The AVFC FFP thread

[omariqy]

13 minutes ago, CVByrne said:

 

Swiss Ramble had a thing last year about the accounts of Everton. 

21/22 season for us we'll be in profit thanks to Jack's sale. 22/23 would likely around even or in profit. The really bad years are rolling off. I'd say we've a lot of FFP room atm. 

Cash, Martinez, Mings, Ramsey, Konsa, Kamara, Luiz, McGinn, Young, Olsen, Chambers all have zero or near enough to zero transfer fee amortisation left on contracts. So they cost us wages only essentially. It's a  critically important phase of the squad development cycle for us. 

Could we be holding off making big signings till the summer because of this?

[Demitri_C]

2 minutes ago, omariqy said:

Could we be holding off making big signings till the summer because of this?

It would be a bit of a mockery if your punishing everton when you have chelsea just taking the piss with thwie spending

[CVByrne]

25 minutes ago, omariqy said:

Could we be holding off making big signings till the summer because of this?

I don't think so. My gut feel is they're looking to have back to back "good" financial seasons so the 21/22 is going to be very good financially, Jacks sale assures of that. Then this season looks pretty healthy given we signed what 2 players in summer and 2 in Jan on transfer fee's. So total transfer fee cost this season in terms of the account for amortisation will be 10.75m for Carlos / Coutinho and and then 2.6m for Moreno / Duran. We banked 20m for Carneys sale and some small profits for AEG, Trezeguet, Ings too. We've slashed the wage bill too with all the players who've left on Loan or had loans cancelled. 

I think we're in really good shape as summer transfer window will be next years accounts. We can spend 150m+ no problem this summer if Davis, Hause, Sanson, Naka etc.. leave for fee's we can spend more than that. As if next season is a loss making one it gets averages with last season and this season for the 3 year period. We've a lot of financial strength to back Emery this summer. 

[sidcow]

1 hour ago, Czarnikjak said:

Last year's amortisation figures were surprisingly low, will see what Purslow has conjured this time around.

What? He's trying to destroy the club from within so will probably do his best to make them look worse. 

[CVByrne]

3 minutes ago, sidcow said:

What? He's trying to destroy the club from within so will probably do his best to make them look worse. 

Amortisation basically works as Transfer fee divided by number of years of the contract. So 50m fee and 5 year contract = -10m per year in terms of our accounts per year until the player is out of contract. 

You cannot alter this method of amortisation to push more to later years than early years (this is what Derby did and were docked points). What you can do is write down assets earlier, so for example Wesley cost 20m over 5 year contract. So -4m per year. We could write down -12m of that in the first year and then the remaining 8m is spread over the final 4 years so now -2m per year in our accounts. 

What that does is take a bigger loss in that years accounts for that asset (the players registration). This type of thing is rare as you're bringing forward losses, when the future value of the money is less (due to inflation). We thin this is what the club has done in the 20/21 accounts somehow. Which means the account years since are going to be better off. 

[sidcow]

18 minutes ago, CVByrne said:

Amortisation basically works as Transfer fee divided by number of years of the contract. So 50m fee and 5 year contract = -10m per year in terms of our accounts per year until the player is out of contract. 

You cannot alter this method of amortisation to push more to later years than early years (this is what Derby did and were docked points). What you can do is write down assets earlier, so for example Wesley cost 20m over 5 year contract. So -4m per year. We could write down -12m of that in the first year and then the remaining 8m is spread over the final 4 years so now -2m per year in our accounts. 

What that does is take a bigger loss in that years accounts for that asset (the players registration). This type of thing is rare as you're bringing forward losses, when the future value of the money is less (due to inflation). We thin this is what the club has done in the 20/21 accounts somehow. Which means the account years since are going to be better off. 

 

[MrBlack]

The issue with going big this summer is that we only get Grealish's money for one more year's FFP accounts.

The following year's FFP average over 3 years won't include it, but will include the massive amount we're expecting to spend this summer.

Not sure how much it really hinders us given how tightly we've been run since, but it's a concern for me. Given the losses we're allowed work out at £35m per year, losing a full £100m income from our 3 year average  is going to hurt.

[CVByrne]

8 hours ago, MrBlack said:

The issue with going big this summer is that we only get Grealish's money for one more year's FFP accounts.

The following year's FFP average over 3 years won't include it, but will include the massive amount we're expecting to spend this summer.

Not sure how much it really hinders us given how tightly we've been run since, but it's a concern for me. Given the losses we're allowed work out at £35m per year, losing a full £100m income from our 3 year average  is going to hurt.

It's more the rolling off of the Championship years and our first season up, plus Covid which will benefit us (as Covid year is averaged over 2 year period). Plus as stated above buying a premier league squad was also a big hinderance and the financial outlay is coming to an end. As in the fee's we paid for half the team have amortised down and the new contracts given to players takes what's left of their transfer fees and spreads it over the term of the new contract. So next season we will likely offer new contracts (or maybe sell) players like Watkins, Bailey. So the fee's left to owe on those will be extended over the new contracts too. 

This gives us the financial headroom to pay higher transfer fees for new signings. It also means if any of the players we sell will be booked profits. For example say we sold McGinn for 25m that goes straight into the accounts as profit (as would any of the players like Davis, Hause, Archer, AJ, JPB, Tim, KKH). I think it's a really important turning point in our financial state,

21/22, 22/23 and 23/34 = very healthy accounts. If we sell a players that booked 20m+ profit in a summer like we did with Jack, then Carney, Trez, AEG and will this summer with some sales Sanson, Traore, Davis, Hause, Naka. We'll be a mature top 10 PL club. We'll have a squad mostly with no amortisation left on their fees. If we extend Watkins / Bailey contracts (seen as good squad options for the club)

Coutinho -4.25m , Carlos - 6.5m  Buendia -7m , Moreno -2.7m , Duran -2.5m, Digne -5.5m. We'll have about -2m per year on Watkins / Bailey if they extend contracts and less for all others players. 

[Vive_La_Villa]

11 hours ago, Demitri_C said:

It would be a bit of a mockery if your punishing everton when you have chelsea just taking the piss with thwie spending

What makes you so certain they are breaching rules ? Maybe they are just spending every penny allowed. Plus they have been offering 8 year contracts. 

[Demitri_C]

39 minutes ago, Vive_La_Villa said:

What makes you so certain they are breaching rules ? Maybe they are just spending every penny allowed. Plus they have been offering 8 year contracts. 

Id love to see their wage bill and how they are sustaining it without no champions league

[Vive_La_Villa]

26 minutes ago, Demitri_C said:

Id love to see their wage bill and how they are sustaining it without no champions league

They haven’t not made Champions League yet. If they don’t it will be interesting to see what they do then.

[Demitri_C]

Just now, Vive_La_Villa said:

They haven’t not made Champions League yet. If they don’t it will be interesting to see what they do then.

But they wont make it. They are so far behind best chance is europa for them and that pays peanuts in comparison to CL.

This is why im suprised they spent so big as they dont seem to be taking that into consideration 

Ok they have split the contracts ovee 8 years  but if thats 10m a year for one player than 10m for another 4 more that means they have spent 40m of their transfer ffp budget for the next 8 years

[Tomaszk]

12 hours ago, omariqy said:

Could we be holding off making big signings till the summer because of this?

I think if we could have signed players for fees we felt were close to fair, we would have.

[Vive_La_Villa]

3 minutes ago, Demitri_C said:

But they wont make it. They are so far behind best chance is europa for them and that pays peanuts in comparison to CL.

This is why im suprised they spent so big as they dont seem to be taking that into consideration 

Ok they have split the contracts ovee 8 years  but if thats 10m a year for one player than 10m for another 4 more that means they have spent 40m of their transfer ffp budget for the next 8 years

They could win the champions league again.

Anyway back on topic, hopefully we are ready to spend big in the summer.

Edited February 1, 2023 by Vive_La_Villa

[MrBlack]

3 minutes ago, Vive_La_Villa said:

They haven’t not made Champions League yet. If they don’t it will be interesting to see what they do then.

They lose a lot of income.. at minimum they lose £13.1m, and assuming they progress from their group (they did in 2021 and have done this year) they're losing a total of over £25m. The year they won it they got about 70m from it. Its a huge chunk, but the year they won it they still got around 200m in TV rights from other sources. They would also lose the associated advertising, sponsorship and associated deals from the exposure they get.

Not qualifying this season means they'd have to sell about 5 academy products to fill the gap.

But they could qualify by winning the thing still...

 

Champs league financial details (may be a year out of date, but won't be any lower):

Teams who reach the group stage receive a fee of £13.14m, while each win in the group pays £2.32m and a draw gets you £770k.

Teams earn £8.16m for progressing to the round of 16, £9m for the quarter-finals and £10.3m for the semi-finals.

The winners of the Champions League then pocket £16m compared to the runners-up who receive £13m.

[bobzy]

12 hours ago, est1874 said:

Premier League and Football League need to stop pretending they give a **** about operational losses and "fairness". Just look at how Chelsea are cooking their books, it's disgusting. 

Game is deeply corrupt.

 

12 hours ago, Demitri_C said:

It would be a bit of a mockery if your punishing everton when you have chelsea just taking the piss with thwie spending

 

41 minutes ago, Demitri_C said:

Id love to see their wage bill and how they are sustaining it without no champions league

 

It isn't corruption - Chelsea have gamed the farcical FFP rules; personally, I love it.  Get players signed on 10 year contracts and you make the 3 year rolling periods look ridiculous.  Of course, they've now moved to shut this sort of thing down because no-one wants a workaround, eh?

On Chelsea themselves, their revenue is huge.  CL money is pretty irrelevant to be honest.

[est1874]

19 minutes ago, bobzy said:

 

 

 

It isn't corruption - Chelsea have gamed the farcical FFP rules; personally, I love it.  Get players signed on 10 year contracts and you make the 3 year rolling periods look ridiculous.  Of course, they've now moved to shut this sort of thing down because no-one wants a workaround, eh?

On Chelsea themselves, their revenue is huge.  CL money is pretty irrelevant to be honest.

Revenue from what though? It's just poaching young players and selling them for a x10 profit. Their stadium is smaller than ours and they're not the biggest team in London. 

Edited February 1, 2023 by est1874

[bobzy]

3 minutes ago, est1874 said:

Revenue from what though? It's just poaching young players and selling them for a x10 profit. Their stadium is smaller than ours and they're not the biggest team in London. 

Feel free to have a look:

"Chelsea FC's total revenue in 2021/22 represented an increase of 15 percent on the previous year, with the largest share of revenue coming from broadcasting payments. At 277 million euros, this was nearly half of the club's revenue for the year. The second-largest revenue stream was commercial, at 209 million euros."

https://www.statista.com/statistics/251147/revenue-of-fc-chelsea-london-by-stream/#:~:text=Chelsea FC's total revenue in,commercial%2C at 209 million euros.

Matchday income (stadium size) is barely a scratch.  Football clubs don't need fans to attend games, financially.

 

Edit:  Obviously football clubs as a whole do, but the top ones don't.

Edited February 1, 2023 by bobzy

[tomsky_11]

Estimate of amortisation outlook given current and best info I could find.

[ender4]

3 minutes ago, tomsky_11 said:

Estimate of amortisation outlook given current and best info I could find.

Thanks, thats a great table.    Shows how massively high our current amortisation is - £72m a year in this current (22/23) year!  Add wages onto that and we're basically touching FFP limits. 

By this summer it starts to improve slightly giving us some leeway to make a couple of decent signings, but even then not a huge amount we can spend unless we also lose some of these players with high amortisation.