Football finance expert Kieran Maguire believes Bristol City may have resigned themselves to a points deduction for next season as the Robins continue to be in discussions with the EFL over Profit & Sustainability obligations.
City posted record losses of £38.4million in December for the 2020/21 season and under the league’s P&S submissions - whereby club losses cannot exceed £39m over a three-year rolling period - it puts them right on the border for sanctions.
The 2018/19 season, in which the sales of Lloyd Kelly and Adam Webster helped City post profits of £10.9m, has kept them under the limit but next season’s submission for the 2021/22 accounts, won’t have that figure as part of the calculation.
City CEO Richard Gould has already addressed the prospect of potential punishment further down the road. Speaking to Bristol Live in January, Gould said: “We just want to be treated fairly and we have to get the argument out on the table.
“Would we prefer to sell all our players or take a penalty hit, if they decide to prosecute? Well, that is a decision that we’ll have to look at and a judgement we take in the summer when we get more feedback from the EFL.”
Points deductions imposed by the EFL in recent years have varied from six for Reading last season, nine to Birmingham City in 2018/19 to 21 for Derby County, albeit with the latter due to the Rams entering administration, a situation that isn’t relevant to the Robins.
“Bristol City, I thought it was very interesting their chief executive said they might have to budget for a points deduction next season and, if so, so be it. I thought they were fascinating comments,” Maguire told the Benjamin Bloom Football Channel in a discussion about teams who could incur penalties next season.
“They historically have benefitted from the sale of Adam Webster, which has been within the three-year window and will be dropping out for 2021/22. They made a fair amount of profit on that deal.
“They did seem to be resigning themselves to a potential issue. And if it’s only a 3-4 points deduction I don’t think it’s going to have a negative impact on a side that’s going for a play-off place because it’s one match, or one and a half matches."
The picture is a complex one for a number of reasons. Firstly, because over the last two summer windows, City have reduced their wage bill which had risen to an unsustainable £35.3m per year for 2020/21. Eleven first-team players, including higher-earners Famara Diedhiou and Jamie Paterson, were released last summer, with Nathan Baker and Andi Weimann then negotiating reduced terms, while this window has already seen Callum O’Dowda moved on.
The Republic of Ireland international is expected to be followed by Kasey Palmer, as he finalises his switch to Coventry City, while Nahki Wells and potentially also Tomas Kalas could follow before the end of August.
That would achieve the sense of “wage equality” that manager Nigel Pearson has spoken about as a target for the club to try and achieve, as most of those earning in excess of £20,000-a-week would have been taken off the books.
Taking club salaries move towards the £20m mark, and possibly even below, would drastically help City meet P&S obligations when they make their submission at the start of next year.
So too would the prospect of potentially selling Han-Noah Massengo, Antoine Semenyo or Alex Scott, plus the prospect of sell-on value for Webster, Kelly or Josh Brownhill, should any be sold by their respective clubs this summer.
But, as Gould indicated earlier this year, they won't be forced into selling off a prized asset just if it meant reaching the FFP threshold and, theoretically, could accept a small points deduction instead, if it meant keeping Scott or Semenyo; Massengo being a different case because of his expiring contract.
The EFL are also yet to confirm if transfer “add-backs” will be permitted in submissions with City’s argument being that Covid-19 and playing a season behind closed doors led to the collapse of the transfer market outside of the Premier League, therefore their business model of leaning towards transfer revenue was adversely affected from 2020 onwards. The league has already allowed such add-backs for lost ticket revenue of £5m and £2.5m but transfer income is a more subjective figure to calculate.
Having hired independent auditors to asses the impact, the Robins estimate they lost around £30m in potential revenues, a figure that, again, would allow them to meet P&S and avoid a points deduction.
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