The AVFC FFP thread

[villarule123]

There won't be a FFP soon if the Saudis keep building their league.

[MWARLEY2]

No one doubts we have to keep an eye on ffp. It was Evans suicidal persona that pissed people off. I think that we will always be at the upper limits of ffp for the short and medium term. Its a business decision to try and compete with the others. Squeeze every last penny we can and get it on the pitch   Cannot see us being stupid like Leeds and Everton though. 

[Marka Ragnos]

Erm, don't we kind of need to sell some ****-ing players? Kind of wondering these things ...

1. FFP is just too complicated for even the indomitable Hive Mind of VT to figure out (because we seem to be pretty damn blithe about it all, after all). Where are our Cassandras? Some of us understand Europa Conference brackets, so we much we clever enough to get FFP.
2. FFP is not something we need to worry about because NSWE "got this."
3. We are heading towards Wolves fuggedupedness and no one understand that anywhere.

[omariqy]

So trying to get my head round where we are at with FFP.

2021/22 - we booked a £0.4m profit

2020/21 - we lost £37m 

2019/20 - we lost £99m but £36m of this was COVID losses

Allowable losses are £105m over a 3 year rolling period. Next year the 2019/20 rolls away. So for 2022/23 we should have allowable losses of c£70m to stay within FFP? Or am I missing something. 

[SeanVilla]

22 minutes ago, omariqy said:

So trying to get my head round where we are at with FFP.

2021/22 - we booked a £0.4m profit

2020/21 - we lost £37m 

2019/20 - we lost £99m but £36m of this was COVID losses

Allowable losses are £105m over a 3 year rolling period. Next year the 2019/20 rolls away. So for 2022/23 we should have allowable losses of c£70m to stay within FFP? Or am I missing something. 

Yes this is correct. Worth noting the Athletic article regarding what Chelsea are doing. Buying players spreads the fee over the contract, so for us this season, £45mill for Diaby over 5 years is £9mill this year, Torres £6mill this year which is offset by the £14mill we are getting for AJ (sales can be offset straight away for that year - any transfer fee still to be paid). So in theory we can still spend but it gets tricky because you have to consider the transfer fees we are still paying off for the whole squad. This also doesn’t include the added losses of wages also. 

 

Edited August 15, 2023 by SeanVilla

[omariqy]

5 minutes ago, SeanVilla said:

Yes this is correct. Worth noting the Athletic article regarding what Chelsea are doing. Buying players spreads the fee over the contract, so for us this season, £45mill for Diaby over 5 years is £9mill this year, Torres £6mill this year which is offset by the £14mill we are getting for AJ (sales can be offset straight away for that year - any transfer fee still to be paid). So in theory we can still spend but it gets tricky because you have to consider the transfer fees we are still paying off for the whole squad. This also doesn’t include the added losses of wages also. 

 

Big concern is ongoing sustainability in terms of wages and revenue. I assume our Revenue is near £200m now given increase in commercial sponsorship etc. However, our wage bill will be pretty large now. 

[Czarnikjak]

27 minutes ago, omariqy said:

So trying to get my head round where we are at with FFP.

2021/22 - we booked a £0.4m profit

2020/21 - we lost £37m 

2019/20 - we lost £99m but £36m of this was COVID losses

Allowable losses are £105m over a 3 year rolling period. Next year the 2019/20 rolls away. So for 2022/23 we should have allowable losses of c£70m to stay within FFP? Or am I missing something. 

 

[alreadyexists]

Surely with the incredible inflation we are seeing they’ll have to raise that £105m figure. Or better yet set it inversely to your league position… crazy idea as it will not be popular with Man City or those rocket polishers but F1 do it with wind tunnel time I believe, so the same could be applied here. £200m losses for 17th and a lesser and lesser figure all the way up to Man City who could have £50m losses… 

They’ll never go for it, but it would be good.

[CVByrne]

4 minutes ago, omariqy said:

Big concern is ongoing sustainability in terms of wages and revenue. I assume our Revenue is near £200m now given increase in commercial sponsorship etc. However, our wage bill will be pretty large now. 

I think the club will be doing sales with buy back clauses for our young prospects unless Emery thinks they can be part of the first team squad (like Philogene). So if it's Ramsey and Archer this summer. It could be Iroegbunam and Kessler Hayden next summer etc..

Having this profit stream is pretty significant. Also we will have profit from other player sales too. 

[omariqy]

14 minutes ago, Czarnikjak said:

 

Sorry am I reading that we have £96m of headroom?

[Czarnikjak]

2 minutes ago, omariqy said:

Sorry am I reading that we have £96m of headroom?

Correct. So Premier League ffp is not a limiting factor atm, but as we qualified for Europe now, we are also subject to the new UEFA squad cost control rules, which are very strict in comparison.

[omariqy]

16 minutes ago, Czarnikjak said:

Correct. So Premier League ffp is not a limiting factor atm, but as we qualified for Europe now, we are also subject to the new UEFA squad cost control rules, which are very strict in comparison.

Would you mind expanding on that sorry mate?

[CVByrne]

13 minutes ago, omariqy said:

Would you mind expanding on that sorry mate?

Our annual cost on squad is basically every players transfer fee / length of contract + annual salary. 

So a player who cost 25m on a 5 year contract is £5m cost per year in terms of the transfer fee + wages. 

So you add all that up for our squad you get the annual "cost" or the negative numbers.

Income is then everything you expect, TV, sponsorship, tickets, shirt sales. So that's the positive numbers. The difference between cost annual income is our annual "FFP" number.

The one additional item in here is how player sales work. They can be profit or loss depending on the sale price and the remaining amount of the transfer fee the player cost left on the books.

So Bailey for example cost 25m on 4 year contract. He's 2 years into that so he has remaining cost left if 12.5m so if we sell him, the profit or loss would be sale price - 12.5m 

It's why youth players are all profit. There was no transfer fee. 

 

[omariqy]

19 minutes ago, CVByrne said:

Our annual cost on squad is basically every players transfer fee / length of contract + annual salary. 

So a player who cost 25m on a 5 year contract is £5m cost per year in terms of the transfer fee + wages. 

So you add all that up for our squad you get the annual "cost" or the negative numbers.

Income is then everything you expect, TV, sponsorship, tickets, shirt sales. So that's the positive numbers. The difference between cost annual income is our annual "FFP" number.

The one additional item in here is how player sales work. They can be profit or loss depending on the sale price and the remaining amount of the transfer fee the player cost left on the books.

So Bailey for example cost 25m on 4 year contract. He's 2 years into that so he has remaining cost left if 12.5m so if we sell him, the profit or loss would be sale price - 12.5m 

It's why youth players are all profit. There was no transfer fee. 

 

Ha no sorry mate - I get how Amortisation etc works. I meant how the UEFA rules differ.

[tomsky_11]

54 minutes ago, omariqy said:

Sorry am I reading that we have £96m of headroom?

That figure is for the 2021/22 assessment period. This season is two years down the line from that. So lose the first two periods from the above table (-34m) and add 22/23 adjusted results (not published yet but can make a reasonable assumption on these) and you have our headroom for 23/24. It probably comes back to a similar figure. Though we wouldn't want use up all that amount as will make things incredibly difficult next season without major sales. Also because of the UEFA rules as others have mentioned.

A few months back I'd predicted we'd probably be looking a £100m spend across 4 players and bringing in £20-30m moving fringe players, and this would leave us in a reasonable position going forward. We are probably at about £75-85m on 3 players in and around £15-20m on outgoings once Ramsey confirmed, with more fringe players still to shift.

[Czarnikjak]

9 minutes ago, omariqy said:

Ha no sorry mate - I get how Amortisation etc works. I meant how the UEFA rules differ.

It's very different and quite simple.

Your squad cost is allowed to be 80% of your revenue (this season, next season drops to 70%).

Squad cost is sum of playing and coaching staff salaried plus amortisation. 

This is divided by your revenue with added profit on player sales (averaged over last 3 years.)

So as our revenue is about £200m and average profit on player sales is about £40m, we can spend on wages and amortisation upto 80% of £240m, all ball park figures.

[Demitri_C]

This could be why we are trying to flog digne off. With his wages off the books we havw a bigger scope with ffp

[thabucks]

Can only see us selling him also if we make a book profit as well 

[CVByrne]

1 hour ago, omariqy said:

Ha no sorry mate - I get how Amortisation etc works. I meant how the UEFA rules differ.

We can only spend 90% of our revenue on squad cost this year, then 80% next year then 70% year after. 

Quote

Transitional Provisions

The Cost Control requirements will not apply in the 2022/23 season but will come into force only gradually:

- The squad cost ratio of the club should not exceed (i) 90% in the 2023/24 season and (ii) 80% in the 2024/25 season.

- The net profit/loss on disposal of player (or head coach) registration and other transfer income/expenses is calculated: (i) in 2023/24 for either one, two or three calendar years; and (ii) in 2024/25 for either two or three calendar years to 31 December during the licence season and then pro-rated to 12 months, at the discretion of the club.

UEFA’s new Cost Control Rule: a Salary Cap in all but name? (linklaters.com)

Edited August 15, 2023 by CVByrne

[omariqy]

1 hour ago, Demitri_C said:

This could be why we are trying to flog digne off. With his wages off the books we havw a bigger scope with ffp

And Archer will aid our upfront profit too.