The AVFC FFP thread

[CVByrne]

20 minutes ago, kidlewis said:

So essentially we do need a net £50 out on player transfers even after the deductions have been taken into consideration? 
 

or do we need to get £50m in sales plus then deductions taken off give us much more for players?

We don't need to sell and make profit, we want to sell and make profit so we can buy new players. 

[ender4]

2 hours ago, Czarnikjak said:

Is that really spelled out in the Premier league rulebook? Or you just assuming that it is as it makes sense?

I meant with UK accounting rules which I assume even the PL has to follow because each club is also a limited company.  
 

But now I think about it further, I guess the PL can have different rules to calculate PSR even if in the official company accounts it’s shown correctly. 

[Czarnikjak]

23 minutes ago, ender4 said:

I meant with UK accounting rules which I assume even the PL has to follow because each club is also a limited company.  
 

But now I think about it further, I guess the PL can have different rules to calculate PSR even if in the official company accounts it’s shown correctly. 

OK, I'm not an accountant but I don't think there's anything wrong with the below scenario:

Our accounting period was extended to 30th June, but sale of season tickets for 24/25 starts as usual on 1st of June which is now still in this accounting period.What stops us from booking this revenue in this accounting period? The product is sold now, does it matter when it's "consumed"?

If this is allowed, we could add this June's revenue to last June's season ticket revenue thus giving us an one off boost for PSR purposes.

[Adam2003]

3 minutes ago, NurembergVillan said:

Bonkers that you're effectively punished for not selling homegrown players but hey, modern football.

It’s a whole separate topic but you’re absolutely right this is the great unanticipated consequence of FFP. Same with Chelsea looking to sell Gallagher, etc. It’s way better to sell a homegrown player for £10m and sign someone else for £10m than stick with your homegrown player. No-one intended that and they need to fix it - it’s one of those things that happens when accountancy is applied to real life!

[NurembergVillan]

2 minutes ago, Adam2003 said:

It’s a whole separate topic but you’re absolutely right this is the great unanticipated consequence of FFP. Same with Chelsea looking to sell Gallagher, etc. It’s way better to sell a homegrown player for £10m and sign someone else for £10m than stick with your homegrown player. No-one intended that and they need to fix it - it’s one of those things that happens when accountancy is applied to real life!

Two things that terrify me - accountancy and real life.

[Made In Aston]

1 hour ago, MaVilla said:

if im understanding it correctly, it was a permanent transfer if they stayed up, but a glorified loan if they didnt.

I believe it was as follows (roughly):

1) 10m up front

2) 8m if they stayed up and making the deal permanent (18m total).

3) If they didnt stay up, we resign for something like 8m.

4) if 3 happens, thats effectively a season loan, where they paid 2m.

 

......or something like that.

 

edit: what @useless said sounds about right, so in that scenario we got 4m in the first instalment, then maybe we have paid 2m to get him back, with us taking a profit of 2m (loan fee), or such.

Possibly a FFP loophole. When archer was sold the whole transfer fee was treated as immediate income. The buyback is amortised so the fee is spread over the length of the contact. It's smart business as we effectively get a loan fee, experience for the player and a positive net value for ffp.

[Czarnikjak]

11 minutes ago, Made In Aston said:

Possibly a FFP loophole. When archer was sold the whole transfer fee was treated as immediate income. The buyback is amortised so the fee is spread over the length of the contact. It's smart business as we effectively get a loan fee, experience for the player and a positive net value for ffp.

This is not a loophole. This is precisely how accounting works in football.

[Made In Aston]

14 minutes ago, Czarnikjak said:

This is not a loophole. This is precisely how accounting works in football.

Its not in the spirit of the rules and the club is exploiting them, like chelsea's 8 year contracts. The rules are not tight enough to stop it, so i'd say it was a loophole. But let's not get into semantics. Someone asked why we would make such a deal, as it didn't make sense, and I was explaining what the benefit was. 

Edited May 18 by Made In Aston

[HanoiVillan]

55 minutes ago, Made In Aston said:

Its not in the spirit of the rules and the club is exploiting them, like chelsea's 8 year contracts. The rules are not tight enough to stop it, so i'd say it was a loophole. But let's not get into semantics. Someone asked why we would make such a deal, as it didn't make sense, and I was explaining what the benefit was. 

I don't understand what you mean by 'it's not in the spirit of the rules'. 

[Adam2003]

2 hours ago, HanoiVillan said:

I don't understand what you mean by 'it's not in the spirit of the rules'. 

I do - the rules were intended (leaving aside the whole “keep the established clubs in place” angle) to keep spending sensible, make clubs more sustainable, etc - and you would expect that to naturally include prioritising homegrown players (hence spending on youth teams not counting). However, the rules have ended up meaning it makes sense to sell homegrown players. That was an unintended consequence.

That’s not Villa’s fault - the authorities need to fix the rules - but I definitely get the point on the ‘spirit’ of the rules - or the ‘intention of the rules’ perhaps. We now have a weird situation where every PL club would be better off in the short-term selling a homegrown player who’ll never make the team to another PL club for £100m and buying one of their castoffs for the same amount in return. That can’t be sensible.

[HanoiVillan]

2 hours ago, Adam2003 said:

I do - the rules were intended (leaving aside the whole “keep the established clubs in place” angle) to keep spending sensible, make clubs more sustainable, etc - and you would expect that to naturally include prioritising homegrown players (hence spending on youth teams not counting). However, the rules have ended up meaning it makes sense to sell homegrown players. That was an unintended consequence.

That’s not Villa’s fault - the authorities need to fix the rules - but I definitely get the point on the ‘spirit’ of the rules - or the ‘intention of the rules’ perhaps. We now have a weird situation where every PL club would be better off in the short-term selling a homegrown player who’ll never make the team to another PL club for £100m and buying one of their castoffs for the same amount in return. That can’t be sensible.

That's a different point, though (one I agree with). I agree that needing to sell academy products is an 'unintended consequence' of the rules, but 'not in the spirit of the rules' is way of calling something unsporting or morally dubious, and I can't understand why anyone would consider Archer's transfer in that way. 

[paul514]

With Chelsea 'selling' their training ground it would make no sense that we don't do the same when NSWE inevitably put money into us in the summer.

For anyone who doesn't understand, NSWE usually put money into the club using the share method which does nothing for FFP. 

If they buy the training ground off themselves then it counts as 'pure profit', may as well do it before they ban clubs doing it.

[allani]

27 minutes ago, paul514 said:

With Chelsea 'selling' their training ground it would make no sense that we don't do the same when NSWE inevitably put money into us in the summer.

For anyone who doesn't understand, NSWE usually put money into the club using the share method which does nothing for FFP. 

If they buy the training ground off themselves then it counts as 'pure profit', may as well do it before they ban clubs doing it.

Would it be more ethical to sell it to Atairos or even Comcast?

[Czarnikjak]

7 minutes ago, allani said:

Would it be more ethical to sell it to Atairos or even Comcast?

Ethical? Are you serious?

[allani]

6 minutes ago, Czarnikjak said:

Ethical? Are you serious?

Not really.  (Sorry I should have probably made it more obvious that the word ethical in my previous post was heavily, heavily stressed.) 

But it is more ethical (i.e. still not very ethical at all) for Comcast (an as yet outside party) to buy it from NSWE than it is for NSWE to sell it to themselves. 

Edited May 22 by allani

[Czarnikjak]

2 minutes ago, allani said:

Not really.  (Sorry I should have probably made it more obvious that the word ethical in my previous post was heavily, heavily stressed.) 

But it is more ethical (i.e. still not very ethical at all) for Comcast (an as yet outside party) to buy it from NSWE than it is for NSWE to sell it to themselves. 

Maybe, but we shouldn't sell it to Comcast (not that they would ever want to buy it in the first place ). If they ever fall out with NSWE we would end up without a training ground!

Let's just sell it to NSWE and be done with it.

[allani]

43 minutes ago, paul514 said:

With Chelsea 'selling' their training ground it would make no sense that we don't do the same when NSWE inevitably put money into us in the summer.

For anyone who doesn't understand, NSWE usually put money into the club using the share method which does nothing for FFP. 

If they buy the training ground off themselves then it counts as 'pure profit', may as well do it before they ban clubs doing it.

It will be interesting to see whether the FA ban clubs from doing it or whether actually this is something that HMRC become interested in.  For example, it is my understanding that it is very difficult to sell property / assets in Italy to people / companies that have a mutual interest / connection - as this was a technique used for a long time by the Mafia to launder cash.  You sell a fallen down barn worth €500 to your Uncle Vito for €500,000 and that's suddenly a lot of clean, fresh bills in your pocket.

[allani]

2 minutes ago, Czarnikjak said:

Maybe, but we shouldn't sell it to Comcast (not that they would ever want to buy it in the first place ). If they ever fall out with NSWE we would end up without a training ground!

Let's just sell it to NSWE and be done with it.

I agree.  I don't think we should sell our training ground to anyone.  Selling it to yourself seems dangerously close to fraud / money laundering to me (see above post).  My worry is that then you don't have the FA / PL breathing down your neck but actually criminal lawyers.  I mean basically the only reason Chelsea are doing it is to cheat (defraud?) the system.

[Czarnikjak]

4 minutes ago, allani said:

It will be interesting to see whether the FA ban clubs from doing it or whether actually this is something that HMRC become interested in.  For example, it is my understanding that it is very difficult to sell property / assets in Italy to people / companies that have a mutual interest / connection - as this was a technique used for a long time by the Mafia to launder cash.  You sell a fallen down barn worth €500 to your Uncle Vito for €500,000 and that's suddenly a lot of clean, fresh bills in your pocket.

This practice is already completely banned in football league by the FA.

Premier League still allows it, but the transaction is subject to fair market value check.

[paul514]

21 minutes ago, allani said:

It will be interesting to see whether the FA ban clubs from doing it or whether actually this is something that HMRC become interested in.  For example, it is my understanding that it is very difficult to sell property / assets in Italy to people / companies that have a mutual interest / connection - as this was a technique used for a long time by the Mafia to launder cash.  You sell a fallen down barn worth €500 to your Uncle Vito for €500,000 and that's suddenly a lot of clean, fresh bills in your pocket.

We could make them an offer they can't refuse