QPR accounts

[Goldstone1976]

Can't see write off of owners loan in *Exclusions in attached. If owners can effectively lend money to the club and write it off at will can't see how FFP can ever work

http://www.financialfairplay.co.uk/financial-fair-play-explained.php

They're obviously trying it on to see if it flies with the FL. While the exclusions list in the link you provided certainly don't say a loan write-off is an acceptable way to avoid FFP transgression penalties, the list is NOT exhaustive.

The relevant clause says: "A club is also entitled to apply to the FFP panel to have certain exceptional items excluded form the FFP result in a particular year. Such as:..." and then three examples (my emphases)

So - it's not a coincidence that QPR have used the phrase "exceptional item" on the face of their P&L, and the "such as..." bit in the regulations provides a possible get out of jail free card, since it's not saying that the following three exceptions are the only ones that would be permissible.

It will be a travesty if the FL allow a loan write off to be acceptable; it would render FFP totally toothless.

This one has some way to run yet, I think...

 

[Pavilionaire]

If this loan write-off is allowed to stand then FFP goes out the window. If the owner is rich enough to take the hit - as the QPR owners have done here - then it means every owner with sufficient wealth will do what they have done, i.e. buy your way back into the Prem if relegated.

In theory, Tony Bloom could spend £25million this summer on players and wages and simply write off a sufficient chunk of his £100million+ loans to make the loss for the year just under the permitted FFP level. It won't make any difference to him. Indeed, you could argue he'd be incentivised to do it because if he got the club into the Prem he could sell the club for a much higher sales price.

 

[Goldstone1976]

They paid 60 m to avoid a 57 m fine?

No. The owners had already put (more than) £60m into QPR and decided to write that loan off. If they hadn't done so, they'd have had to have paid ANOTHER £57m. It does mean that they can't get the £60m back that they've written off, but I suspect they didn't really expect to anyway...

 

[Triggaaar]

It's not strictly illegal what they have done.

But the law is normally based on hiding profits to avoid paying tax. We're not talking about the law, we're talking about allowable costs and payments in the context of FFP. Owners have always been allowed to write off debt, but for FFP calculations there is a limit as to how much they can write off.

Surely this is simply a case of QPR trying it on, and the FL saying no, that's not allowed?

 

[Triggaaar]

It does mean that they can't get the £60m back that they've written off

It doesn't really. It means that they can't go into administration claiming the club owe them that £60m, and they want the ground sold etc to pay the debt, but if the club became a successful premier league club (which is their ambition) then they'd more than get their £60m back if they later sell the club.

 

[Philzo-93]

View attachment 63764

It's not strictly illegal what they have done. However, if it has been done purely to avoid the FFP fine (which would amount to about £57 million) then it does not reflect well on the QPR owners, Fernandes and Mittal, who are worth over £16 billion in terms of personal wealth.

Using creative accounting and expensive lawyers to deprive good causes doesn't paint either of the owners in a good light. It would be good to get a statement from the FL to put fans' minds to rest and that these two gents have done the right thing.

Wonder if their press and communications department is on their feet today...only one way to find out.

 

[El Presidente]

Surely this is simply a case of QPR trying it on, and the FL saying no, that's not allowed?

You can say that Trig, I couldn't possibly comment!

 

[Pavilionaire]

Going back to QPR, it will be interesting to see what will happen when they are relegated from the Prem. If they're hit with the FFP fine then all of their parachute money for 4 years is gone, and if writing back the loans is thrown out then they'll have no choice but to have a fire-sale of their stars so that they can comply with FFP should they be allowed back.

Will this mean that the "Zamora return to the Albion" pipe dream will surface once more in a couple of months?

 

[tinycowboy]

Someone needs to contact the Financial Reporting Council - this is incorrect accounting. I'm going to put a call in with my contact at PwC's technical department to discuss this treatment and debate how any auditor could sign this treatment off. I'm professionally appalled.

 

[Goldstone1976]

It doesn't really. It means that they can't go into administration claiming the club owe them that £60m, and they want the ground sold etc to pay the debt, but if the club became a successful premier league club (which is their ambition) then they'd more than get their £60m back if they later sell the club.

They can't get that £60m back. They can certainly get a different £60m back (and quite possibly more) if the club is valued at more than it would otherwise would have been and they sell. It's got to be the case that the club is worth more as a PL club than as a Championship one though.

 

[Deleted member 22389]

It's sickening really the amount of money that has just been written off like that. 60 million pounds, no problem. When are clubs going to be rewarded for being run properly and create a level playing field, because football is going up it's own backside at the moment.

 

[Triggaaar]

You can say that Trig, I couldn't possibly comment!

Er, why? I'm only giving my opinion on FFP, you can do the same. As others have posted here, if this was allowed then FFP wouldn't have any meaning.

They can't get that £60m back. They can certainly get a different £60m back (and quite possibly more) if the club is valued at more than it would otherwise would have been and they sell.

My point is that if they sell in the future, and they sell for £60m or more, then they have got their money back - writing off this debt won't have cost them a penny.

 

[KZNSeagull]

Er, why? I'm only giving my opinion on FFP, you can do the same. As others have posted here, if this was allowed then FFP wouldn't have any meaning.

You never watched House of Cards with Ian Richardson? It was from 1990 so maybe you are too young? Any time that a journalist said something to Ian Richardson (the Chief Whip) that he could not publicly agreed with, he came out with the line that El Pres came out with.

Edit: without the name trig, obviously

 

[KZNSeagull]

Shameful bit of accounting/auditing. 57m to charity please QPR!

 

[Triggaaar]

You never watched House of Cards with Ian Richardson? It was from 1990 so maybe you are too young?

You might very well think that Mattie, I couldn't possibly comment.

Watched it just a few months ago, but didn't recognise Pres's wording. Annoyed me that Mattie was stupid enough to go up to the top without company.

 

[KZNSeagull]

You might very well think that Mattie, I couldn't possibly comment.

Watched it just a few months ago, but didn't recognise Pres's wording. Annoyed me that Mattie was stupid enough to go up to the top without company.

Indeed. An excellent program. Have you watched the sequels as well?

 

[Triggaaar]

Indeed. An excellent program. Have you watched the sequels as well?

Nope, just saw the entire first lot in July/August. Are the others as good?

 

[Pavilionaire]

It's somewhat ironic that a thread about QPR's accounts has turned into a thread about House of Cards...

 

[London Irish]

Can anyone else sense Barber's uncontrolable rage building as he reads QPR's accounts?

I actually credit him with being a smart guy who pretty much knew things like this would be likley to happen. The rest is just PR spin designed for fans to justify us not being among the bigger spenders in the league despite the biggest crowds.

 

[seagullsovergrimsby]

Shameful bit of accounting/auditing. 57m to charity please QPR!

Leicester City have done something similar by saying £13M of the £20M loss they made is allowable because of promotion bonus payouts so their accounts for 2013/2014 meet the FFP rules.