Bristol City CEO Richard Gould has eased any concerns the club will incur a points deduction following the uncertainty over their Financial Fair Play situation.
Around 10 months ago, the Robins posted losses of £38.4million as Covid prevented fans from entering stadiums while the complete collapse of the transfer window meant the club couldn't continue their policy of player trading.
Gould admitted that while "significant losses" are still expected this time around, the club are around £10m better off than the previous year. City are currently processing their accounts which will be sent to Companies House with the deadline at the end of February.
The club have been working tirelessly to reduce the wage bill and become more sustainable to fall in line with EFL's Profit & Sustainability regulations. The club's wage bill for 2020/21 topped £35.3m and therefore it was imperative that was reduced with high earners such as Famara Diedhiou and Jamie Paterson leaving the club.
According to EFL rules, clubs aren't allowed to exceed losses of £39m over a rolling period of three years. However, last season's figures included the £11m profit made from the 2018/19 season following the sales of Lloyd Kelly and Adam Webster - figures that now can't be used as part of the calculation.
The EFL adapted their rules last year so the two Covid-impacted seasons are now taken as an average. There are also Covid add-backs in which City can include the estimated lost revenue for ticket prices and, more importantly, estimated losses due to the collapse of the transfer market.
Speaking at the fans forum on Thursday night, Gould said: "We will still be posting a substantial loss for the end of last season.
"We remain eternally grateful for the level of support from the Lansdown family. The numbers are better than the previous year and are about £10m better than the previous year.
"The £10m improvement will be the fact the supporters are back in which is an important part. Working hard to reduce the player cost base and Nigel has had to deal with that. It’s not an easy thing when we’re trying to reduce the player cost base at the level they have.
"FFP has been an issue for all the clubs, particularly at the COVID losses. We were well within limits for the end of last season. For this season we’re not forecasting any problems either so positive report on that one.
"It's a very complicated calculation that's beyond me but there were a lot of Covid add-backs that the Football League allowed to be taken into consideration and the most important one being the collapse of the transfer market because you'd be aware transfers and sales have been very important to the club.
"That's an add-back that's been allowed by the EFL and the good news is we aren’t anticipating any problems this season.
"We don’t believe we’ve got a points deduction hanging over us. The uncertainty has been caused by the Football League have rightfully introduced the COVID add-backs. They’ve been trawling through the numbers and waiting for the validation. We are very confident there will not be a points deduction this year."
Uefa and the Premier League have been in discussions over a redistribution method regarding finances into the Football League.
Uefa's new spending rules would limit the club spending on wages, transfers and agents' fees to 70 per cent of their revenue from 2025 with the plans being phased in from 2023. It means clubs will be able to spend 90% of their income, reducing to 80% in 2024 and 70% in 2023.
Plans also being put forward by Uefa also claim clubs can permit losses over a three-year period from £24.98m to £49.96m provided they are covered by cash injections. In June, owner Steve Lansdown provided a fresh £15.3m injection to the club by writing off debt and converting them to shares.
In regards to parachute payments, they could be drastically cut after Premier League clubs came to an agreement for a new way to filter cash into the Championship.
As it stands, relegated teams receive three payments that are divided as an equal share of broadcast revenue paid to Premier League clubs to help mitigate the huge drop in revenue that fails to cover the wage bills accumulated.
According to the Times, funding to clubs in the Championship will be allocated depending on where each side finishes in the league table as a sliding system. It is similar to how money is currently distributed in the Premier League.
The plan, called "A New Deal For Football", also cuts back on parachute payments which will "greatly reduce" the £44million handed to clubs who are relegated from the Premier League in their first season. The initiative is to help prevent clubs spending beyond their means and creates a fairer playing field across the league.
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