Of course, it has relevance to the charge. Even with crystalized COVID losses we would have still failed P&S rules. We presented the Premier League with unaudited accounts that we assured the Premier League would pass the P&S rules when the uncrystallized COVID losses were crystallized.
The Premier League took us at our word. Our whole defence is based on the notion that we would have passed P&S if it were not for a depressed transfer market resulting in lower player trading profits and higher amortisation and wages.. We were not able to quantify those losses in the 20/21 accounts. BDO have resigned and laughably we still haven't quantified those losses in these accounts.
This is what the club stated in the last accounts.
Please note the table above does not include uncrystallised COVID-19
pandemic related losses arising from the significant deterioration in the
player trading market. The ability of the Club to generate material profits on
player trading, which also yields significant wage and amortisation savings
due to the players no longer being contracted to the Club, has unquestionably
resulted in a material and negative impact on the Club across the last three
reporting periods.
The Club is continuing to assess the uncrystallised financial impact caused
by the COVID-19 pandemic and the Board of Directors strongly believe that
a further substantial financial loss, not reflected in the £90.4m cumulative
crystallised figure referred to above, has been incurred by the Club
No wonder BDO ran for the hills.
Our defence to the P&S losses is that we lost money because of COVID, we can't quantify it but we are still working on it. It exemplifies everything that is wrong with the way the club has been run for decades.
Well theres a lot in this, which I will try to deal with sequentially.
It doesnt really matter if BDO left, or we left them or whatever. As I keep saying, you can have as many different Accounts Teams as you wish. There is no rule against that in the rulebook.
As for the 2nd point, I would be surprised if the write downs previously are the issue, as they have previously signed off those write downs. I suspect they were unhappy with something in year 21/22 but I'm not entirely sure what.
The board, from what I can see are perfectly entitled to have write downs. It's one of these strange things football fans get irate about, but honestly this is very common outside of football, and nobody gets the least bit offended by it. I have seen accounting 100 x more dubious on income statements which is easily accepted.
Income statements, P&L etc are essentially trash beyond the top line. I have no idea who thought it a sensible idea from footballs authorities to make that the point of focus and not the balance sheet/cash flow statement. But that's football for you. Either way, the club are perfectly entitled to do write downs, and the PL accepted them, both by not charging the accounts, accepting the accounts, and re affirming that on multiple occasions subsequently.
Those write downs are a bit of a diversion really though, for the exact reason you state, which is that the P&L loss is too big even with those write downs. I'm curious as to what the clubs defence is?
There is of course legitimate questions about how stringent any punishment for what amounts to quite a narrow miss should be (it shouldn't really be more than a warning, but football is corrupt so who knows) but I cant see how they are saying they haven't broken the rules as they stand. Maybe that will become apparent to me. But the PL dont need to change their view on the write downs. That part confuses me a little.
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