What is the Truth, what now and what next?

​Yesterday’s announcement that the Club had been charged with a breach of EFL Regulations in relation to the expected business plan was certainly sudden. Having been led to believe that in 2018/19 we were operating to an EFL imposed business plan which should have protected us from additional sanctions, we now find that the truth is we appear to have been in breach of that plan.

Although the EFL are yet to comment it seems unlikely to be coincidence that this declaration coincides with another extremely concerning set of accounts, finally released yesterday.

However, what cannot be speculated is that, once again, the supporters have been misled, and once again treated with contempt by the Club.

It transpires that not only were the accounts alarming, they also concealed an important detail: that the Club have transferred ownership of the ground to another subsidiary.

This paper exercise – for which Derby and Sheffield Wednesday are currently under EFL investigation – moved £22.7m into the accounts, resulting in a small book profit. This enabled the Club to post a loss of only just over £8m in the accounts, below the £13m allowed by EFL Profit & Sustainability rules.

Furthermore, it appears that the English Football League have been aware of this concern investigating it for over six months, a process that in any other institution would be externally validated and publically visible.

As was recently reiterated by our colleague Daniel Ivery, on 7th November at the Fans Forum meeting the Trust put three questions to the board regarding the Club’s performance against the FFP targets for 2018-19. These were regarding the Birmingham Sports Holdings published accounts showing losses of £30m against the football club; regarding the sale of Adams and Jota against current 2019/20 losses; and how they planned to ensure compliance from the 2020/21 season onward should promotion and hence financial security not materialise.

Their answer was typically vague, but contained the following reassurance, the integrity of which is now in serious question:

“As a Club we cannot go into specifics, but we are mindful of EFL regulations and we continue to operate in a manner which reflects this but at the same time also helps to fire our ambitions.”

Today, Blues Trust wish to put three further questions to the Board, which require immediate and certain resolution:

  1. Has the internal transfer of the ground – in order to create a paper profit to avoid infringing FFP rules for 2018-19 – been approved by the EFL?
  2. f no, is that what they are investigating?
  3. If yes, in what way are the Club being accused of infringing the EFL imposed Business Plan for that year?

We will submit these in writing via official channels and keep supporters abreast of developments.

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13 Comments

  1. Des

    Good luck with your efforts!

    • Bill

      It would be good to know where the owners go from here. No matter what the EFL rules can they afford to keep on ploughing money in with no repayments being made ? Also if they can’t what’s the plan ?

  2. Richard Lee

    Are we under a transfer embargo? If not why no new forward yet

    • Chris King

      Why no forward, have you seen the accounts!

  3. Nigel Smith

    Richard Wilford on radio WM explained how the EFL’s perceived breach of regulations had come about. Worth a listen! A more immediate concern is the fact that parking on the Birmingham Wheels site will end on 31st Jan. This will affect many supporters. Would be grateful if this is an issue that the Trust could ask about at the next fans forum. Many thanks.

  4. Richard Williams

    What was all the bull about the club actively lining up transfer business early prior to the transfer window opening. This is never going to happen is it

  5. Linda Magner

    Thank you for investigating this

  6. Michael

    We need some Saudi Crude Oil Money because the Chinese Cooking Oil Money has dropped us right in the Sheizen ! They desperately want promotion which will clearly solve all financial issues we have. But they know nothing of football, they want to play tiki taka style football in a league where that’s just not possible, the money we have spent is ridiculous ! Yet we are not progressing ! That’s because you need to build a team to compete for promotion in the Championship then build another team to play in the Prem ! Unfortunately the championship is like no other league on the planet ! It’s fast, Strong, relentless, teams attack, Defend, counter attack, then you got the big teams that bully. every single game is a lottery ! I don’t rate Juke I know that’s unpopular opinion, but if you are going to play Juke you need our best crosser of the ball on the pitch ! Montero is that player ? The management of the side has been dreadful, team selections and substitutions have been mind boggling at best ! A passing side needs pace up front, Mrabti is outstanding at linking up with the midfield ! But if he is playing with juke he has no outlet because juke is too slow to get in behind ! If we lump it to juke 9/10 the ref gives them a free kick ! When he does win it it rarely breaks our way ! I’m going off tangent here sorry !

  7. Gazal

    I’m more concerned about the Birmingham Wheels parking issue. All other problems are with those who have paid for the right to run the club. Do supporters really think all this moaning has a positive effect on the players and staff?

  8. John

    Not sure I understand all of this?

    1) Where has it been stated that Blues have been ‘charged’ with a breach of EFL Regulations? I have seen all sorts of rumours about Blues & possible breaching FFP rules again, but all these are not official.

    2) What I did think was official was that the EFL notified Blues in May 2019 that it was investigating whether it had complied with the proposed (agreed?) business plan. This ‘news’ was openly available last summer, but seems to have hit the headlines following a recent newspaper ‘exclusive’ announcing this already widely known about facts.

    3) It has also been openly known that BSHL separated off St. Andrews by selling to a newly formed company (but still owned by BSHL/TTA). The reasons given at the time were that BSHL needed to demonstrate income other than from the football club & to raise cash for BCFC. This procedure is the same that has been carried out by numerous other clubs, including Aston Villa. BSHL’s new subsidiary is now producing an income from letting to Coventry City FC. This type of transaction of, in effect, selling the football ground to itself, has been frowned upon by the football authorities who are looking closely into whether they are appropriate or just utilised to avoid falling foul of FFP – I think we all know the answer to that one……

    My biggest concern, that doesn’t seem to have been raised:

    4) re 3) above would appear to be the fact that BCFC and St Andrews no longer appear to be a single unit. Perhaps I am wrong and confused here, but it seems to me that BSHL/TTA, by separating off St. Andrews have made it possible to sell BCFC without having to sell the ground to the same buyer. In fact couldn’t BSHL/TTA keep hold of St. Andrews, adding its value to its own assets once BCFC has been sold. Further down the road it could either vastly increase the rent to BCFC or, even worse, give BCFC notice to quit so that BSHL/TTA can then redevelop St Andrews.

    If I am wrong, which I sincerely hope I am, then I would appreciate if someone could put my mind to rest. Otherwise, if I am correct, isn’t this aspect the biggest concern of all?

    There is much more I could bring up regarding rumours, facts, misrepresentations and just downright lies, but there is not the space or time to properly lay out all the discussion details required.

    In the meantime, we just need to focus on getting behind the team, despite whoever is picking the team and who is playing, to ensure we have enough points to avoid relegation, whether or not, we are given another points deduction (which we won’t get deducted in my opinion).

    KRO

    • Cliff

      Thanks for taking the time to get into the detail

      The statement from BCFC uses the words ‘charged with breach of EFL regulations’, it is with regard to alleged non compliance with the imposed business plan. I do not think this charge was known openly until the accounts were published – we did not know about it at the Trust and the club did not mention it when questioned about compliance at the fans forum.

      The sale of St Andrews was rumoured in May last year, the club were asked about it at a Fans forum and gave a vague answer saying it was commercially sensitive. The note in the accounts just published is the first time the club has admitted the sale openly.

      I agree wholeheartedly with you that the biggest concern is that the ground is held separately to BCFC which brings the potential major issues you raise. That is why I am disappointed this is something the Board avoided sharing with the fans, and another reason to believe the board are making decisions that are detrimental to the long term future of our club.

      Cliff , Chair Blues trust

  9. TED

    This whole mess lies at the feet of Sullivan and Brady who started this downward spiral when they sold the club to Carson Yeung after stating that even though they were selling the club they would not sell it to anyone who wasn’t right and proper and who could carry on taking the club forward,yeh right,when Yeung took over not knowing who he was I googled his name and he was described in one article as Hong Kongs version of Del Boy,the rest is history,i hope that anything that can go wrong at a football club goes wrong at West Ham so Sullivan and Brady get their just desserts.

  10. Eric Jones

    I want to thank the Trust for trying to get the owners to communicate with fans about these vital issues. It is clear that the Chinese are not effective communicators or are hiding information or both. Thank you and KRO…

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