The AVFC FFP thread

[Czarnikjak]

13 minutes ago, tomsky_11 said:

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

Thanks for that, this is great summary.

Did you create the table yourself or you found it somewhere?

[Demitri_C]

3 hours 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.

It really isnt as huge as people thjnk. They would have been bankrupt if ro.an wasnt writing off the debt.  Their stadium revenue isnt big either.

They rely heavily on CL money and sponsorships. The big sponsors will go if thwy become a non cl side then they have to rely on owners wealth

[TRO]

[MarkLillis]

10 minutes ago, ender4 said:

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.

-72m looks high.

Can anyone show what it’s like in comparison with other Premier League clubs?

[blandy]

4 hours ago, Demitri_C said:

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

They had a year where they were under a transfer ban, didn’t they? So they spent nothing on transfers at all for that year, so that helps them.

[tomsky_11]

39 minutes ago, ender4 said:

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.

My initial thoughts are more postive as the table has amortisation a combined £20m lower across 21/22 and 22/23 than I had previously estimated last summer. And on that estimate we already had plenty of room for FFP in 2023, even with what I think were conservative revenue estimates.

[tomsky_11]

38 minutes ago, Czarnikjak said:

Thanks for that, this is great summary.

Did you create the table yourself or you found it somewhere?

Thanks. Made myself.

[Czarnikjak]

3 minutes ago, tomsky_11 said:

My initial thoughts are more postive as the table has amortisation a combined £20m lower across 21/22 and 22/23 than I had previously estimated last summer. And on that estimate we already had plenty of room for FFP in 2023, even with what I think were conservative revenue estimates.

What caught me out was the drop between 2020 and 2021.

It dropped from £71m to £56m without major player sales and with significant additions to the squad.

Not easily explainable, unless we are not using linear amortisation (we front loaded some players?) 

 

[tomsky_11]

28 minutes ago, Czarnikjak said:

What caught me out was the drop between 2020 and 2021.

It dropped from £71m to £56m without major player sales and with significant additions to the squad.

Not easily explainable, unless we are not using linear amortisation (we front loaded some players?) 

 

My table has 18/19 and 19/20 in it but hidden above, as couldn't get close to the £71m with anything that made sense, and as its less relevant now given player turnover, and that my 20/21 figures seem to tie (more by luck they exactly match the accounts than the data being accurate imo)

How would additional fees to clubs for players based on promotion be treated? Could this explain the big uptick in 2019/20? We still had a number of players bought for reasonable fees on the books at least in part of 19/20 period, eg. Hogan, Kodjia, Chester, McCormack, etc.

 

[ender4]

1 hour ago, MarkLillis said:

-72m looks high.

Can anyone show what it’s like in comparison with other Premier League clubs?

We should compare vs Chelsea haha! 

[Folski]

1 hour ago, tomsky_11 said:

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

Does Dignes not look a bit low at £2.8m per year considering we paid £25m for him.

[MrBlack]

6 hours 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. 

 

6 hours ago, bobzy said:

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.

That season was during covid so matchday revenues were largely none existent.  They make over 50m in matchdays during a normal season, so definitely not insignificant. 

We, by comparison, only make just over 10m.

Edited February 1, 2023 by MrBlack

[TomC]

20 hours ago, Hank Scorpio said:

All they want to do is keep the same six now soon to be 7 teams in power. They just need the cannon fodder like villa to win against one of them so often so they can continue to sell the best league in the world narrative to the rest of the world

Half true...

FFP was designed to protect "old money" clubs...Real Madrid, Man U, Bayern Munich...clubs that have always had high revenues and want to use their revenues to stay on top.

FFP was aimed against "new money" clubs like Man City, PSG, and (now) Newcastle who have state backers and could outspend the old money. Like the old money, they may end up protected against smaller clubs, but they are being checked compared to what they could do without FFP.

 

 

[Vive_La_Villa]

6 minutes ago, TomC said:

Half true...

FFP was designed to protect "old money" clubs...Real Madrid, Man U, Bayern Munich...clubs that have always had high revenues and want to use their revenues to stay on top.

FFP was aimed against "new money" clubs like Man City, PSG, and (now) Newcastle who have state backers and could outspend the old money. Like the old money, they may end up protected against smaller clubs, but they are being checked compared to what they could do without FFP.

 

 

This is true. We have complained our owners are restricted by FFP but there would honestly be no limit to what City, Newcastle and PSG could do without it. 

[bobzy]

1 hour ago, MrBlack said:

 

That season was during covid so matchday revenues were largely none existent.  They make over 50m in matchdays during a normal season, so definitely not insignificant. 

We, by comparison, only make just over 10m.

Yeah, £50m in £600m~.

It's not nothing, but it's not a huge deal.

[TomC]

Chelsea's recent strategy has drawn a lot of attention. It is clearly influenced by North American sport (I'll abbreviate to NAS), where the strategy sometime works, sometimes doesn't.

First, one important difference between NAS and football is that there are no transfer fees in NAS. Baseball, the earliest established NAS, had them early in its existence, but for some reason, they outlawed them, and the other NAS followed suit when they became established. In-contract players can move only by trade. Therefore, the NAS salary caps or luxury taxes take only salary into consideration because salary is the only expense. In football, FFP factors in both transfer fee AND salary. However, as we've learned, transfer fees are amortized across the life of a contract. Therefore, they both leave open the strategy that Chelsea has tried: Give a player an artificially long contract to spread out the expenses.

Players like the long contracts; even though they have to wait longer for their money, the present value of future payments is usually taken into account when calculating the amount, and furthermore, it gives them a guaranteed stream of payments at an age where they could be out of the league because of injury or plain old aging.

Sounds simple, right? Well, nobody in England has seen what happens on the back end yet. If you take a 25-year old and give him a 8 year contract, he's going to be 33 at the end of the contract. Many players are done by that age, or at least going downhill. You're stuck with an expense on the books, but the player can't do anything for you. He interferes with your ability to sign other players down the road. Furthermore, if the player doesn't work out, you may have trouble moving the player on because nobody else wants the long-term hit.

So why have teams done this in NAS? Two different reasons.

First, you have a team in "win now" mode. They have a core of players that have put them within reach of a championship, and they want to sign a few players to put them over the top before their core gets old. They know that they're tying up part of their spending ability down the road, but they're willing to make that sacrifice because their core would have faded, anyway, closing their window of opportunity. However, the strategy does make those future lean years even leaner. Teams have gotten themselves into very bad situations where they're awful for years because they're limited by the financial effects of old signings.

Second, teams sometimes bet that that revenues will increase so much such that the back end of the contract won't matter much. This is sometimes the case where a TV contract is expiring and you think that revenues from the new contract will increase the salary cap/luxury tax threshold by so much as to dwarf the back end of your long-term contracts.

So what is Chelsea thinking? I'm not quite sure. As for reason 1, Chelsea is probably the weakest of the "Big 6" right now and is nowhere near a championship. As for reason 2, the PL just got a new TV contract, so I don't know if revenues are going to go up much any time soon. Maybe something is coming up with the CL contract and they want to be sure they get a piece of that money. Maybe they think that, by being the first to try the strategy in the PL, they'll get a leg up on their competitors. But the bottom line is, they could suffer down the road.

A second big difference between NAS and football is that in NAS, the salary cap or luxury tax is the same for every team in the league, while in football, FFP is based on the individual club's revenues. That is just part of the reason NAS does not have as much of a "permanent aristocracy." But that's a topic for another time.

 

 

 

[Czarnikjak]

3 hours ago, tomsky_11 said:

How would additional fees to clubs for players based on promotion be treated? Could this explain the big uptick in 2019/20? We still had a number of players bought for reasonable fees on the books at least in part of 19/20 period, eg. Hogan, Kodjia, Chester, McCormack, etc.

 

Good shout, but I don't think any addons we might have been due upon promotion could come close to explain this sudden jump to £71m and subsequent drop to £56m again.

Can we see the column for 19/20 season of your table? I'm curious how big the calculated shortfall to £71m actually was.

[Mark Albrighton]

Thread on the Ings transfer and its relation to FFP.

Won’t pretend I fully follow this or that I suddenly feel great about letting our current top goal scorer go for a price that I think is a little short.

But as has been said before on here, there’s obviously other factors that are being considered with a view to the future.

 

[tomsky_11]

4 hours ago, Folski said:

Does Dignes not look a bit low at £2.8m per year considering we paid £25m for him.

Yep, my bad. Corrected.

 

[est1874]

1 hour ago, Mark Albrighton said:

Thread on the Ings transfer and its relation to FFP.

Won’t pretend I fully follow this or that I suddenly feel great about letting our current top goal scorer go for a price that I think is a little short.

But as has been said before on here, there’s obviously other factors that are being considered with a view to the future.

 

Our top scorer was 10% of our total FFP budget? Wow, shocker.