The AVFC FFP / PSR / SCR thread

[blandy]

3 hours ago, Czarnikjak said:

No Blandy, profit from player sales will still count towards the revenue/cost calculations (averaged from last 3 seasons). So selling youth won't stop.

Also the 70% rule is more restrictive in our case than the £105m allowable loss.

And final nail in the coffin, the anchoring to the multiples of the poorest club has not been voted through yet, so it might not happen at all.

Overall, there's nothing in this new rules that benefit us really.

I think your no is too forceful.

of course player sales receipts count, still. And yes the 70% is onerous. But that’s not the point I’m making. I’m not talking about what benefits us so much as trying to get across that (simplistically) a change to “you can spend 70% of what you earn, on player costs” is very different from “this is the maximum amount you can lose”. It will still be restrictive, we’re still at a disadvantage compared to some other clubs and doing better than others. It’s less bad generically and also ultimately as applied to our situation.

[MrBlack]

Assume we boost our revenues another £50m courtesy of champions league football,  where abouts would that leave us on the scr with our current squad?  Surely it's putting us way into safe territory having also boosted them by £50m last season too?

I worry whether these are sustainable increases without champions league football, but hopefully some form of revision to the rule gets passed before we have to worry about that.

[CVByrne]

7 hours ago, blandy said:

I think your no is too forceful.

of course player sales receipts count, still. And yes the 70% is onerous. But that’s not the point I’m making. I’m not talking about what benefits us so much as trying to get across that (simplistically) a change to “you can spend 70% of what you earn, on player costs” is very different from “this is the maximum amount you can lose”. It will still be restrictive, we’re still at a disadvantage compared to some other clubs and doing better than others. It’s less bad generically and also ultimately as applied to our situation.

The benefit of the squad cost rule is it's based on your current squad cost. Past cost and past issues aren't a hinderance in the way a backwards looking PSR is. So losses based on lack of revenue in the past is a weight on our necks now. Under squad cost rule if we can keep booking some profit from player sales and grow the income, add to that have players salaries performance based (ie share of income from competitions and league placings) it's a more sustainable way for us. 

Player trading will remain a key part, but since it only becomes part of a 3 year pool and pro-rata to 1 year. Which is then added to current income and measured against current squad cost then it's a different method. Selling a player like Diaby has a double effect to the ratio, the profit from the sale (£20m) and the saved wages + amort + add ons triggered (say £16m). 

What it will do is skew average squad age younger because those players are on lower wages and have sell on values. More older players will move for smaller fees or on free transfers so they only take up wages not amortisation. Also key players can stay a long time because once the fee is amortised down they become cheaper cost to club on a contract renewal as the increased wages will be lower than their amortisation reduction. 

Say a player who signed for £40m and was on wages of £5m per season. Annual squad cost is £13m. After 3 years the player is given new 5 year contract and a pay rise lets say it's a big rise to £6.8m their amortisation drops to £3.2m so their squad cost is now £10m. This is why the strategy is skew young players who may have high fees but will have low wages, then contract renewal is higher wages but amortisation is low. 

[cheltenham_villa]

The part that has confused me about yesterdays statement is I believe SCR to be less restrictive than PSR. So why did the Luiz sale not satisfy SCR alone, why was it necessary for Diaby to leave as well. 

To me it infers that SCR will be tougher for us to comply with. Anyone able to break it down?

[OutByEaster?]

How do losses relate to SCR?

I thought it was based entirely on a (current) income to wage ratio.

 

[MaVilla]

8 minutes ago, cheltenham_villa said:

The part that has confused me about yesterdays statement is I believe SCR to be less restrictive than PSR. So why did the Luiz sale not satisfy SCR alone, why was it necessary for Diaby to leave as well. 

To me it infers that SCR will be tougher for us to comply with. Anyone able to break it down?

 

UEFA squad cost rules are totally seperate to PSR.

PSR relates to PL teams in the domestic competition and is the profit/loss thing.

SCR only applies for clubs in a european competition, and if you are in a european competition, you have to comply with the squad cost rule, which means your wage % cannot be more than 70% of your revenue.

example, we could have sold Kellyman for 100m, which would have been great for PSR, but if he was only on £2k p/w, that would make virtually no difference to the club wage % to revenue.

So we had to effectively sell players for both good money, but also move some big wages off the books (Diaby), to reduce our wage to revenue percentage.

 

its all a mess tbh, all these different rules is a bit of a joke.

[CVByrne]

4 minutes ago, OutByEaster? said:

How do losses relate to SCR?

I thought it was based entirely on a (current) income to wage ratio.

They don't form part of the Squad Cost Rule the way they did (after adjustments) for PSR. 

We have a club income lets say we get to £340m for the season, Heck has done great and team made it to round of 16 in CL. We then add to that all profit on player sales. As of now that's £22m + £102m + £20m = £144m and that pro rata to 1 year = 144 /3 = £48m. This is now added to our income to give us £388m that is the denominator of the squad cost calculation.

Now we calculate the numerator, the squad cost part. So this is all player wages + amortisation + agent fees + head coach wages = £310m. Then squad cost ratio is 310 / 388 = 79.8% 

It's the double impact of lowering the wages + amortisation while boosting the profit on player sales means you get a double effect. Hence what Vidagani said about Diaby.

[MrBlack]

1 hour ago, CVByrne said:

They don't form part of the Squad Cost Rule the way they did (after adjustments) for PSR. 

We have a club income lets say we get to £340m for the season, Heck has done great and team made it to round of 16 in CL. We then add to that all profit on player sales. As of now that's £22m + £102m + £20m = £144m and that pro rata to 1 year = 144 /3 = £48m. This is now added to our income to give us £388m that is the denominator of the squad cost calculation.

Now we calculate the numerator, the squad cost part. So this is all player wages + amortisation + agent fees + head coach wages = £310m. Then squad cost ratio is 310 / 388 = 79.8% 

It's the double impact of lowering the wages + amortisation while boosting the profit on player sales means you get a double effect. Hence what Vidagani said about Diaby.

Amortisation is where previous years purchases start to bite in the SCR world. So we do still have to consider previous spends when we look at what we're doing.

Does Extending contracts (a la Chelsea) restarts the amortisation like it used to or is it still capped to 5 years from purchase date regardless how long many times you renew the contract?

[CVByrne]

25 minutes ago, MrBlack said:

Amortisation is where previous years purchases start to bite in the SCR world. So we do still have to consider previous spends when we look at what we're doing.

Does Extending contracts (a la Chelsea) restarts the amortisation like it used to or is it still capped to 5 years from purchase date regardless how long many times you renew the contract?

It is capped at 5 years but yes the remaining book value is them amortised over 5 years. 

So Palmer joined Chelsea for 40m and he is amortised at 8m per year. His remaining book value now is £32m and he signed a new contract so his amortisation is now £6.4m per year

[MrBlack]

7 minutes ago, CVByrne said:

It is capped at 5 years but yes the remaining book value is them amortised over 5 years. 

So Palmer joined Chelsea for 40m and he is amortised at 8m per year. His remaining book value now is £32m and he signed a new contract so his amortisation is now £6.4m per year

So still a level of trickery we can perform to reduce SCR at short notice. 

But a lot of our first team are on negligible levels of amortisation now anyway.

You also presumably increase the wage in doing the extension so far from a magic bullet. And in Chelsea's case those 7 year contracts are going to start biting in a few years time.

[ender4]

1 hour ago, MrBlack said:

But a lot of our first team are on negligible levels of amortisation now anyway.

A few chunky ones (annual amounts):

Torres - £6.4m

Carlos - £6.5m

Digne - £5.6m

Maatsen - £7.5m

Onana - £10m

Buendia - £6m

Moreno - £3.8m

Coutinho - £4.25m (even though loaned out, we are paying the amortisation plus some wages).

[picicata]

9 minutes ago, ender4 said:

A few chunky ones (annual amounts):

Torres - £6.4m

Carlos - £6.5m

Digne - £5.6m

Maatsen - £7.5m

Onana - £10m

Buendia - £6m

Moreno - £3.8m

Coutinho - £4.25m (even though loaned out, we are paying the amortisation plus some wages).

Out of interest, what happens when we extend a contract? For example, if we were to sign Torres up to a couple more years would the remaining amortisation be spread equally across all those years of his new contract or does it run the same to the end of the original contract and the new years are amortisation free?

[ender4]

20 minutes ago, picicata said:

Out of interest, what happens when we extend a contract? For example, if we were to sign Torres up to a couple more years would the remaining amortisation be spread equally across all those years of his new contract or does it run the same to the end of the original contract and the new years are amortisation free?

Yes the remaining book value would get split across the years of the new contract.

So for example Mings started with an annual amortisation of £6m per year, then new contract at start of 21/22 lowered his annual amortisation to £5m per year, then new contract at start of 22/23 lowered his annual amortisation to £2.1m per year.

[david-avfc]

5 hours ago, CVByrne said:

The benefit of the squad cost rule is it's based on your current squad cost. Past cost and past issues aren't a hinderance in the way a backwards looking PSR is. So losses based on lack of revenue in the past is a weight on our necks now. Under squad cost rule if we can keep booking some profit from player sales and grow the income, add to that have players salaries performance based (ie share of income from competitions and league placings) it's a more sustainable way for us. 

Player trading will remain a key part, but since it only becomes part of a 3 year pool and pro-rata to 1 year. Which is then added to current income and measured against current squad cost then it's a different method. Selling a player like Diaby has a double effect to the ratio, the profit from the sale (£20m) and the saved wages + amort + add ons triggered (say £16m). 

What it will do is skew average squad age younger because those players are on lower wages and have sell on values. More older players will move for smaller fees or on free transfers so they only take up wages not amortisation. Also key players can stay a long time because once the fee is amortised down they become cheaper cost to club on a contract renewal as the increased wages will be lower than their amortisation reduction. 

Say a player who signed for £40m and was on wages of £5m per season. Annual squad cost is £13m. After 3 years the player is given new 5 year contract and a pay rise lets say it's a big rise to £6.8m their amortisation drops to £3.2m so their squad cost is now £10m. This is why the strategy is skew young players who may have high fees but will have low wages, then contract renewal is higher wages but amortisation is low. 

It is basically the same concept just calculated in a slightly differently way, ultimately the profit / loss incurred by each team under PSR is mostly derived from the underlying squad cost anyway so you’re just substituting an absolute number (£105m) for a % instead (70%). I’m sure there will be some idiosyncrasies which will alter things around the margins but it’s not some huge fundamental shift, the stuff you mention in your Diaby example for squad cost ratio - wages, amortisation, trading profit, are the same numbers used in PSR calculations so I don’t get why anyone is expecting a difference 

[ender4]

7 minutes ago, david-avfc said:

It is basically the same concept just calculated in a slightly differently way, ultimately the profit / loss incurred by each team under PSR is mostly derived from the underlying squad cost anyway so you’re just substituting an absolute number (£105m) for a % instead (70%). I’m sure there will be some idiosyncrasies which will alter things around the margins but it’s not some huge fundamental shift, the stuff you mention in your Diaby example for squad cost ratio - wages, amortisation, trading profit, are the same numbers used in PSR calculations so I don’t get why anyone is expecting a difference 

Yeah it's basically the same, but a bit tighter because of lowering it to 70%.

[Don_Simon]

2 minutes ago, Zatman said:

That was this window.

Apparently we need to make another big sale next summer according to the PSR experts

From the interview with Monchi & Vidagany...

"On… if Villa will have PSR issues next year and selling players

Vidagany: “No, this season is the last one with PSR as it is."

Hopefully this summer was the last one.

[TDR V2]

1 hour ago, LondonLax said:

A lengthy interview with Monchi and Vidagany where they set out how close we came to a points deduction and why Diaby had to go. 

https://www.birminghammail.co.uk/sport/football/transfer-news/inside-aston-villas-summer-transfer-29856549

Jesus what a shitshow PSR and SCR are.. 

We are in good hands I think, we may need to sell good players but they will always be replaced

[jamodillo]

Just now, Jareth said:

Monchi and co are an absolute class act. Imagine what they can do next summer when coffers should be swelled and no PSR issues. 

SCR issues up next which will stop us from bringing in highly paid players and improving existing players contracts. However it will help us to promote youth and scouted players without needing to sell them.

I think the drop from 90% to 70% SCR will hit us quite hard next summer.

[The_Steve]

6 minutes ago, jamodillo said:

SCR issues up next which will stop us from bringing in highly paid players and improving existing players contracts. However it will help us to promote youth and scouted players without needing to sell them.

I think the drop from 90% to 70% SCR will hit us quite hard next summer.

SCR is 80% this year and 70% after that - 90% was last season. Both that and PSR are the biggest farces in football. But we have the best custodians and brains on and off of the pitch that will keep us fighting and competitive. 

Edited September 4 by The_Steve

[The_Steve]

The interview all but confirms that Spurs did try to low ball us with £20m and Lo Celso for JJ knowing our PSR issues at the time. Another reason to hate them.