out. It would be grossly unfair to be punished not only for two thirds of a breach which has already been punished, but also in the same season. So whilst they may hear the case this season, do they have it in their power to rule that any points deduction only takes effect in the 24-25 season?

 

[Bebeto]

I'm just going off of what's in this thread. I haven't looked at their statements, I doubt the stadium is the only depreciable asset in that number.

It's not fishy. The stadium will have a total cost once it's completed. That is divided by 40 years. There's your depreciation expense. It's all governed by accounting standards.

So I understand correctly, spurs built a new stadium and were able to have the cost of the build excluded from psr whilst building it, and now are able to claim depreciable asset on a new stadium for which none of the build cost was included in psr before...looks to me like a fantastic loophole...

 

[SerenityNigh]

Thanks mate.

This is the bit where we say "can i just go back to watching football and not bothering with all this figures nonsense!" but this is where we are.

I used to run a small restaurant and had to purchase 3 mini ovens for various reasons and the accountant said dont worry about the cost we can add depreciation in and i never did ask him why , bit silly really as it obviously benefitted us, as per Spurs !

Hah! The idea there I think is that depreciation reduces your tax liability, so even though it costs $$ up front you save it on your taxes. That said, accountants fight battles on paper and you fight battles at the bank so it's not always the same.

 

[anton66]

So I understand correctly, spurs built a new stadium and were able to have the cost of the build excluded from psr whilst building it, and now are able to claim depreciable asset on a new stadium for which none of the build cost was included in psr before...looks to me like a fantastic loophole...

Sly6.

 

[tonyhorne]

No, once they've finally buried us and made their big example they'll probably rethink the rules and replace it with slapped wrists all round.

I bet this is what happens ...

 

[Tony’s Carp]

In addition to the above, surely any IC ruling can also determine the effective date of any sanction they hand out. It would be grossly unfair to be punished not only for two thirds of a breach which has already been punished, but also in the same season. So whilst they may hear the case this season, do they have it in their power to rule that any points deduction only takes effect in the 24-25 season?

They can pretty much do anything they like, and so yes they definitely could impose a deduction for next season instead.

It's perfectly plausible they might, albeit they may add the caveat that they would be willing to apply a second deduction NEXT season if there's another breach this season - as we would have fair warning of the possibility and time before the end of the FY to avoid the breach.

Foreseeability of a possible second sanction next season would be better than two sanctions this season caused by a change in process agreed after both offences had occurred. As a practical upside it would also allow any appeal process to play out without effecting or even going over the end of this season. We are weeks behind Forest so an appeal for us would conclude very very late now.

A couple of months ago we'd have probably preferred to swallow both charges this season but the way the relegation picture is now I'm really not so sure.

 

[PITA]

Thanks. What i found difficult fathom was the formula used for calculating the depreciation. If their is a set accounting formula that is universally accepted by the HMRC then fine. However if their isn't, then it seems to me numbers can be made up out of thin air in order to manipulate the figures. Thanks for clarifying.

Accounting depreciation is not the same thing as tax depreciation and companies can 'massage' their depreciation numbers for financial reporting purposes.

 

[SerenityNigh]

So I understand correctly, spurs built a new stadium and were able to have the cost of the build excluded from psr whilst building it, and now are able to claim depreciable asset on a new stadium for which none of the build cost was included in psr before...looks to me like a fantastic loophole...

you probably don't understand correctly

 

[JimmyK]

They can pretty much do anything they like, and so yes they definitely could impose a deduction for next season instead.

It's perfectly plausible they might, albeit they may add the caveat that they would be willing to apply a second deduction NEXT season if there's another breach this season - as we would have fair warning of the possibility and time before the end of the FY to avoid the breach.

Foreseeability of a possible second sanction next season would be better than two sanctions this season caused by a change in process agreed after both offences had occurred. As a practical upside it would also allow any appeal process to play out without effecting or even going over the end of this season. We are weeks behind Forest so an appeal for us would conclude very very late now.

A couple of months ago we'd have probably preferred to swallow both charges this season but the way the relegation picture is now I'm really not so sure.

I don't like speculating about whats going to happen because nobodys got a clue but this is my big hope. That they decide its too late in the day to have us appealing a decision and relegation not being sorted until after the season and maybe leaving themselves open to legal action from affected clubs so they just defer or minimise the punishment to stop us appealing at all.

 

[matty1878]

not winning in 3 months and recording 6 points from 36 is what is sending us down Matty.

PSR is just a punch in the balls

and that

 

[matty1878]

you probably don't understand correctly

i don’t

 

[Tony’s Carp]

I don't like speculating about whats going to happen because nobodys got a clue but this is my big hope. That they decide its too late in the day to have us appealing a decision and relegation not being sorted until after the season and maybe leaving themselves open to legal action from affected clubs so they just defer or minimise the punishment to stop us appealing at all.

It should probably always be the case that points deductions apply to the following season (if they really must be used at all) to avoid the chaos we have now. It would, reluctantly, be a practical solution in our case, particularly with the possibility that Leicester will also have one applied next season for the same season.