The AVFC FFP thread

[The_Steve]

1 hour ago, Follyfoot said:

I honestly believe the sale was Jack was engineered by the club

Jack tried to leave every season. The club was smart to insert a very high release clause. He almost went to United the previous summer before his departure. 

[duke313]

From that Athletic article, sounds like they are on the ball in trying to get ahead of FFP.  The academy sales make sense now, so would expect to see more of that in the summer.

[ender4]

18 minutes ago, thabucks said:

Am I right in thinking then the 18months loan out of Coutihno rather than straight sale was to do with his amortisation costs so we didn’t  book a loss against his sale ? 

I'd assume the loan fee is for the same amount as our amortisation so then it wouldn't make a difference.  But yes the sale would trigger the loss all in this year, whereas the loan fee would offset the amortisation across 2 years accounting periods.

[HanoiVillan]

7 minutes ago, duke313 said:

From that Athletic article, sounds like they are on the ball in trying to get ahead of FFP.  The academy sales make sense now, so would expect to see more of that in the summer.

As I said elsewhere, the problem is I'm not sure who could sell this year for even Philogene's fee, let alone Archer's or Ramsey's. 

[duke313]

5 minutes ago, HanoiVillan said:

As I said elsewhere, the problem is I'm not sure who could sell this year for even Philogene's fee, let alone Archer's or Ramsey's. 

Tim the only one that jumps to mind.  Possibly KKH, Barry, Revan or Chrisene if they are deemed not good enough for first team, might not get huge fees but they all add up.

Another sale (that would cause a meltdown here) is JJ 

Edited January 12 by duke313

[Pongo Waring]

so we're close to the limit or can spend?
Confused.

[ender4]

20 minutes ago, Pongo Waring said:

so we're close to the limit or can spend?
Confused.

It's sounding more and more like we are very close to the limit and so can only spend if we sell or get very clever with the deals.

[tomsky_11]

48 minutes ago, ender4 said:

It's sounding more and more like we are very close to the limit and so can only spend if we sell or get very clever with the deals.

Nope. Chill.

[Pinebro]

3 hours ago, Pongo Waring said:

so we're close to the limit or can spend?
Confused.

Need income to spend which means it will be a very tight January budget unless we sell big.

[OutByEaster?]

37 minutes ago, Pinebro said:

Need income to spend which means it will be a very tight January budget unless we sell big.

Our income remains quite mysterious though considering we've improved massively on the field and increased prices hugely off it since the last set of figures.

 

[ender4]

14 minutes ago, OutByEaster? said:

Our income remains quite mysterious though considering we've improved massively on the field and increased prices hugely off it since the last set of figures.

 

I'm not sure we have increased it by a lot though. 

On the field - improved from 14th to 7th. I think that's an extra £16m.

Pricing - Increased by roughly 15% on a matchday income of £16m, so an extra £2.5m

Commercial - BK8 only started this year, so no change from Cazoo since the last published set of accounts - £0.

 

Then for the current year:

On the field (so far) - 7th to around 4th - £7m more. Plus Europe say another £10m so far.

Pricing - Another 10% increase - £2m extra.

Commercial - BK8 adds another £5m?

 

Between the two years i guess its a decent increase, but salaries and amortisation must have massively increased in that same period as well.

[OutByEaster?]

1 minute ago, ender4 said:

Pricing - Increased by roughly 15% on a matchday income of £16m, so an extra £2.5m

Over the last two years I'd put the increase at 50% or more and the stadium yield will go up more than that due to the banding changes - I wouldn't be too surprised if by the end of this season that figure has doubled from two years ago.

 

[ender4]

2 minutes ago, OutByEaster? said:

Over the last two years I'd put the increase at 50% or more and the stadium yield will go up more than that due to the banding changes - I wouldn't be too surprised if by the end of this season that figure has doubled from two years ago.

 

Oh yes, we are also playing more home games this year - at least 4 more games so far due to Europe.

[tomsky_11]

1 minute ago, MrBlack said:

the effort required to breach the monopoly will have been heavily predicated on us getting one of  if not the,  best manager in the world. That's hardly a model for other clubs to follow

Is it not? Costs less to get a high end management team than maybe even one high end player, and likely has a bigger impact on the team overall.

[KMitch]

The problem is we generate a fraction of the revenue that the "elite" clubs bring in.  The only way to grow revenue is to grow our global fan base, which leads to better sponsorships/merchandising deals, and the only way to do that is to have sustained success on the pitch.  The catch is that it's extremely hard to have success on the pitch while only able to invest a fraction of the funds our rivals can into our playing squad.  This is why it's critical to back Emery 100% and continue to get him every single cent he can invest into increasing the quality of the first team.  We're already getting new fans this season and once Emery wins his first trophy at the Villa, it'll only continue to grow, but clubs like Chelsea and Man United won't continue to burn their funds on the wrong players/staff forever.  We need to take this opportunity over the next 3-5 seasons, win some silverware, and firmly reestablish ourselves among the elite in England again.

[blandy]

Posts moved. This thread is for Villa specific FFP discussion.

If you want general chat about the merits or otherwise of FFP, or other clubs’ FFP situation, please use

 

 

[CVByrne]

On 13/03/2023 at 11:02, Czarnikjak said:

Accounts analysed by Swiss ramble with detailed breakdown of our ffp situation 

https://swissramble.substack.com/p/aston-villa-finances-202122

 

On 06/03/2023 at 12:04, CVByrne said:

The highlights from accounts for FFP

Income 178.4

Profit on player sales 97.4

Wages 137

Amortisation 85.3 (inc depreciation)

FFP accounts for year (178.4 + 97.4) - (137 + 85.3) = +£53.5m

So we're £44m in sales short of neutral for FFP. (we can run a 100m loss over 3 years in FFP though)

Our revenue needs to improve (hopefully it has last season).

 

On 11/05/2023 at 17:03, CVByrne said:

I think I tried something earlier in the thread. 

Let's just assume an income of 210m for season up ~30 from last. 

Player sales - Chuk, Trez, AEG, Ings. I think that'll be ~25 in profit

Players signed. Diego Carlos 26m, Coutinho 17m, Dendoncker 13m, Moreno 14m and Duran 14m, Olsen 2m. Kamara on free

so -6.5, 4.25, 3.25, 1.5, 1.4, 0.5 = 17.5m in new signing amortisation (assume half a season of Ings offsets the additional half season of Digne). 

So now we have wages. We've had a few go out on loan - Sanson, Traore, Nakamba which should help a little bit. But overall wages surely rise 

Lets say additional 6months of Coutinho = 3.25m, full season Kamara = 7m, Dendoncker = 3.5m, Carlos 2.6m (assume insurance covers half of his 5.2m). Moreno / Duran say 1.5m each. 

So wages say + 19.3m and we save say 10m on loans and players who left (Targett etc..). So wages up ~10m

So Income up 30m, player sales 25m, new amortisation 17.5m, wages up 10m. So that's +27.5m in this years accounts from last years. 

We'll also be helped too by new contracts helping our amortisation spread with Martinez and Cash (signed 2nd half of last season) and Mings and hopefully Watkins this season. Gives us a 5m say bump. So we're looking at say +32.5m

I missed off Luiz from the new contracts which would reduce Amort by ~2.5m, I also forgot we would have Trez and AEG Amort drop off as they were sold (another 5m). I think our income will rise more than 30m as we ended 7th and I would expect Matchday and Commercial revenues to rise. I didn't factor in Gerrard compensation as we fired him during the season. 

But here's what I've come up with. P/L is for FFP purposes. I've taken Income + Profit on sales (added Covid allowance) and taken away Squad cost (Wages and Amortisation). This is how new UEFA rules work. Squad cost for this season of 90%, next season is 80% and then 70%. 

 

Edited January 13 by CVByrne

[VillaJ100]

56 minutes ago, CVByrne said:

I missed off Luiz from the new contracts which would reduce Amort by ~2.5m, I also forgot we would have Trez and AEG Amort drop off as they were sold (another 5m). I think our income will rise more than 30m as we ended 7th and I would expect Matchday and Commercial revenues to rise. I didn't factor in Gerrard compensation as we fired him during the season. 

But here's what I've come up with. P/L is for FFP purposes. I've taken Income + Profit on sales (added Covid allowance) and taken away Squad cost (Wages and Amortisation). This is how new UEFA rules work. Squad cost for this season of 90%, next season is 80% and then 70%. 

 

So you're saying we've made a £22.65mil profit over 3 seasons? And we can lose what £120 million? Let get spending 

[CVByrne]

8 minutes ago, VillaJ100 said:

So you're saying we've made a £22.65mil profit over 3 seasons? And we can lose what £120 million? Let get spending 

You need to forget those rules. The Squad Cost rule is the main one we need to comply with, the new UEFA ones. Also we're only allowed lose 60m Euro lost over last season and this season accounts combined. So in those new regulations we need to have a squad cost of 90% for 2023 and 80% for 2024 and a 2 year loss no higher than 60m Euro

Quote

Stability will be covered by the former FFP rules, whereby a club’s loss over the 3-year monitoring period is restricted to the “acceptable deviation”. However, the limit has been doubled from €30m to €60m, so long as any excess over €5m is covered by an equity contribution from the owner.

 

In addition, if a club is deemed to be in good financial health, then it could be permitted up to an additional €10m allowance per reporting period, i.e. €30m over the 3-year monitoring period. This would mean that a club’s FFP allowable losses could potentially triple from €30m to €90m.

Cost Control

 

UEFA’s objectives in adding the new cost control ratio were to:

• Provide a direct measure between squad costs and income to encourage more performance-related costs.

• Limit the inflationary impact of wages and transfer fees of players.

Unlike the Stability and Solvency rules, the Cost Control rule does not have a predecessor in the FFP regulations. UEFA had previously recommended keeping wages below 70% of revenue, but this has now been formally incorporated in the latest regulations as one of the three formal pillars.

This is interesting, as it is effectively the first time that UEFA has applied a salary cap, albeit a “soft” variant, while the financial sanctions could be described as a sort of “luxury tax”.

The cost control requirement must be fulfilled by all clubs that have qualified for the group stage of UEFA’s competitions with wages above €30m (for all employees).

Squad Cost Ratio Calculation

 

A club’s squad cost ratio is calculated as the sum of:

• Wages of players and head coaches

• Player amortisation and impairment

• Termination payments for players and head coaches

• Agents’ fees and cost of other intermediaries

Divided by the sum of:

• Operating revenue (adjusted for fair value, if required)

• Profit from player sales

• Other transfer income/expenses

In this way, a club’s spending should be capped to 70% of the money it earns from football activities.

For example, if the club’s total earnings are £400m, then its spending cap for the relevant expenses referred would be £280m, i.e. £400m x 70%.

UEFA Squad Cost Control Ratio 2023 - The Swiss Ramble (substack.com)

 

Edited January 13 by CVByrne

[Mic09]

What we must remember (and apparently this has hit Newcastle rather badly) the players will have CL clauses in their contracts. I would be surprised if players like Chambers or Olsen all of a sudden had a 30% salary bump if we did get CL. 

It is therefore important to make sure our squad is well structured in the summer. We don't want a situation like Newcastle paying crazy money to Matty Targett.