Going Under ?

[ViewFromT2]

This 100% for me

[omariqy]

2 minutes ago, richp999 said:

I think he was talking from the perspective of the club going into administration. In that case, the club/company the player has contract with is essentially bankrupt and no longer exists - thus your contract no longer exists.

Admittedly this would mean the 'old' AVFC would have to sell all of its assets to pay as many bills as possible before being sold to the 'new' AVFC for a £1.  Players like Richards would then be at the bottom of a list of creditors and likely get nothing.

Jordan has had a cub relegated and has dealt with all of these problems. A savvy businessman should be going to players like Richards and saying

'The club is likely to go into administration , in which case you get nothing for the last 12 months of your contract. If you accept £500,000 now instead of the £1.5M you would have been paid then we can avoid administration ; and £500,00 is better then £0 right?'

 

 

Quote

The effect is that, in the event of a club’s insolvency, when assets are insufficient to pay all creditors in full, highly paid players and large transfer fees must be paid in full from available assets but a lowly cleaner or local contractor can remain unpaid.

The biggest loser from this rule is often HMRC. Since 2003 they have had no preferential status on company insolvency and are treated as an ordinary unsecured creditor. The Football Creditor Rule means that they, alongside other unsecured creditors, can remain unpaid while football creditors are paid in full.

https://www.lawinsport.com/topics/features/item/football-creditors-rule-is-the-football-league-s-new-insolvency-policy-a-step-in-the-right-direction

[Zatman]

38 minutes ago, VERB27 said:

I don't understand this assertion that we will definitely have to sell assets. To me, the wage bill is the prominent issue.

I think it's probably true that the reason we're in this mess is because we were reliant on a monthly Xia top-up of £Xm per month and since this stopped we has sudden cash flow issues. This would be expected given the going concern basis in the May accounts was only confirmed by PwC with reference to a letter of support from Recon.

But if Xia is still happy to put in this monthly top up - and can - then we will be fine. Maybe I'm naïve in thinking this is possible?

But a lot of players on the wage bill have no sale value

[richp999]

2 minutes ago, omariqy said:

https://www.lawinsport.com/topics/features/item/football-creditors-rule-is-the-football-league-s-new-insolvency-policy-a-step-in-the-right-direction

Could be a problem then.. But I don't think we are looking at administration anyway... hopefully..

But there are ways around this also.. What if 'old' AVFC had already sold their ground, training ground and other assets to another company before they entered administration....and the 'pot' left couldn't afford to pay out the contracts ?

Its more about using the threat to try and wiggle out of these long expensive contracts that provide us no benefit, and are dragging us down. Of course we will most likely end up stuck paying them.

 

[Eastie]

3 minutes ago, Zatman said:

But a lot of players on the wage bill have no sale value

And they are on such wages that nobody else will be interested in the likes of Elmo, jedi, whelan, Lansbury , Ross etc 

[HeyAnty]

33 minutes ago, ViewFromT2 said:

I like Simon Jordan. The stick some fans gave him last week when he intimated all was not well at Villa was poor.

However, if we are indeed losing £5m per month then surely the problems run far deeper than players wages?  If we clear all our top earners we might save what, £1m per month?...probably not even that?

Guessing at figures a bit, feel free to change....but:

Terry £60k per week £240k per month

Gabby £30k per week £120k per month

Hutton £25k per week £100k per month

Richards £25k per week £100k per month

McCormack £30k per week £120k per month

Jedinak £30k per week £120k per month

Whelan £25k per week £100k per month

Grealish £25k per week £100k per month

 

That's £1m saving per month......so now were only losing £4m per month....phew!

Think you are underestimating the wages a fair bit.  Gabby and Hutton on double that, Richards on 60 or 70k.  

With our loaned players gone and Terry, Hutton and Gabby off the pay role we are probably talking close to 2 mill off the Monthly wages bill.  Also don't forget the loan fees we would have to pay, could be closer to 3mill.

[Rodders]

pretty sure gabby had 60k in the premier league so I am assuming there was a relegation cut clause, same as for hutton and I hope Richards.

[Straggler]

I am really struggling to reconcile these numbers. A £60 million / year shortfall in the accounts should have shown up the last time they were filed.  If not the people responsible for filing them should be in a great deal of trouble. Last accounts had us with a revenue in excess of £70 million so the current theory is that we have outgoings of around £130 million / year to be in this sort of trouble.  I'm not saying it's impossible to spend this money on a football club, but when I look at the team on the pitch I find it very hard to understand where all that money has gone.

[Jareth]

Wages are a contentious issue, those published yesterday appear to have come from a reputable source but who knows if they fudged them up for maximum effect - what they did achieve was to have their info published and for fans to take it as gospel. Much like this £5 million a month black hole figure that puts us losing £60 mill a year - we know that is untrue (see accounts) but it has stuck and is being repeated as fact. Shenanigans all over the shop at the moment.

[richp999]

34 minutes ago, ViewFromT2 said:

Think I read last night that the chinese govt are only interested when companies are spending in excess of $300m US.

I'm not convinced his money is out of reach at all, far more likely that he has run out of money. 

That's great news.. So if we can find a way of getting around FFP, we can expect at least another $290m a year.. Sorted !!!

Now how much did that Gareth Bale want ?

Edited June 7, 2018 by richp999

[Straggler]

6 minutes ago, Jareth said:

Wages are a contentious issue, those published yesterday appear to have come from a reputable source but who knows if they fudged them up for maximum effect - what they did achieve was to have their info published and for fans to take it as gospel. Much like this £5 million a month black hole figure that puts us losing £60 mill a year - we know that is untrue (see accounts) but it has stuck and is being repeated as fact. Shenanigans all over the shop at the moment.

I have not really looked at the accounts, but the googling I did this morning suggested that the last set were misleading as they did not include player wages.  That sounds again like something that would be very hard to leave out of a set of accounts, but I'm struggling to get to the truth of the matter in this one.

[Jareth]

1 minute ago, Straggler said:

I have not really looked at the accounts, but the googling I did this morning suggested that the last set were misleading as they did not include player wages.  That sounds again like something that would be very hard to leave out of a set of accounts, but I'm struggling to get to the truth of the matter in this one.

It's a post truth world, gotta go with ya gut!

[richp999]

5 minutes ago, Straggler said:

I am really struggling to reconcile these numbers. A £60 million / year shortfall in the accounts should have shown up the last time they were filed.  If not the people responsible for filing them should be in a great deal of trouble. Last accounts had us with a revenue in excess of £70 million so the current theory is that we have outgoings of around £130 million / year to be in this sort of trouble.  I'm not saying it's impossible to spend this money on a football club, but when I look at the team on the pitch I find it very hard to understand where all that money has gone.

Yes lots of it doesn't add up , so most likely the figures banded around are wrong.

The big issue this year is losing the parachute payments , and being squeezed at the other end by FFP.  It means we have an income tens of millions less, and can lose tens of millions less also.

But you are right, even if we had a squad of 25 players all on 50,000 a week (which we don't, on average) then the wage bill would be around £65 million a year. With an income of £70 million that should leave us with around £5m to run the club. The last time I looked a the club accounts we did seem to spend an astronomical amount on just the running of the club, but even that shouldn't warrant another £60m black hole.

 

[HeyAnty]

Think this is the report on 300mill

https://www.birminghammail.co.uk/sport/football/football-news/tony-xia-aston-villa-chinese-14749006

An expert on Chinese investment in football says the landscape has changed - and Far Eastern money has slowed.

This comes amid reports of cash flow problems at Aston Villa, linked to owner Tony Xia's ability to pump money into the club, have surfaced.

However, expert Simon Chadwick believes Dr Xia CAN get cash across - because he is not that big a spender.

He believes the Villa chairman is likely conflicted - one one hand, he is a proud Chinese businessman desperate to save face, on the other, he is spending close to £5 million a month to keep Villa going.

Prof Chadwick, professor of Sports Enterprise at Salford University, and is an expert in Chinese investment in football and says the likes of Athletico Madrid, Inter Milan and Slavia Prague have seen income dry up after Far Eastern authorities warned investors to stop taking so much money out of the country.

On a positive note, he does not believe Aston Villa's finances are so bad the club is headed for administration.

He explained: "Last July, the Chinese authorities felt they were suffering from lots of people moving money off shore so they Government clamped down on it .

"As a consequence, money flowing away from China has slowed down.

"And other football owners have felt this, like Wang Jianlin, who sold part of his 20 per cent ownership stake in Spanish team Atletico Madrid.

"He was forced to do that. And Tony Xia may well be in the same position.

"However, Tony Xia isn't a particularly high-profile Chinese investor, and comparatively he hasn't spent a lot of money.

"The regulations came in in July and kick in at around $300 million, so it seems it wouldn't effect him at the moment.

"I don't think Tony Xia has spent that, so to some extent that may be being used as an excuse.

"There is also the issue of saving face in Chinese society. That is huge for Chinese people.

"For Tony Xia to exit Aston Villa would be losing face for him at home. He would not want to leave without making a profit."

[Nigel]

1 minute ago, richp999 said:

Yes lots of it doesn't add up , so most likely the figures banded around are wrong.

The big issue this year is losing the parachute payments , and being squeezed at the other end by FFP.  It means we have an income tens of millions less, and can lose tens of millions less also.

But you are right, even if we had a squad of 25 players all on 50,000 a week (which we don't, on average) then the wage bill would be around £65 million a year. With an income of £70 million that should leave us with around £5m to run the club. The last time I looked a the club accounts we did seem to spend an astronomical amount on just the running of the club, but even that shouldn't warrant another £60m black hole.

 

Wages are paid to more than players

[Straggler]

1 minute ago, Jareth said:

It's a post truth world, gotta go with ya gut!

My gut is telling me to eat flaming hot Doritos for breakfast and to have a big block of dairy milk for desert.  I'm not sure I can trust it either.

[richp999]

2 minutes ago, Nigel said:

Wages are paid to more than players

Yes but that would come into the 'running of the club'.  We surely can't be spending £60Million on administration? Are the secretaries on £20,000 a week contracts ?

Edited June 7, 2018 by richp999

[A'Villan]

1 hour ago, Eastie said:

I think any hope of promotion pushes is pie in the sky mate personally .

you say only lose Grealish and kodjia but don’t forget we’ve already lost terry , Hutton , snoddy, Johnstone ,onamah, grabban , axel . 

‘That’s more than half the first  team - and I’d be amazed if Chester wasn’t sold too .

as for o hare - he has a very bad knee ligament injury and will be out 3 months at best . 

Yeah, would have to agree, now you've reminded me about who's remaining.

I think the shock of all this has me absent minded and perhaps a bit delusional on the promotion push front.

We still have some of the best players in the division, if they can rekindle some form, even after the exodus of players mentioned.

Shame about O'Hare, thought he was really bright and want to see more of him.

Wolves were 15th before winning it and Cardiff 12th before finishing 2nd. Goes to show that a well drilled outfit can achieve in the championship.

I know our situation is at the other end of the spectrum with everything going on, but if we end up keeping the likes of Hourihane, Lansbury, Bree, Adomah, Hogan and McCormack we really should be looking at competing.

Edited June 7, 2018 by A'Villan

[sne]

 

[John]

38 minutes ago, Zatman said:

If we cant pay, can we not get them repossesssed and sent back to Fulham and Brentford

Surely Fulham could do the decent thing and write of the £6m the above says we still owe them for the Fencegate forward that we signed from them given their win at Wembley has had such a big impact on our current mess.