The AVFC FFP thread

[Peter Griffin]

5 minutes ago, CVByrne said:

 

West Ham have a ridiculously favourable deal on their stadium rental so we'll get a better one. 

They pay 2.5m a year which is very low.. But they can't use the stadium for other purposes and they do not own the naming rights to it. Theoretically, the new Chelsea owner could buy the naming rights and call it the Chelsea FC Supporters stadium  

[Peter Griffin]

4 minutes ago, Sam-AVFC said:

Over here tenant's improvements can't be included in rent reviews for 21 years. Kind of irrelevant in this situation though as the landlord and tenant are connected parties and I doubt NSWE will be looking to gouge us on the rent, if there even are rent review provisions. It wouldn't be unusual for the rent of similar assets on the open market to be directly linked to turn over.

I believe from an FFP perspective the rental income is based upon the a market rate rental yield. So the stadium was worth 56m and if the market rate is 5% yield the rent will be 2.3m a year

[Rightdm00]

4 hours ago, Peter Griffin said:

But the product of the business is sport. The better the sport and more successful the sport the more money the business makes. Each place u finish higher up the PL table u get an extra 3m quid or so. The further u get in cups the more money u get, the more gate receipts and the more TV money. The more successful the higher the value of sponsorship deals and the more commercial revenue u make.

All that is just a couple drops in the pool compared to the TV and corporate sponsor money. Sporting rewards matter little. Presently you can pretty much guarantee a certain league finished based off of how much you spend on your wage bill. It's the real issue that the PL has failed to address. Right now the competition, the sporting side, matters little in the overall success of your investment. 

Look at Chelsea, Roman had to write off over £1.5 billion in debt to make Chelsea an attractive asset.  Champions League and multiple PL titles and Chelsea still couldn't turn a profit.  At best he broke even in the end. Football as a business is pretty crappy one. Ashley turned a profit but that's only by running Newcastle on a bare bones budget. Unless the PL figures out a way to answer this question, how to field a competitive product while also ensuring reasonable profits for the owners, then the ESL is going to return. If the ESL can guarantee greater revenue then why would the Top 6 clubs, as a business decision, say no. 

[Peter Griffin]

8 hours ago, Rightdm00 said:

All that is just a couple drops in the pool compared to the TV and corporate sponsor money. Sporting rewards matter little. Presently you can pretty much guarantee a certain league finished based off of how much you spend on your wage bill. It's the real issue that the PL has failed to address. Right now the competition, the sporting side, matters little in the overall success of your investment. 

Look at Chelsea, Roman had to write off over £1.5 billion in debt to make Chelsea an attractive asset.  Champions League and multiple PL titles and Chelsea still couldn't turn a profit.  At best he broke even in the end. Football as a business is pretty crappy one. Ashley turned a profit but that's only by running Newcastle on a bare bones budget. Unless the PL figures out a way to answer this question, how to field a competitive product while also ensuring reasonable profits for the owners, then the ESL is going to return. If the ESL can guarantee greater revenue then why would the Top 6 clubs, as a business decision, say no. 

Abramovic bought Chelsea for 140m and sold it for 4.25Billion, that is quite a healthy. Yes he wrote of debt but there were external factors related to the sale. The fact that he was receiving none of the sale proceeds and was not allowed to received the 1.5Bbn back would have helped to write off the debt. Man Utd is the same, it is worth multiples of what was paid for it, again massive profit for the businesses. A lot of investors at that level do not want an annuity, they just want the value of the capital asset to increase, I expect this is what NSWE are doing. But, if they did want an annuity they can still realise one as demonstrated at Man Utd. Football is a very difficult business and the risks are high but if the club is well managed then the rewards are equally high.

[CVByrne]

14 hours ago, Peter Griffin said:

But the product of the business is sport. The better the sport and more successful the sport the more money the business makes. Each place u finish higher up the PL table u get an extra 3m quid or so. The further u get in cups the more money u get, the more gate receipts and the more TV money. The more successful the higher the value of sponsorship deals and the more commercial revenue u make.

Most of the higher place money is paid out in bonus to players. This way players can be attracted by potential higher salaries via taking 70-80% share of the prize money. 

Clubs are insulated from a teams under performance 

[Peter Griffin]

11 minutes ago, CVByrne said:

Most of the higher place money is paid out in bonus to players. This way players can be attracted by potential higher salaries via taking 70-80% share of the prize money. 

Clubs are insulated from a teams under performance 

Bonuses are insulated by money received for the sporting success that warrants the bonus payments but bonus payments are the smaller portion of the player's wage. Bonus payments at Man City, when they have a successful season are circa 10m/15 for the full squad. That is only about 3 weeks wages for many of them. That is not too much insulation. 

[danceoftheshamen]

On 25/08/2022 at 18:04, Peter Griffin said:

There is no way that is true. Infrastructure can't be included in P&L, there will be caveats otherwise clubs would not be able to build new stadium. I smell some clickbait reporting with this

Lets hope you're right Peter.

[sparrow1988]

For the accounting heads/FFP experts, was there (in your opinion) more money to spend or has our spending since promotion curbed our spending in this window? We've been among the biggest spenders since we came back up and this coupled with our inability to move on squad players for significant fees has got me wondering if this had an effect on our spending.

Or are we just not spending any more until Gerrard is gone?

[MaVilla]

18 minutes ago, sparrow1988 said:

For the accounting heads/FFP experts, was there (in your opinion) more money to spend or has our spending since promotion curbed our spending in this window? We've been among the biggest spenders since we came back up and this coupled with our inability to move on squad players for significant fees has got me wondering if this had an effect on our spending.

Or are we just not spending any more until Gerrard is gone?

we have curbed our spending for the last 4 windows really?

[ender4]

27 minutes ago, sparrow1988 said:

For the accounting heads/FFP experts, was there (in your opinion) more money to spend or has our spending since promotion curbed our spending in this window? We've been among the biggest spenders since we came back up and this coupled with our inability to move on squad players for significant fees has got me wondering if this had an effect on our spending.

Or are we just not spending any more until Gerrard is gone?

Even with our higher wages and players who don't play and that we can't shift, it seems that we should have space within FFP to spend.   Sarr at £25-30m plus high wages indicate this as well. 

Therefore either we struggled to get who we wanted and so Dendoncker and Bednerak were the best we could do.... or the owners/Purslow pulled the plug on spending on players Gerrard wanted. Which leads to that they believe he is very very close to being sacked, they are giving him a couple more games to redeem himself but they know that there is a high chance they'll be sacking him at some point this month.

[DCJonah]

If FFP is an issue then the signings of the likes of Ings, Digne, Coutinho and Carlos are pretty big gambles which are looking like disasters. 

Carlos fair enough was unlucky. 

But it seems we've gone for win now mode and sit 19th in the league. 

 

[sparrow1988]

35 minutes ago, MaVilla said:

we have curbed our spending for the last 4 windows really?

Read the post again

Particularly this bit;

54 minutes ago, sparrow1988 said:

has our spending since promotion curbed our spending in this window?

Edited September 2, 2022 by sparrow1988

[MaVilla]

7 minutes ago, sparrow1988 said:

Read the post again

Particularly this bit;

oh oops.

weading engrish is hard it seems.

[tomsky_11]

3 hours ago, sparrow1988 said:

For the accounting heads/FFP experts, was there (in your opinion) more money to spend or has our spending since promotion curbed our spending in this window? We've been among the biggest spenders since we came back up and this coupled with our inability to move on squad players for significant fees has got me wondering if this had an effect on our spending.

IMO yes and no. Short term, ie. for 2023 season financial checks I think we have plenty of coverage, and could have easily spent a fair chunk and still passed the rules. Anything further we did though would be setting us up for some issues come the 2024 check without significant sales or a dramatic increase in day to day revenue. The biggest issue is a wage bill that I expect is getting close to, if not exceeding, our non-transfer income. I've been relatively cautious with our possible revenue estimate and possibly overegged our wage bill to give more conservative view so possible we aren't in as bad a position for 2024, but I think still likely to require some reasonable sales at that point. 2025 is going to be the major tipping point, when the Grealish money falls outside the testing period. Though I suspect the clubs plan in that time period will be get Europe, and if not a combination of selling or utilising youth for more consistent sales profit and/or lower wage impact.

[allani]

2 hours ago, ender4 said:

7th or 8th, depending on whether Everton's has decreased fast enough.

Is this official? 

Because I've been looking around and TotalSportal have us as 14th highest as of February last year with an annual player salary of £55.7m which includes our Jan signings.  But they have Digne at £96k per week.  Meanwhile Spotrac have us 7th at £81.4 m at the end of the summer but with Digne on £163k per year (as an example).

By contrast they have Everton at 7th (£114m per year) and 11th (£46m per year) respectively. 

It seems like the variations between clubs (including us) seem to be so wildly different that most sites appear to just be making it up. 

[ender4]

9 minutes ago, allani said:

Is this official? 

Because I've been looking around and TotalSportal have us as 14th highest as of February last year with an annual player salary of £55.7m which includes our Jan signings.  But they have Digne at £96k per week.  Meanwhile Spotrac have us 7th at £81.4 m at the end of the summer but with Digne on £163k per year (as an example).

By contrast they have Everton at 7th (£114m per year) and 11th (£46m per year) respectively. 

It seems like the variations between clubs (including us) seem to be so wildly different that most sites appear to just be making it up. 

We can't really get official until 18-24 months after the period we want to know about when the accounts for the previous year come out. 

But it is calculable for every club. The easiest way to do this is to take the last set of published accounts and then add or subtract rough salaries for every player than has joined or left.

Doing this puts Villa 7th.

TotalSportal is way out because that is for the year 2020/21, 2 years ago, when we had mainly the players we signed over the summer we got promoted.

Spotrac has us 7th for summer 2022 so is much more up to date.

[allani]

3 minutes ago, DCJonah said:

That's one aspect. There's plenty more.

I keep repeating myself, but had Dean and Jack not kept us up, he'd have deserved a hell of a lot of scrutiny for the squad we put together.

And the one manager he got wrong has had a big impact in the grand scheme of our plans. 

I don't necessarily want him sacked. But I wouldn't be bothered one bit if he was.

 

But the problem is that we had so many players out of contract that under FFP we had no choice but to gamble on a cheap squad.  I think we did an OK job - certainly better than previous approaches of buying old, experienced hackers who'd been in plenty of relegation battles before.  The fact that we have had to buy pretty much 2.5 squads is down to the protectionist racket that is FFP.

[DCJonah]

15 minutes ago, allani said:

But the problem is that we had so many players out of contract that under FFP we had no choice but to gamble on a cheap squad.  I think we did an OK job - certainly better than previous approaches of buying old, experienced hackers who'd been in plenty of relegation battles before.  The fact that we have had to buy pretty much 2.5 squads is down to the protectionist racket that is FFP.

I agree to some extent. 

But then to go into a season with Wesley and Davis as your premier league strikers is mind blowing. 

[allani]

1 minute ago, ender4 said:

We can't really get official until 18-24 months after the period we want to know about when the accounts for the previous year come out. 

But it is calculable for every club. The easiest way to do this is to take the last set of published accounts and then add or subtract rough salaries for every player than has joined or left.

Doing this puts Villa 7th.

TotalSportal is way out because that is for the year 2020/21, 2 years ago, when we had mainly the players we signed over the summer we got promoted.

Spotrac has us 7th for summer 2022 so is much more up to date.

TotalSportal have Digne, Coutinho in the figures so the only major player additions are Boubs and Carlos (unless they have counted Couts as a loan fee and he's now a salary?).  But the differences between their estimates / calculations are ridiculous.  There is no way that Everton's wage bill has reduced by 60% since January.  For each club the variations in salary that I have seen between Jan and Aug vary by more than 20-30% depending on which site you look at (sometimes 50% and higher).

I am sure we are in the top 50% now and a lot of the players at the top of the salary list were brought in under Gerrard.  So I am not disputing the argument being put forward at all - just intrigued about the likely accuracy of the data. 

Of course some of the salaries need to be offset against the fact that some of those players didn't cost us a transfer fee - so for example we probably saved £25 million in transfers signing Boubs so if we pay him £15 million more in salary than a similar level team-mate over the course of their contracts we are still £10 million up.  (Although at the same time it does risk that teammate then demanding salary parity when their contract next comes up - so it is a fine balancing act.)  However, there are definitely a few players whose "rumoured" salaries are well out of proportion to the quality of their performances.

But what the salary list shows me more than anything is just how corrupt FFP really is - when "financial fair play" allows the top 4 to spend more than double the wages of well-established PL clubs and multiple times that of some clubs in the league.  I understand the need to ensure that clubs don't go bankrupt if they get relegated but at the same time it is killing the ability for clubs to compete on anything like an even playing field.

[allani]

5 minutes ago, DCJonah said:

I agree to some extent. 

But then to go into a season with Wesley and Davis as your premier league strikers is mind blowing. 

Yeah we've left ourselves exposed in key areas for a while - and unfortunately those risks seem to have a habit of that hitting us hard with new signings who then get injured and missing chunks of the season (Wesley, Kamara, Carlos - all key signings through the central spine of our team - I'd even add Sanson to that list as I don't think we got to see him at the time when he would have had the biggest influence on the team).  But again I am sure that some of that risk is directly related to the fact that FFP stopped us from better addressing some of those issues rather than a strategic decision by the club.  That's not always true but it definitely hasn't helped - record signing being ruled out with a season long injury and only being able to "replace" him with someone who barely got on Swansea's bench being a classic example.  That is a clear example of FFP being a bigger threat to the viability of a club than the club being allowed to spend a relatively small amount to deal with a specific short-term emergency.