mrjc Posted May 29, 2018 Share Posted May 29, 2018 18 minutes ago, mikeyp102 said: But we haven’t seen the accounts for the second year in the championship, the ones released in March/April were for the previous financial year. I’m no accountant, and I’m sure many people have much more of an understanding of it than me. But, for me if we were going to be so close to ffp, by failing to get promotion it would’ve been suicidal to sanction the likes of Terry. Xia is no fool and would’ve known the full implications, he would not want his reputation to be tarnished by allowing the club to be in that position. Plus we don’t know how much had been given by sponsoring the training ground etc You’re right, he’s effectively estimating two years’ worth of results, so it is only an estimate. And he’ll be wrong in some of the ups and downs - but I don’t think he’ll be too far off overall. I think (can’t remember the link) that Wyness suggested we would be very close to the limit for this year. That would make sense, and would also make it clear there would be a big problem next year if we didn’t get up - so I think Terry was part of the gamble, and they genuinely believed it would be a case of securing promotion. You’re right re naming rights not being known, and there are a few other uncertainties - but given we know the big moving parts (parachute payments, allowed losses, transfers this season (ie, nothing major) and the fact we’ve only really got one big sellable asset - I can’t see the analysis being that far wrong. We’ll see I guess - I find it massively worrying though Link to comment Share on other sites More sharing options...
Popular Post omariqy Posted May 30, 2018 Popular Post Share Posted May 30, 2018 https://7500toholte.sbnation.com/platform/amp/2018/5/30/17407010/aston-villa-financial-fair-play-jack-grealish-james-chester-albert-adomah?__twitter_impression=true Quote We crunched the numbers to estimate the severity of Aston Villa’s Financial Fair Play problem We take a look at Villa’s accounts and how they stack up against Financial Fair Play requirements. By Alexander Carson on May 30, 2018 7:00 am BIRMINGHAM, ENGLAND - MAY 15: Jack Grealish of Aston Villa reacts after being fouled by Ryan Shotton of Middlesbrough as Referee Mike Dean looks on during the Sky Bet Championship Play Off Semi Final second leg match between Aston Villa and Middlesbrough at Villa Park on May 15, 2018 in Birmingham, England. Photo by Clive Mason/Getty Images Aston Villa’s failure to win promotion to the Premier League brought about an immediate concern: Financial Fair Play compliance for the 2018–19 season. In the days since, Villa supporters have gone back and forth trying to assess the magnitude of the problem — some assert that they’re sure it’s not a very big deal, while others seem to believe that Villa will have to sell the entire team this summer. What follows is an exercise in trying to use publicly available data, as well as reasonable assumptions, to get an idea of the steps Villa will need to take this summer to achieve FFP compliance. (Spoiler: Neither the aforementioned crowds are right.) Why is FFP such a big concern this season? It’s easy math: Villa’s maximum allowable loss over the three-year period decreases by £22 million at the same time that their parachute payment drops by £18 million. Please note: This is not an attempt to hit the FFP gap on the nose or to speak definitively on, well, anything — however, not knowing everything isn’t a reason to know nothing. I’ve done some research over the last couple months, and wanted to share some of the figures I’ve estimated. Again, please remember that the figures used for 2017–18 forward are estimates and that there’s probably an assumption or two in here that’s ultimately wrong. I hope you agree that small discrepancies or missed figures are going to be alright. The goal is to provide a rough idea to set expectations, and I hope you find this exercise helpful in that ende A few rules of the road before we get going: When a player is bought, his transfer fee is paid for equally over the length of the contract. For example, if a player is bought for £8 million and signs a four-year deal, the club will incur an annual amortization expense of £2 million. At the end of the first year, the player’s book value will be £6 million; after two years, £4 million; etc. When a player is sold, his incoming transfer fee is evaluated against the player’s book value, and the profit or loss is recorded on the accounts. For example, if the club sell that same player after two years, with a book value of £4 million, for a £10 million fee, the club would only record £6 million as profit. However, when a player is sold, the club also get out from any future expected amortization expense — the club would shed £2 million in expenses in the first year, then £2 million the next year. Adding the profit/loss to the decrease in amortization expense over the length of the contract gives you the benefit of the full fee. It’s notable, however, because Villa are primarily interested in passing FFP for 2018–19 and likely not as worried about 2019–20 impacts. Some expenses are excluded from FFP calculations — namely academy, community and infrastructure expenses. These costs were right around £11 million for the 2016–17 season. That would also mean that if Villa wanted to redevelop the North Stand, as has been floated as an idea for many years now, the costs they incurred would not count against FFP. Similarly, when Villa impaired the cost of Villa Park on their books in 2015–16, it didn’t count against their FFP books. This is how Villa’s £81 million loss that year only gets recorded as a £25 million or £30 million loss for FFP purposes. And some rules I’m implementing in my analysis: The club’s financial accounts for the 2016–17 season are published and easily made available. We will use those figures to inform our calculations for that season, and use the same figures to inform our estimates for 2017–18 and 2018–19. I’m going to vary four figures over the course of the analysis: turnover/revenue from parachute payments, wage expense, profit on player sale, amortization expense. We know the structure of the parachute payments, and we know the transfer business Villa have done. While there will still be guesswork involved, we should be able to get a pretty good ballpark estimate on all these figures. Transfermarkt values will be used for transfer fees. Everything else is going to be held constant. While I expect some small variations here and there, the club’s matchday income, as well as sponsorship income, is likely to be roughly the same. Ditto for the club’s other expenses. Remember that the goal of this exercise is not to give an exact figure, rather to give an educated estimate that should inform our expectations of summer business as supporters. With that done, let’s dive in. Keep in mind that the maximum available loss for the three year period running from the 2016–17 campaign through 2018–19 is £39 million. 2016–17 accounts This is the easy one. Villa reported a £14.5 million loss for 2016–17, but had ~£11 million in expenses that can be excluded from FFP calculations. Thus, we estimate that Villa had an FFP loss of £3.5 million for the 2016–17 season. 2017–18 estimates This is where things get a little tougher. First and foremost, we’ll decrease turnover/revenue by £8 million to account for the drop in parachute payments from £41 million to £33 million. Wages are next, and they’re a little tricky, because it’s difficult to understand the wage agreement used in loan deals (and Villa have some big-money loans both ways). For example, Villa paid 70% (£42,000/week) of Robert Snodgrass’ wages this year, while West Ham paid the remaining 30%. Villa had a number of loanees in the last two years going both ways, and the particulars mean this is an amount that could be a little fuzzy. That said, I think Villa’s wage bill increased for 2017–18, if for no other reason than they paid John Terry £60,000/week and Snodgrass £42,000/week. I’m going to increase the wage bill by £3.5 million for this season, moving it from £61.5 million to £65 million. The next consideration is profit from player sales. Villa sold the following players in the last 12 months (remember, all values are from Transfermarkt): Jordan Veretout was sold for £6.3 million, against a book value of £5.4 million. The profit on his sale was £900,000. Nathan Baker was sold for £3.9 million. As he was an academy graduate, he had no book value as no fee was required to sign him. The profit on his sale was the full £3.9 million. Carlos Sánchez was sold for £2.7 million, against a book value of £1.35 million. The profit on his sale was £1.35 million. Leandro Bacuna was sold for £1.35 million, against a book value of £168,000. The profit on his sale was £1.18 million. Aly Cissokho was sold for £1.3 million, against a book value of £563,000. The profit on his sale was £737,000. Altogether, on five player sales, Villa brought in around £8.1 million in profit. This is an £18.5 million decrease from the previous year, when Villa had profit of £26.6 million on player sales. So far, we’ve had three categories, and three places where Villa’s loss grew. That’s not the case on player amortization, though. Villa got out from the following amortization expenses between 2016–17 and 2017–18 for a total of £5.6 million: Jordan Veretout: £1.8 million Carlos Sánchez: £1.35 million Leandro Bacuna: £84,000 Libor Kozák: £1.46 million Aly Cissokho: £563,000 Alan Hutton: £334,000* *Note: Villa get out from Hutton’s amortization expense as he was handed a one-year contract extension last year, “after” his book value was reduced to £0. However, Villa also paid transfer fees for Glenn Whelan and Ahmed Elmohamady. Whelan was bought for £1.53 million and signed to a 2-year deal, making his amortization expense £765,000 Elmohamady was bought for £990,000 and signed to a 3-year deal, making his amortization expense £330,000 Net, I’ve estimated that Villa’s player amortization expense dropped by £4.5 million, from £23.7 million to £19.2 million. Putting it all together, we take last season’s £3.5 million loss and… Increase it by £8 million due to the decrease in parachute payments. Increase it by £3.5 million due to the estimated increase in wage. Increase it by £18.5 million due to the decrease in profit on player sales. Decrease it by £4.5 million due to the decrease in amortization expense. …which means that I’ve estimated Villa’s 2017–18 FFP loss to be £29 million. This runs Villa’s total loss over the two years to £32.5 million, which only leaves a maximum allowable loss of £6.5 million for the 2018–19 season. Note: I’m counting Jordan Amavi’s transfer to Marseille under the 2018–19 figures, but it doesn’t make a difference at all right now. 2018–19 season If you reset the profit on players sales to £0 and decrease parachute payments from £33 million to £15 million, Villa would be set for a loss of around £55 million, which is significantly more than the £6.5 million. Correspondingly, the club would need to make moves to make up a £48.5 million gap, which sounds really dire. The reality isn’t as bad, though. When the final whistle blew in the play-off final, Villa took an immediate step toward FFP compliance, as millions of pounds flew off the wage bill. John Terry’s £3 million in wages are now gone, as are the £2.1 million Villa paid Robert Snodgrass this season. The same holds true for the big wages Gabby Agbonlahor and Alan Hutton were on, as well as the other players that have left the club. All in all, I’m estimating that Villa have already dropped the wage bill by around £13 million. Additionally, three players have already left the club: Carles Gil, Pierluigi Gollini and Jordan Amavi will all seen their loan moves go permanent this summer. Villa get the following profits on player sales: Amavi will be sold for £7.2 million, against a book value of £3.96 million, for a profit of £3.24 million. Gil will be sold for £1.7 million, against a book value of £840,000, for a profit of £860,000. It appears Gollini will be sold for £3 million, against a book value of £2.25 million, for a profit of £750,000. Put it all together, and Villa have already arranged for £4.85 million in profit on player sales. Similarly, Villa have already decreased their amortization expense for next year by the following amounts: Jordan Amavi: £1.98 million Carles Gil: £840,000 Pierluigi Gollini: £1.13 million In all, Villa have already decreased their expected amortization expense for next year by around £3.95 million. Factoring all this in, I’d estimate that Villa’s remaining FFP gap is somewhere between £25 million and £30 million (though it could certainly be a few million in either direction as well). Conclusions All things considered, if that’s all the club have to make up from this point, it’s not an awful position to be in, especially considering the club could have sell-on fees coming from Adama Traoré and Jordan Veretout transfers. However, I think it will be hard for the club to achieve FFP compliance without selling at least a couple players that would be expected starting XI members next season. It’s one thing to say Villa should offload fringe guys like Aaron Tshibola, Ross McCormack, Gary Gardner or even Henri Lansbury, but it’s another thing to actually find clubs that want to buy them for enough money to make a difference. In my opinion, the biggest takeaway is that I don’t think Villa need to sell Jack Grealish. They might choose to sell him for a number of different reasons, but the club should have different options, with a chance to sell a handful of Albert Adomah, James Chester, Scott Hogan, Conor Hourihane and Jonathan Kodjia to clear the gap instead. Villa have choices and options, and I trust that the club knows how it wants to proceed. Keith Wyness has known this possibility has coming for a while now — fingers crossed that their path forward is one that secures the long-term stability and future of this great football club. 11 1 Link to comment Share on other sites More sharing options...
Mark Albrighton Posted May 30, 2018 VT Supporter Share Posted May 30, 2018 No mention of the chocolate biscuits for the directors then. 1 Link to comment Share on other sites More sharing options...
hippo Posted May 30, 2018 Share Posted May 30, 2018 So the FFP gap is somewhere between £25 -£40m seems to be the two ends of the scale. To offset that I will renewing my season ticket approx £550 - and I lost my peak cap at Wembley , so theirs another £16 going in the coffers early August ! 2 1 Link to comment Share on other sites More sharing options...
spiezels Posted May 30, 2018 Share Posted May 30, 2018 Thanks for that write up! Get some of the dead wood out. Keep Chester/Jacky, Get Davies, RHM, O’Hare on the bench and another few strong loans. 2 Link to comment Share on other sites More sharing options...
rodders0223 Posted May 30, 2018 Share Posted May 30, 2018 Sounds grim. Plan of action : 1. Start selling meth to increase profit. 2. Pimp out the players. 3. Break the deadwood's legs to claim on the insurance. 1 Link to comment Share on other sites More sharing options...
KSV Posted May 30, 2018 Share Posted May 30, 2018 Has anyone factored in the Recon Training Complex. We dont know how much money that has brought in. Plus any stadium rights.. new shirt sponsors etc? 3 Link to comment Share on other sites More sharing options...
tom_avfc Posted May 30, 2018 Share Posted May 30, 2018 4 minutes ago, KSV said: Has anyone factored in the Recon Training Complex. We dont know how much money that has brought in. Plus any stadium rights.. new shirt sponsors etc? Yeah I think it's fair to say that a lot hasn't been factored in to these projections. In reality, nobody who is not involved with the club can know the true ramifications of not getting promoted. There'll be cost cutting no doubt but its difficult to know how severe it'll be without knowing all of the facts. Link to comment Share on other sites More sharing options...
omariqy Posted May 30, 2018 Share Posted May 30, 2018 Anyway we can sign up Terry as an academy coach and play him? Link to comment Share on other sites More sharing options...
Tomaszk Posted May 30, 2018 Share Posted May 30, 2018 34 minutes ago, KSV said: Has anyone factored in the Recon Training Complex. We dont know how much money that has brought in. Plus any stadium rights.. new shirt sponsors etc? Hopefully £1.8bn a season. 1 Link to comment Share on other sites More sharing options...
hippo Posted May 30, 2018 Share Posted May 30, 2018 Why don't they do a limited edition run of baseball caps and sell them at £1m each . if we sell 40 we are sorted ! 2 Link to comment Share on other sites More sharing options...
sidcow Posted May 30, 2018 VT Supporter Share Posted May 30, 2018 The more I look at it the more it seems selling Jack is the only answer. Definitely going to have the rename Villa Park I reckon and we are going to have to swallow it. 1 Link to comment Share on other sites More sharing options...
hippo Posted May 30, 2018 Share Posted May 30, 2018 7 minutes ago, sidcow said: The more I look at it the more it seems selling Jack is the only answer. Definitely going to have the rename Villa Park I reckon and we are going to have to swallow it. Lotus villa park would be ok with for £10m - but bear in mind that though the naming deals have a big headline figure - its usually over about 10 years - so it isn't actually that much. Link to comment Share on other sites More sharing options...
thunderball Posted May 30, 2018 Share Posted May 30, 2018 (edited) Urgh, this is the start of the slippery slope. Obviously Huddersfield, Brighton, Bournemouth etc got promoted the right way and sensibly. This is now our only choice but with such a squad overhaul its going to be a while to stand a chance - all last season's work counts for nothing when the back bone of the team is removed, you start over building on whats left. On the flip side, this is what should have happened in the first place, its the sensible thing to do and the right thing to do, and there is evidence that this can and does happen. But on the negative side, all the teams coming down from now on will have two years of much larger parachute payments due to the new Sky deal exaggerating their FFP differential, further distancing themselves from the rest of us in the Championship. Serves us right. A decent serving of humble pie is what the club needs, we have been mismanaged for so long now we need a root and branch overhaul and regain an identity rather arrogance thinking we have a right because we were once a big club. Football has moved on and dinosaurs face extinction. Edited May 30, 2018 by thunderball 1 Link to comment Share on other sites More sharing options...
jjaacckk91 Posted May 30, 2018 Share Posted May 30, 2018 Decent write up that, and whilst I understand the maths behind it can anyone explain the financial benefits of using amortized player values over the full contract length, rather than a strict money in Vs money out over that 12 month period. I know players are technically assets, but it just seems to make a situation like ours worse, as they are behaving like liabilities on the books unless sold. Link to comment Share on other sites More sharing options...
GodsBarkeep Posted May 30, 2018 Share Posted May 30, 2018 I wonder how much of that could the club write off if we all pledge to buy 2 balti pies each per game next season Link to comment Share on other sites More sharing options...
Demitri_C Posted May 30, 2018 Share Posted May 30, 2018 At least the expectations which wont be as high next year which might actually suit us. Link to comment Share on other sites More sharing options...
Nabby Posted May 30, 2018 Share Posted May 30, 2018 1 hour ago, hippo said: Why don't they do a limited edition run of baseball caps and sell them at £1m each . if we sell 40 we are sorted ! Interesting idea , the owner can't put cash in but say the club said we are going to fail FFP but if we can sell x amount of Villa Cap to Y amount of fans this will offset it and if this was achieved would this breach the rules ..its still income after all. Link to comment Share on other sites More sharing options...
JAMAICAN-VILLAN Posted May 30, 2018 Share Posted May 30, 2018 4 hours ago, spiezels said: Thanks for that write up! Get some of the dead wood out. Keep Chester/Jacky, Get Davies, RHM, O’Hare on the bench and another few strong loans. Agreed, keep our spine, promote a few youngsters, and get some strong loans in as you say. I'd maybe even be willing to sacrifice Adomah and pray Green can be both fit, AND come good. Sounds like shite but could be a blessing, some of us have wanted our best youngsters integrated for a while. Add to that we still don't know the full extent of what Xia will be trying to do to bring it cash. It's a setback but i'm not convinced we are doomed yet. 2 Link to comment Share on other sites More sharing options...
gilbertoAVFC Posted May 30, 2018 Share Posted May 30, 2018 21 minutes ago, Demitri_C said: At least the expectations which wont be as high next year which might actually suit us. Can't really see this impacting expectations tbh. We'll just have a lower quality squad, most fans in the ground won't give a toss and will undoubtedly complain when we don't win. Link to comment Share on other sites More sharing options...
Recommended Posts