The AVFC FFP thread

[NurembergVillan]

14 minutes ago, JAMAICAN-VILLAN said:

Would you be against "Villa Park - Powered by Recon" or something of the sort, with the Recon etc in smaller lettering underneath?

If it meant we could get say an extra 20 mill per season?

Genuine question for you lot.

You could name Villa Park anything you like really, and it'll always be Villa Park.

It's when you have a new stadium with a janky name (like The Emirates, or The Etihad) that there's nothing else to call it so the name sticks.

I'd happily watch us parading the Champions League trophy around The Durex Thunderdome if that's what was required.  As long as the kit is the right colour and the badge has got a lion on it, I'm all good.

[tonyh29]

23 minutes ago, JAMAICAN-VILLAN said:

Would you be against "Villa Park - Powered by Recon" or something of the sort, with the Recon etc in smaller lettering underneath?

If it meant we could get say an extra 20 mill per season?

Genuine question for you lot.

I think with that it's kind of a  one shot deal and has to be at market rates  , so that move might be reserved for when we are back up and we can sell it for £100m without anyone batting an eye , where as they might if we do it in the championship

[Daweii]

27 minutes ago, JAMAICAN-VILLAN said:

Would you be against "Villa Park - Powered by Recon" or something of the sort, with the Recon etc in smaller lettering underneath?

If it meant we could get say an extra 20 mill per season?

Genuine question for you lot.

I'm not very sentimental so Xia could buy the naming rights, hell he could knock down and re-build the whole stadium.. I understand the sentimentality I do, but it's 2018 and selling/doing these things offers clubs a major advantage.

[Morley_crosses_to_Withe]

36 minutes ago, dukes said:

I assume you mean the former ? and hope it's the latter ?

Yes, I doubt this is a multi million pound sponsorship. I actually think it’s purely an exchange of services - Recon will improve the training ground through various developments and initiatives whilst the club will in turn provide benefits that will enhance the Recon brand. 

It’s seems interesting, but nothing to get too excited about. 

[Demitri_C]

This is a great idea if helps with FFP, great idea Dr Tone. Smart man 

[tomav84]

well that's that sorted then...close the thread

 

[villan-scott]

FFP? Completed it mate. 

[Dodgyknees]

3 minutes ago, villan-scott said:

FFP? Completed it mate. 

Try the cheat code: W0LV3S for even more power

[Daweii]

1 hour ago, Morley_crosses_to_Withe said:

Yes, I doubt this is a multi million pound sponsorship. I actually think it’s purely an exchange of services - Recon will improve the training ground through various developments and initiatives whilst the club will in turn provide benefits that will enhance the Recon brand. 

It’s seems interesting, but nothing to get too excited about. 

I think this is likely a multi-million pound sponsorship. 

Keith Wyness when asked months and months ago if we had a backup plan for not going up this season he said "Xia has everything in order in case our promotion looks to be in doubt".

It wouldn't surprise me if this was the backup plan to give us an FFP boost when FFP could be closing in on us next season.

Now best case scenario is we get promoted which will likely be through the playoffs, but there is a chance that we won't get promoted and we need the cash to stay on the right side of FFP. 

[TRO]

6 hours ago, DCJonah said:

Bodymoor heath renamed recon training complex with a 5 year sponsorship deal. 

Is this our way of getting round FFP?

Tell the world......someone who wants to throw a spanner in the works, might want to know.

[TRO]

3 hours ago, Daweii said:

I think this is likely a multi-million pound sponsorship. 

Keith Wyness when asked months and months ago if we had a backup plan for not going up this season he said "Xia has everything in order in case our promotion looks to be in doubt".

It wouldn't surprise me if this was the backup plan to give us an FFP boost when FFP could be closing in on us next season.

Now best case scenario is we get promoted which will likely be through the playoffs, but there is a chance that we won't get promoted and we need the cash to stay on the right side of FFP. 

We need to trust our owners......they want what we want.

[TRO]

4 hours ago, Demitri_C said:

This is a great idea if helps with FFP, great idea Dr Tone. Smart man 

I think there is a sneaky, sneaky, feeling......he knows a bit more than us.

[sidcow]

This is a win win situation. 

If Recon sponsor Bodymoor Heath for £20 squillion I will certainly buy and use a lot more of their products than I currently do. I can certainly see them getting their money back from all us Villa fans buying Recon this and Recon that.  To be fair they are already one of my favourites brands.  

(For any of the FFP police reading) 

[TRO]

5 hours ago, tonyh29 said:

I think with that it's kind of a  one shot deal and has to be at market rates  , so that move might be reserved for when we are back up and we can sell it for £100m without anyone batting an eye , where as they might if we do it in the championship

Its those bloody eye lids thats doing it

[JAMAICAN-VILLAN]

40 minutes ago, TRO said:

Tell the world......someone who wants to throw a spanner in the works, might want to know.

[hippo]

OK - Can we have a dummies guide to FFP as it applies in the championship - here is what I know (i think)

1.The FFP calculated losses are different to that show in the club accounts - The club has to submit an FFP statement to ensure compliance or non compliance. 

2.you are not allowed to make significant losses 3 years in a row.

3.The owner can not make the club look profitable - by donating money to the books.

Over to the experts .....................

[Rob182]

A twitter page called ‘SwissRamble’ just posted the following thread:

 

Following Aston Villa’s defeat in the Championship play-off final, I’ve taken a look at their Financial Fair Play (FFP) challenges. The conclusion is that they will be fine for 2017/18, but will need to take action to meet the 2018/19 target. Some thoughts follow #AVFC

FFP is assessed over a three-year period (current season plus previous two seasons). Annual allowable loss is £13m in Championship and £35m in Premier League, so #AVFC maximum FFP losses are £83m in 2016/17, £61m in 2017/18 and £39m from 2018/19.

#AVFC stated in their 2016/17 accounts that “EFL Financial Fair Play regulations continue to provide a significant challenge”. This problem is getting worse, as their parachute payments are falling at the same time as their allowable FFP losses decrease.

One point that should be noted is that FFP losses are different from losses in the accounts, so #AVFC can exclude around £11m a year (for academy £5.9m, community £2.0m and infrastructure £2.9m) plus once-off stadium revaluation (booked as £45m impairment in 2015/16).

In this way, I’ve calculated that #AVFC were £38m below FFP limit of £83m in 2016/17. Total reported profit before tax for 3-year period was £123m, but the FFP loss was reduced to £45m after £78m exclusions: FFP deductions of £33m (3 years at £11m) plus £45m stadium impairment.

For 2017/18, #AVFC parachute payment fell from £41m to £34m, while profit on player sales down from £27m to (estimated) £11m. Assumes no change in wage bill or revenue (commercial already halved in 16/17; match day should be same as 16/17 – attendance same, ticket prices frozen).

So #AVFC 2017/18 loss before tax estimated at £37m, i.e. £22m worse than 2016/17. After excluding £78m (FFP deductions £33m plus stadium impairment £45m), the total FFP loss for 3-year monitoring period would be £55m, i.e. £6m below 2017/18 FFP limit of £61m.

For 2018/19, #AVFC parachute payment falls from £34m to £17m. If we assume no other changes and zero profit on player sales, we can see how much money Villa need to find to meet FFP limit of £39m. The shortfall is £45m, which must be made up by cuts in wage bill or player sales.

Of course, this is only an estimate, where numbers could easily change, e.g. revenue might further fall in Championship, so more money would have to be found. However, central point remains valid: #AVFC need to take action this summer to reduce losses to avoid issues with FFP.

I don’t know how accurate his info is. He seems to have included the Amavi transfer in last year’s figures, and that £45m shortfall sounds a bit.. worrying. Maybe others can verify his info, or provide their own tuppance. Kenneth Williams photo.

[villan_007]

Does anyone know if the training ground sponsorship will benefit us as a clever work around at all?

[KSV]

3 minutes ago, Rob182 said:

A twitter page called ‘SwissRamble’ just posted the following thread:

 

Following Aston Villa’s defeat in the Championship play-off final, I’ve taken a look at their Financial Fair Play (FFP) challenges. The conclusion is that they will be fine for 2017/18, but will need to take action to meet the 2018/19 target. Some thoughts follow #AVFC

FFP is assessed over a three-year period (current season plus previous two seasons). Annual allowable loss is £13m in Championship and £35m in Premier League, so #AVFC maximum FFP losses are £83m in 2016/17, £61m in 2017/18 and £39m from 2018/19.

#AVFC stated in their 2016/17 accounts that “EFL Financial Fair Play regulations continue to provide a significant challenge”. This problem is getting worse, as their parachute payments are falling at the same time as their allowable FFP losses decrease.

One point that should be noted is that FFP losses are different from losses in the accounts, so #AVFC can exclude around £11m a year (for academy £5.9m, community £2.0m and infrastructure £2.9m) plus once-off stadium revaluation (booked as £45m impairment in 2015/16).

In this way, I’ve calculated that #AVFC were £38m below FFP limit of £83m in 2016/17. Total reported profit before tax for 3-year period was £123m, but the FFP loss was reduced to £45m after £78m exclusions: FFP deductions of £33m (3 years at £11m) plus £45m stadium impairment.

For 2017/18, #AVFC parachute payment fell from £41m to £34m, while profit on player sales down from £27m to (estimated) £11m. Assumes no change in wage bill or revenue (commercial already halved in 16/17; match day should be same as 16/17 – attendance same, ticket prices frozen).

So #AVFC 2017/18 loss before tax estimated at £37m, i.e. £22m worse than 2016/17. After excluding £78m (FFP deductions £33m plus stadium impairment £45m), the total FFP loss for 3-year monitoring period would be £55m, i.e. £6m below 2017/18 FFP limit of £61m.

For 2018/19, #AVFC parachute payment falls from £34m to £17m. If we assume no other changes and zero profit on player sales, we can see how much money Villa need to find to meet FFP limit of £39m. The shortfall is £45m, which must be made up by cuts in wage bill or player sales.

Of course, this is only an estimate, where numbers could easily change, e.g. revenue might further fall in Championship, so more money would have to be found. However, central point remains valid: #AVFC need to take action this summer to reduce losses to avoid issues with FFP.

I don’t know how accurate his info is. He seems to have included the Amavi transfer in last year’s figures, and that £45m shortfall sounds a bit.. worrying. Maybe others can verify his info, or provide their own tuppance. Kenneth Williams photo.

Gabby Terry Hutton Bunn etc wages off already is a saving. 

Sale of Gil, Hogan, Whelan etc and a few others plus renaming Villa Park should get us over the line. 

[Pimlico_Villa]

I think I might try and spend some more time understanding this given it is so prominent for us now.

My understanding at the moment (caveat, this is not a complete understanding and might be b**locks) is that what heavily impacts the loss making calculation is prior transfers, given that these are - in Accounting terms - 'Assets' that depreciate. Although this depreciation is a charge that runs through the P&L as a cost item, it doesn't actually cost us anything in cash. For example, if we sign a player for £10M on a 5 year contract, that 'Asset' represents a £2M annual 'depreciation' charge for 5 years. If you took out these charges and simply deducted the actual cash costs (salaries, mainly) I think we are modestly profitable. So, what is impacting us is previous transfers on sizeable, long term contracts.

The same, I believe, works for players that are signed for free. To calculate the depreciation charge for Micah Richards, for example, you would take the value of his contract (£2M per year for 3 years = £6M) and depreciate each year. So, for players like him you get hit twice - the depreciation charge plus his wages - i.e. £4M per year.

Perversely, this is why if we sold that same player that we bought for £10M for £8M after 3 years we would make a 'profit' as his value on the Books after year 3 would be £4M (£10M minus 3 years of £2M depreciation charges).

In terms of the Owner being able to put money in - a so called Equity injection - I think they can only do this to cover losses, not to just have a pile of cash that can be placed on our books to be spent. 

Really, the only option we have is to attract more commercial revenue. For me, the best route to doing this would be for Recon Group to do more of what they did with Bodymoor - perhaps sponsor a stand (I nominate the Doug). If we see more of this, then I think it is a good sign of Xia's financial power and backing. If we don't, then I'll be nervous about Recon's ability to fund us.