Villa's finances and FFP

[Mr Popodopolous]

I'll post a little more constructively. Aston Villa I have criticised but they seem to have good owners.

Further, Dean Smith I critiqued going into lockdown a year ago as a decent manager but issues from Brentford in terms of organising a defence successfully. That seems to have changed post lockdown.

Would also add that some of their players signed in Year 1 seem to have developed and improved in Year 2. May well have happened had Fulham stayed up in 2018/19, as both did buy in bulk somewhat. Can take a while.

[Mr Popodopolous]

In terms of Parachute Payments, I'll address points by both @AnAstonVillafan and @Blockb

Think there is a good case for them from a solvency POV, as there is a TV money based chasm between the two divisions, but at the same time they can have a significant impact in terms of the competitive balance and yoyo effect at this level. 

My starting point for a solution if FFP stays in place, and I think the enforcement in the PL needs to be as watertight as it can be at EFL level, I also think the fixed asset loophole needs shutting as well as using the Projected Accounts as strongly as they should be.

What I mean is that if a club are over in March/April they get docked points based on the tariff for overspend as Birmingham got set in 2018/19. None of this "We can sort it in the Summer" unless a club actually has contractual evidence, a paper trail showing that a deal lined up, eg a player will be sold by the end of Reporting Period or that players will be sold to get back into balance.

Parachute Payments. My starting point for a solution is to pay them but as loans, albeit not necessarily repayable loans and certainly not with Interest.

You can meet obligations, payables, tax, transfer instalments. However they won't go through the Profit and Loss- the Profit and Loss is a basis of P&S. This will oblige clubs to cut back more quickly unless they're coming down in a really good position, and inhibit them from strengthening unless they get real top dollar for player sales- if they do they'll be able to reinvest less of a % than with Parachute Payments.

Competitive balance improved, stability increased.

[Toblerone boot]

9 minutes ago, Mr Popodopolous said:

In terms of Parachute Payments, I'll address points by both @AnAstonVillafan and @Blockb

Think there is a good case for them from a solvency POV, as there is a TV money based chasm between the two divisions, but at the same time they can have a significant impact in terms of the competitive balance and yoyo effect at this level. 

My starting point for a solution if FFP stays in place, and I think the enforcement in the PL needs to be as watertight as it can be at EFL level, I also think the fixed asset loophole needs shutting as well as using the Projected Accounts as strongly as they should be.

What I mean is that if a club are over in March/April they get docked points based on the tariff for overspend as Birmingham got set in 2018/19. None of this "We can sort it in the Summer" unless a club actually has contractual evidence, a paper trail showing that a deal lined up, eg a player will be sold by the end of Reporting Period or that players will be sold to get back into balance.

Parachute Payments. My starting point for a solution is to pay them but as loans, albeit not necessarily repayable loans and certainly not with Interest.

You can meet obligations, payables, tax, transfer instalments. However they won't go through the Profit and Loss- the Profit and Loss is a basis of P&S. This will oblige clubs to cut back more quickly unless they're coming down in a really good position, and inhibit them from strengthening unless they get real top dollar for player sales- if they do they'll be able to reinvest less of a % than with Parachute Payments.

Competitive balance improved, stability increased.

Thank you for that thoughtful and informative answer as I said it is a bit of a mystery to me (ffp) I feel I have started my ffp journey 

[AnotherDerbyFan]

22 hours ago, AnAstonVillafan said:

FFP is a good idea implemented very badly. Its probably outdated now.

As for parachute payments, what do you think is the problem exactly ?

They are crucial to how promotion and relegation operate between the top two divisions. Norwich and Watford being top has nothing to do with parachute payments. Their squads are too good for the division.

Can you not see a link there?

[AnAstonVillafan]

19 minutes ago, AnotherDerbyFan said:

Can you not see a link there?

Those squads were not built using parachute payments.

Take Norwich for example. They will go straight back up and therefore wont use the payments. They were paid £94m from last seasons Premer League.

On top of that they sold two players which will net them approx £35m.

And Norwich have never been a club to throw money around.

[AnAstonVillafan]

20 hours ago, Mr Popodopolous said:

In terms of Parachute Payments, I'll address points by both @AnAstonVillafan and @Blockb

Think there is a good case for them from a solvency POV, as there is a TV money based chasm between the two divisions, but at the same time they can have a significant impact in terms of the competitive balance and yoyo effect at this level. 

My starting point for a solution if FFP stays in place, and I think the enforcement in the PL needs to be as watertight as it can be at EFL level, I also think the fixed asset loophole needs shutting as well as using the Projected Accounts as strongly as they should be.

What I mean is that if a club are over in March/April they get docked points based on the tariff for overspend as Birmingham got set in 2018/19. None of this "We can sort it in the Summer" unless a club actually has contractual evidence, a paper trail showing that a deal lined up, eg a player will be sold by the end of Reporting Period or that players will be sold to get back into balance.

Parachute Payments. My starting point for a solution is to pay them but as loans, albeit not necessarily repayable loans and certainly not with Interest.

You can meet obligations, payables, tax, transfer instalments. However they won't go through the Profit and Loss- the Profit and Loss is a basis of P&S. This will oblige clubs to cut back more quickly unless they're coming down in a really good position, and inhibit them from strengthening unless they get real top dollar for player sales- if they do they'll be able to reinvest less of a % than with Parachute Payments.

Competitive balance improved, stability increased.

FFP in the Premier League and UEFA is grey, murky business. Too many competing agendas.
It does not serve the same purpose as it does in the EFL. Most fans here think it merely stops anyone from challenging the top six.

A top six PL club cannot have the same regs as an EFL club. It needs a rethink. In my view it needs scrapping. And simpler measures put in place. I have noticed that you Mr P are very keen to see clubs damaged or destroyed if you feel they have breached but sometimes this approach is not helping at the level.

Some of these clubs badly need investment and if it comes from overseas providing a fit and proper persons test is passed it should be actually encouraged. Owners are finding they cant put the money in to develop even if they wanted to.

The docking of points can be a legal matter subject to appeals. In my opinion a cutoff date should be given as to which season it falls into. When points were docked from Southampton for going into administration ten years ago, it was designed spitefully to ensure relegation or hinder them coming back up. But there was a March cutoff date if I recall correctly.

 

[Merrick's Marvels]

39 minutes ago, AnAstonVillafan said:

Those squads were not built using parachute payments.

Take Norwich for example. They will go straight back up and therefore wont use the payments. They were paid £94m from last seasons Premer League.
 

You miss the point. Yes those squads weren't built using parachute payments but they were sustained by them, at a time those clubs, such as Watford and Norwich this season, would otherwise be unable to afford them.

At Championship level, as you know from personal experience, there's massively less TV money, less corporate revenues, smaller crowds and so on. Without parachute payments, relegated clubs couldn't continue with their existing squads and would have to cut their cloth accordingly. Instead parachute payments allow them to plough on regardless, as if nothing had happened and without adapting to their straitened circumstances. 

Parachute payments to relegated clubs reward failure and distort any attempt at a level playing field and fair competition.

So your statement that "Norwich and Watford being top has nothing to do with parachute payments" is about as incorrect as it could possibly get. 

I have no problem with Norwich City btw - an excellent team this year and a well run, humble club whose achievements my own can only dream of emulating.   

[AnAstonVillafan]

Parachute payments are necessary.

My supporters group spoke face to face with Christian Purslow last season and he told us that without parachute payments the club couldn't afford to sign a Premier League standard player on a three year contract. There's no guarantee we wouldn't be relegated and then we'd struggle to pay the wages of the player if we couldn't shift him.

You will remember Birmingham City had a player on 70k a week plus who they couldn't get rid of after relegation and he stayed there until the last day of his contract 3 seasons later.

Swansea are paying Andre Ayew a stupid amount of money. Bournemouth's goalkeeper is on over 70k a week. Watford have three players on over 70k a week. That is where the parachute money is going if they dont come straight back up.

And remember these clubs come down with a hundred million plus in their back pockets and can sell to bring in additional revenue, before they see a penny of parachute payments. They will aim for an immediate return and will strengthen. They were allowed to do that.

[Kodjias Wrist]

2 minutes ago, AnAstonVillafan said:

Parachute payments are necessary.

My supporters group spoke face to face with Christian Purslow last season and he told us that without parachute payments the club couldn't afford to sign a Premier League standard player on a three year contract. There's no guarantee we wouldn't be relegated and then we'd struggle to pay the wages of the player if we couldn't shift him.

You will remember Birmingham City had a player on 70k a week plus who they couldn't get rid of after relegation and he stayed there until the last day of his contract 3 seasons later.

Swansea are paying Andre Ayew a stupid amount of money. Bournemouth's goalkeeper is on over 70k a week. Watford have three players on over 70k a week. That is where the parachute money is going if they dont come straight back up.

And remember these clubs come down with a hundred million plus in their back pockets and can sell to bring in additional revenue, before they see a penny of parachute payments. They will aim for an immediate return and will strengthen. They were allowed to do that.

If they can't afford those wages or have the clause implemented in the contract why the hell should it be softened by parachute payments they should level the playing field with other championship clubs or reduce it massively. As others have said it sustains clubs coming down. If Watford didn't have the parachute payments they would have sold players like Sarr for a somewhat discounted price perhaps. Same would be the case with others in that team and the outcome of this would put them in a less likely state to go up again.

[AnAstonVillafan]

26 minutes ago, Kodjias Wrist said:

If they can't afford those wages or have the clause implemented in the contract why the hell should it be softened by parachute payments they should level the playing field with other championship clubs or reduce it massively. As others have said it sustains clubs coming down. If Watford didn't have the parachute payments they would have sold players like Sarr for a somewhat discounted price perhaps. Same would be the case with others in that team and the outcome of this would put them in a less likely state to go up again.

Why should a PL club care about levelling the field with a Championship club ? Trust me the PL only ever cares about itself.
A prudent club would put in relegation wage drop clauses. When we came down the CEO had put them into most contracts. Micah Richards was getting 27.5k a week for example. A 50% drop. Same with Agbonlahor.

You're saying why should it be softened, thats what its there for. If Bournemouth or Swansea dont come up the cuts will be made. If you have a club getting £110m a season and then suddenly dropping to £20m instantly. Its too hard a hit. And its not just about player wages. At VIlla 150 people lost their jobs.
Its not sustaining them, its weaning them off the megabucks because a club could go into administration if they cant shift a player. And club is allowed to ask fair market value for a player. Should we have sold Grealish for £5m plus Onomah ? Why cant we ask for fair value ?

For £25m Spurs would have closed that deal. I reckon Jack Grealish is worth a little more than that today. Why should a club have its pants pulled down just because they've been relegated ?  

Watford raised about £40 to 45m in sales inc Doucoure who was thought to have gone cheaply at £20m. If Watford go straight back up they wont touch the parachute money and it never sustained them.

[Davefevs]

23 minutes ago, AnAstonVillafan said:

Parachute payments are necessary.

why?

My supporters group spoke face to face with Christian Purslow last season and he told us that without parachute payments the club couldn't afford to sign a Premier League standard player on a three year contract.

Purslow - the bloke who provided consultancy in the rules in the first place?  What a surprise he thinks the way he does, and therefore sells that notion to his fan base.

if you’re in the Championship, why should you be entitled to buy a PL quality player on a 3 year deal.  If upon promotion you can’t attract a player and him accept a relegation release clause, then unlucky.  Go for a different type of player, or put a release clause in.  You can mitigate the amortisation loss with your revenues.

There's no guarantee we wouldn't be relegated and then we'd struggle to pay the wages of the player if we couldn't shift him.

Relegation wage reduction.  Learn from Rodwell / Sunderland.

You will remember Birmingham City had a player on 70k a week plus who they couldn't get rid of after relegation and he stayed there until the last day of his contract 3 seasons later.

Bad recruitment, bad contract decisions.

Swansea are paying Andre Ayew a stupid amount of money. Bournemouth's goalkeeper is on over 70k a week. Watford have three players on over 70k a week. That is where the parachute money is going if they dont come straight back up.

Same answer as above.

And remember these clubs come down with a hundred million plus in their back pockets and can sell to bring in additional revenue, before they see a penny of parachute payments. They will aim for an immediate return and will strengthen. They were allowed to do that.

What do you mean “before they see a penny of PPs”....they get it regardless.  They don’t have to spend all their money first.  It’s not a condition.

Comments above.

 

[Davefevs]

3 minutes ago, AnAstonVillafan said:

Why should a PL club care about levelling the field with a Championship club ? Trust me the PL only ever cares about itself.
A prudent club would put in relegation wage drop clauses. When we came down the CEO had put them into most contracts. Micah Richards was getting 27.5k a week for example. A 50% drop. Same with Agbonlahor.

You're saying why should it be softened, thats what its there for. If Bournemouth or Swansea dont come up the cuts will be made. You have a club getting £110m a season and then dropping to £20m instantly. Its too hard a hit. And its not just about player wages. At VIlla 150 people lost their jobs.
Its not sustaining them, its weaning them off the megabucks because a club could go into administration if they cant shift a player. And club is allowed to ask fair market value for a player. Should we have sold Grealish for £5m plus Onomah ? Why cant we ask for fair value ?

For £25m Spurs would have closed that deal. I reckon Jack Grealish a little more than that today. Why should a club have its pants pulled down just because they've been relegated ?  

Watford raised about £40 to 45m in sales inc Doucoure who was thought to have gone cheaply at £20m. If Watford go straight back up they wont touch the parachute money and it never sustained them.

Perhaps don’t spend all of your £110m and overcommit yourself if you do get relegated.

[AnAstonVillafan]

24 minutes ago, Davefevs said:

Parachute payments are necessary.

why?

 

Purslow - the bloke who provided consultancy in the rules in the first place?  What a surprise he thinks the way he does, and therefore sells that notion to his fan base.

if you’re in the Championship, why should you be entitled to buy a PL quality player on a 3 year deal.  If upon promotion you can’t attract a player and him accept a relegation release clause, then unlucky.  Go for a different type of player, or put a release clause in.  You can mitigate the amortisation loss with your revenues.

What Purslow said was as a newly promoted Premier League club. Imagine Bristol going up and having to pay Championship level wages while Brighton and Burnley pay the going rate. You wouldn't last long. We kept our wage bull under control and it was the 3rd lowest in the Prem that 1st year back. Purslow said we couldn't compete with Brighton and Watford on wages

Relegation wage reduction.  Learn from Rodwell / Sunderland.

Lower table PL clubs put them in but many players won't accept them. They are trying to insert them into more Premier League contracts right now because of Covid and the players union / players are opposing it strongly. If Andre Ayews contract went down by 50% he'd still get paid more than any other player in Bristol City's history.

Bad recruitment, bad contract decisions.

They are an awful club but that case and the example of Tal Ben Haim of Portsmouth serve as the lesson

Swansea are paying Andre Ayew a stupid amount of money. Bournemouth's goalkeeper is on over 70k a week. Watford have three players on over 70k a week. That is where the parachute money is going if they dont come straight back up.

Same answer as above.

Players contracts are watertight and if a PL club is trying to progress and develop they need to attract a better calibre of player, this costs more.

 

What do you mean “before they see a penny of PPs”....they get it regardless.  They don’t have to spend all their money first.  It’s not a condition.
Many dont spend all their money. Norwich didnt. Money is paid at the end of the season (I read years ago that newly promoted clubs receive an advance not sure if still the case)

What do you expect these clubs to do ? Survive on £20m to £30m when their wage bills could be £40m or £50m ?

You will say cut costs but sometimes no one wants the player, or he is happy taking the money. Parachute payments dont last forever.

 

Comments above

[Mr Popodopolous]

1 hour ago, AnAstonVillafan said:

FFP in the Premier League and UEFA is grey, murky business. Too many competing agendas.
It does not serve the same purpose as it does in the EFL. Most fans here think it merely stops anyone from challenging the top six.

A top six PL club cannot have the same regs as an EFL club. It needs a rethink. In my view it needs scrapping. And simpler measures put in place. I have noticed that you Mr P are very keen to see clubs damaged or destroyed if you feel they have breached but sometimes this approach is not helping at the level.

Some of these clubs badly need investment and if it comes from overseas providing a fit and proper persons test is passed it should be actually encouraged. Owners are finding they cant put the money in to develop even if they wanted to.

The docking of points can be a legal matter subject to appeals. In my opinion a cutoff date should be given as to which season it falls into. When points were docked from Southampton for going into administration ten years ago, it was designed spitefully to ensure relegation or hinder them coming back up. But there was a March cutoff date if I recall correctly.

 

I have a certain level of anger about clubs who stretch the regulations, I am very keen to see them restricted where necessary and punished where necessary. I make no attempt to hide that.

I do know that at the UEFA level, Fixed Asset Profits are adjusted out verbatim, as they were in the Championship until 2016. That actually follows consistently because why should a club, any club be able to spend (and rightly so) on building up the Infrastructure and it being excluded but benefit on the Profit from the same type of assets? With UEFA's Fixed Asset approach, everyone knows where they stand.

My stance has softened on one club, Birmingham, over time. I was all for the 9 points two years back and applaud the EFL for that and the Business Plan but look since.

Off the top of my head. Adams- SOLD, Bellingham- SOLD, Jota- SOLD. Turned modest profits on varied others and lost captain Morrison in 2019 as well, they look to have reformed or be reforming. They have signed decent age range with potential sell on value. Where reform kicks in my stance starts to change. They have many issues but it appears on the face of it that lessons have been learned there.

It's a complex issue FFP. I could point to clubs who have risen in European competition through working the system quite well. From a pure solvency POV, cash flow and balance sheet may in fact be preferable to the P&L Account but the EFL regs do contain something called "Cash Losses" too but this gets little coverage.

In top divisions across Europe, from 2009 to 2019 there was an Aggregate Loss turned into an Aggregate Profit and FFP will have played a role. The Championship is a curious case study set against this and two things in particular- Parachute Payments plus the Fixed Asset loophole will play a part.

Owners can invest as much as they like, in certain areas. It can help a club to grow organically, putting foundations in place. That's why eg Building a new stadium is wholly excluded from FFP calcs.

If you allow unlimited expenditure on wages or fees that can leave a club uber reliant on an owner and vulnerable to events. See Malaga, see closer to home Portsmouth. See Monaco though they merely changed tack as opposed to imploded. Rangers?

The points deduction process needs streamlining. I'll expand a bit- Side goes into admin, points are docked as an automatic punishment. Right to appeal but limited grounds, Wigan were put into admin as soon as taken over and their appeal unsuccessful.

Example. A club has I don't know aggregate after allowable costs losses of £30m in prior two seasons and a Projected loss of £18m in the existing season that they submit in March to EFL.

That's roughly equivalent to Birmingham's 3 year overspend. The pts tariff would show that to be a 7 point deduction as a starting point.

You therefore progress through the Independent Panel to the Secondary Sentencing Hearing, and there mitigating and aggravating factors can be debated. In that scenario I could see it either dropping to 5-6, or rising to 10-15. Trending losses ie rising, falling fairly even or similar, whether some bits out of hands, whether victim of inept former owners, you get the idea. Points deducted in March or April seems fair to me, with a £13m target for the following season and maybe the one after that as past losses would reset to £13m or an aggregate of £26m which would give clarity for the following year or two.

With respect to Parachute Payments, without them Watford may have needed to have sold Sarr eg. Norwich this time around I'm less certain on, they may have had sufficient headroom from an FFP POV not to sell anyone additional this season and tbh very well run club.

Bournemouth surprisingly (or perhaps not) made some notable cutbacks and sales this season despite Parachute Payments and deferred revenue into 2020/21. The latter will feature in your Accounts too, in fact any PL side whose Reporting Period saw Accounts came to an end before July 2020.

I'll make one concession to my initial idea. Clubs coming down get an equal amount to Solidarity Payments if they don't receive these and Parachute Payments. That aside, like I say put it in the Cash Flow, the Balance Sheet. Still helps clubs who are relegated but the Competitive imbalance is reduced as it won't go through Profit and Loss.

Another variation of my idea is that Parachute Payments can be used to pay off high earners or to be ring fenced in a special fund and the club get it in tranches when and only when efforts made to offload. Again won't hit the Profit and Loss in the same way thereby reducing the Competitive Imbalance.

[Davefevs]

1 hour ago, AnAstonVillafan said:

Comments above

Thanks.  Doesn’t justify PPs though.

Advancing PPs is a cash flow issue.  Plenty of clubs borrow against the security of it.  The stupid clubs, borrow their 2 or 3 years worth in their first season back down.  I’m fine with that if the intention is to give it a first-chance whirl....but then they don’t plan for it not happening.

Clubs need to be smarter.

[downendcity]

8 minutes ago, Davefevs said:

Thanks.  Doesn’t justify PPs though.

Advancing PPs is a cash flow issue.  Plenty of clubs borrow against the security of it.  The stupid clubs, borrow their 2 or 3 years worth in their first season back down.  I’m fine with that if the intention is to give it a first-chance whirl....but then they don’t plan for it not happening.

Clubs need to be smarter.

Some were smarter than the EFL and “sold”  their stadia ! 

 

[Mr Popodopolous]

2 hours ago, downendcity said:

Some were smarter than the EFL and “sold”  their stadia ! 

 

The odd thing about that whole debacle.

Based on the Written Reasons and it's a while since I've read but at least one, if not both of Derby and Sheffield Wednesday were not initially sure the EFL would approve of such a move- definitely rings a bell in the case of Sheffield Wednesday.

@AnotherDerbyFan might know more about it but though it's 123 pages in Derby's case and quite a big one in Sheffield Wednesday's too, I'm sure one if not both approached the EFL with the idea, yet had uncertainty about what the outcome would be. May look again at both now, bit of light reading!

As far as Sheffield Wednesday goes, if it turns out that Sheffield 3 and 5 Limited are like the football club part of some overarching group then it could yet pose a problem- and I'm unsure the EFL are so convinced about the valuation either...let's hope they hire a better expert next time!

My early research suggests they might not be part of the overall Group but certain things can come to light later. 

e.g. If we look at the Sheffield Wednesday Accounts we shall see that they were controlled by Chansiri directly, ie the ones to 2018/19.

Then we look at the Confirmation Statement, it shows Chansiri and then the following year SWFC Holdings.

However- when we actually saw the 2019 Accounts- SWFC Holdings (based in Hong Kong)-Sheffield 2 Limited-Chansiri. Sheffield 2 Limited is the top company in that Structure which is slightly odd as SWFC Holdings surely makes more sense? Would have thought Holdings being the top dog corporate structure wise is most sensible.

We are still waiting on Accounts for Sheffield 2 Limited, Sheffield 3 Limited and Sheffield 5 Limited as well as 2019/20 Sheffield Wednesday. The Confirmation Statements and Overall Control suggest no link but who can say that Sheffield 3 Limited or Sheffield 5 Limited definitely won't prove to fall under SWFC Holdings or Sheffield 2 Limited- if that's the case then oops, what a shame- adjust out on consolidation and the 2018/19 results then exclude the Hillsborough sale! Adjusted out and they fail again, just a question of by how much.

Small oddity about the assignment to the Controlling Party of Sheffield 3 Limited to Sheffield 4 Limited- then switch to Sheffield 5 Limited as well! Odd indeed that the Share Capital was Transferred from SWFC Holdings to both Sheffield 2 Limited and Sheffield 4 Limited on the same day ie 28th June 2019 which was the same day as Hillsborough Sale was listed as...Sheffield 4 Limited was officially listed as wound up on the same day, and this finally was confirmed/came through on Boxing Day 2019- that winding up means zero need to produce Accounts for that company.

Sufficient doubt for the EFL to pile back in here IMO and that's before we even consider the possible inflated value! I'd hope they are fully aware of all that and scrutinising it correctly.

[Mr Popodopolous]

Found it for Sheffield Wednesday.

Quote

29.  JR said that this exchange demonstrated that the EFL was prepared to entertain a stadium sale as a means by which the P&S Rules could be met, something about which the club was unsure at the outset.

https://www.efl.com/siteassets/image/201920/1920-judgements/efl-v-sheffield-wednesday-fc---decision.pdf

Quote

73) At the same time the Club also approached the EFL to discuss

a) Whether in principle funds generated from a sale of Pride Park could be used by the Club for the purposes of complying with the P&S Rules, and

b) How the Club might structure such a sale to ensure that it complied with the P&S Rules.

74) The EFL’s position in 2018, as it remains today, was that in principle profits generated by a club from the sale of its stadium could be used by the club for the purpose of complying with the P&S Rules. Accordingly on 4 June 2018 the EFL sent a detailed email to the Club setting out 5 scenarios involving the sale of Pride Park by the Club, and how the EFL might approach each scenario. The EFL made it clear however that its ‘ultimate approach’ would be determined by the precise nature of any transaction that the Club undertook.

https://www.efl.com/siteassets/image/202021/general-news-images/efl-v-derby-county--decision.pdf

For Derby too.

Seems the EFL actually totally opened a door that was partially ajar @downendcity unbelievable tbh!!

Neither club were sure, especially it seems Sheffield Wednesday but the EFL seem to have said "Come on through- just give the door a little shove, it's a bit stiff!"

Mistakes on the EFL's part...With respect to Sheffield Wednesday,  an Independent Valuation is an absolute must- there is no evidence that one ever occurred, let alone the method. In Derby's case, even if you accept the laughable £81.1m or £74.4m for P&S purposes, for both and indeed all Scenarios the Independent Valuer suggested Annual Rent of £4.16m per season- as a term of agreement they should have insisted on this in writing. For both Derby and Sheffield Wednesday.

Quote

c)  JLL assessed the Market Rent of Pride Park on the basis of a sale and leaseback agreement at £4,160,000 per annum.

That should have been watertight?

[Mr Popodopolous]

With respect to your earlier points @AnAstonVillafan in terms of being out for blood in terms of certain clubs P&S wise. I'd say there are some yes if I'm honest.

Derby- and this is no reflection on our good Derby posters. Reading their forum absolute bunch of idiots a decent number of them, and arrogant about it. Arrogant and ignorant- on matters of football finance- Mel Morris twisting things, yes I do find myself wishing a significantly hard landing on them. As well as the Amortisation, the Rent fiddle, the shifting valuation.

Never ceases to amaze me how much they rant about Matt Hughes too- his track record while not flawless is actually quite decent, particularly on Derby and certain clubs FFP wise! (Other stuff too I'm sure but I read a lot of his stuff on FFP). Yet they think it's all an agenda, that he hates them etc.

In terms of Aston Villa, I have a notable problem for a few reasons- no reflection on you, a good poster! A club with Parachute Payments x 3 and one of the naturally higher incomes at this level, nonetheless had to do all that...

• Sense of entitlement I see on Social Media.
• The dicing with disaster be it financial or notable P&S constraints- Summer 2018, had you not gone up in 2018/19 and quite possibly had you come down in 2019/20- how fortunate can you get.
• The Impairment trick in the 2015/16 Accounts, to bank a big profit on it in 2018/19- I'm still not convinced how kosher that was. Certainly for P&S.
• See also the Lease length- not terribly commercial is it, a 4-5 year lease for a £56.7m transaction is it? For £2.6-2.7m per year. No problem with the Rent, seems a reasonable % but the Lease length? Suppose it'll just revert back to Club after the 5th Year? Massive outlier in that respect- most leases are 20-30 years or have been for Stadiums and the total return if it does just revert back on Year 5 cost free, would be pathetic from a commercial standpoint.
• The Reclassification and switching between Tangible Assets, Investment Property and back again over several years. It's been a while since I looked at that last bit in depth but seems a bit odd and certainly when Accounting for it in P&S.

When Aston Villa ie through NSWE UK finally release their Accounts and they're at CH, I'll be looking forward to getting stuck in.

[Mr Popodopolous]

Well that's strange, cannot find it at this time the bit about Villa Park, the Training Ground etc being classified as Investment Property.

Irrespective if a Tangible Fixed Asset is Impaired, then that means written down to its recoverable value- a club needs to be held to that- The Football League what were they doing??

Quote

Carrying amount: the amount at which an asset is recognised in the balance sheet after deducting accumulated depreciation and accumulated impairment losses. Recoverable amount: the higher of an asset's fair value less costs of disposal* (sometimes called net selling price) and its value in use.

Clue- it was quite a bit less than £56.7m- if the Impairment is Reversed or Partially Reversed, this would knock down the Profit on Disposal as the Carrying Amount or Book Value/Net Book Value would be higher...

Quote

Recognition of an impairment loss

• An impairment loss is recognised whenever recoverable amount is below carrying amount. [IAS 36.59]
• The impairment loss is recognised as an expense (unless it relates to a revalued asset where the impairment loss is treated as a revaluation decrease). [IAS 36.60]
• Adjust depreciation for future periods. [IAS 36.63]

In other words, the Recoverable amount as per your own Accounts fell below the Sale Price. Clearly below.

It was Impaired in 2015/16 Accounts on relegation, which arose in 2016/17 when the Accounts came to light- it is unique among clubs who have done this, it's hard to say.

[Mr Popodopolous]

Found it...ironically on this Forum I was posting about it in March 2020!

Aston Villa Limited Accounts to 31 May 2016.

Page 23/23, Note 17 regarding Transition to FRS 102.

Quote

17     Transition to FRS 102

This is the first year that the company has presented its results under FRS 102. The last financial statements under UK GAAP were for the year ended 31 May 2015.  The date of transition to FRS 102 was 1 June 2014. We have set out below changes in accounting policies which reconcile profit for the financial year ended 31 May 2015 and the total equity as at 1 June 2014 and 31 May 2015 between UK GAAP as previously reported and FRS 102.

Villa Park, Bodymoor Heath Training Ground and the Holte Hotel are being utilised by the company Aston Villa Football Club Limited, and are required to be classified as Investment Properties in the Company accounts, where they are held at Fair Value. This requires separate presentation on the Balance Sheet. This is reversed for the consolidation in the consolidated accounts of Reform Acquisition Limited.

The Fair Value of those 3 Assets combined was stated at £36,804,318- indeed post Impairment it fell to £34,203,227. Combined.

Likewise, your Total Net Book Value in 2015/16 following the Impairment was £39,180,000 in the consolidated Accounts- and as we've already established while Net Book Value does not represent Fair Value, or Market Value, once Impairment comes into play it has a drag- in terms of Recoverable Value.  This was inclusive of £7.9m or thereabouts of Land- as we know Land doesn't depreciate.

Regardless, in the 2017/18 Accounts which were done post new ownership, it suddenly appears under a reclassification under Tangible Fixed Assets and is £56.7m for Book Value- where does the extra £20-22m come from, why is no Impairment Reversal disclosed.

Sorry @AnAstonVillafan but it's pretty sketchy in a number of respects! Over a period of several years, seemingly classifying, reclassifying and back again, swings in valuation- it's sketchy! Relative lack of disclosure unless I missed it somewhere for the 2017/18 Accounts.

Actually, wait- found this one buried away in the Aston Villa Limited Accounts for 2017/18- not the Consolidated Accounts.

Quote

Prior year adjustment

During the year, the company amended its accounting policy for the value of the investment property owned by the parent and let within the group from revaluation model to cost model, to be classified as Tangible Fixed assets following the adoption of the Amendments to FRS 102 - Trienniel Review 2017. The impact of this change in accounting policy is to decrease the net book value of Investment Property, decrease profit for the financial year ending 31 May 2017, and decrease opening reserves by £1,339,791.

From an FFP pov, that's bullshit. Possibly suspect from an FRS 102 POV- Accounting Policies must be applied consistently.

Quote

Accounting Policies must be applied consistently to promote comparability between financial statements of different accounting periods. ... Consequently, entity shall adjust all comparative amounts presented in the financial statements affected by the change in accounting policy for each prior period presented.

I do wonder if the EFL picked all this up...In 2014/15, the Tangible Fixed Assets under Aston Villa Limited were stated at:

A Cost of £36,804,318.

Which coincidentally was stated as their Fair Value combined in 2015/16 and for 2014/15- at this stage Cost under Tangible Fixed Assets=Fair Value under Investment Property.

Indeed the note I posted higher about the Transition to FRS 102 listed these under Investment Property- clearly it dropped with the Impairment which also appeared in 2016/17.

Reclassification and back up under Cost back to around £56m....suspect, suspect, suspect!! To be sold in 2018/19 with its Cost at £20-21m hence the Profit on Disposal- Dodgy, Dodgy, Dodgy!!

Cannot fathom how both the Asking Price ie the Sale Price and the Net Book Value, Fair Value are all consistent. The 2016 Impairment, albeit for the Investment Property ie the 3 listed was only £2.6m or thereabouts.

Villa Park alone sold at a Fair Value some £20-25m higher than the recently stated Fair Value in terms of Investment Property of the Stadium, Training Ground and Hotel combined- dodgy!!

[AnAstonVillafan]

19 hours ago, Davefevs said:

Thanks.  Doesn’t justify PPs though.

Advancing PPs is a cash flow issue.  Plenty of clubs borrow against the security of it.  The stupid clubs, borrow their 2 or 3 years worth in their first season back down.  I’m fine with that if the intention is to give it a first-chance whirl....but then they don’t plan for it not happening.

Clubs need to be smarter.

Borrowing against PP is foolish. That should not be happening.

But whats the alternative. You cant just say that a Premier League outfit can only budget to the level of a Championship club. Thats a race to the bottom. Especially when some clubs like West Ham, Leicester, Wolves or even Villa aspire to pushing towards the Europa League spots.

I understand your frustration with ourselves where we came down and started throwing money all over the place. We handled it very badly. And I hated what we did with the stadium. A crafty trick.

The problem is the gap between the top two divisions. Its just too wide.

A relegated club can sell players but its not always a simple activity.

Sometimes a highly paid player cant be shifted. For example Newcastle's Joelinton is on 80k a week. I cant see too many takers for him on that salary if they go down. Does that mean that they shouldn't have signed him ? Limited their spend just in case ?


 

[AnAstonVillafan]

15 hours ago, Mr Popodopolous said:

With respect to your earlier points @AnAstonVillafan in terms of being out for blood in terms of certain clubs P&S wise. I'd say there are some yes if I'm honest.

Derby- and this is no reflection on our good Derby posters. Reading their forum absolute bunch of idiots a decent number of them, and arrogant about it. Arrogant and ignorant- on matters of football finance- Mel Morris twisting things, yes I do find myself wishing a significantly hard landing on them. As well as the Amortisation, the Rent fiddle, the shifting valuation.

Never ceases to amaze me how much they rant about Matt Hughes too- his track record while not flawless is actually quite decent, particularly on Derby and certain clubs FFP wise! (Other stuff too I'm sure but I read a lot of his stuff on FFP). Yet they think it's all an agenda, that he hates them etc.

In terms of Aston Villa, I have a notable problem for a few reasons- no reflection on you, a good poster! A club with Parachute Payments x 3 and one of the naturally higher incomes at this level, nonetheless had to do all that...

• Sense of entitlement I see on Social Media.
• The dicing with disaster be it financial or notable P&S constraints- Summer 2018, had you not gone up in 2018/19 and quite possibly had you come down in 2019/20- how fortunate can you get.
• The Impairment trick in the 2015/16 Accounts, to bank a big profit on it in 2018/19- I'm still not convinced how kosher that was. Certainly for P&S.
• See also the Lease length- not terribly commercial is it, a 4-5 year lease for a £56.7m transaction is it? For £2.6-2.7m per year. No problem with the Rent, seems a reasonable % but the Lease length? Suppose it'll just revert back to Club after the 5th Year? Massive outlier in that respect- most leases are 20-30 years or have been for Stadiums and the total return if it does just revert back on Year 5 cost free, would be pathetic from a commercial standpoint.
• The Reclassification and switching between Tangible Assets, Investment Property and back again over several years. It's been a while since I looked at that last bit in depth but seems a bit odd and certainly when Accounting for it in P&S.

When Aston Villa ie through NSWE UK finally release their Accounts and they're at CH, I'll be looking forward to getting stuck in.

I'm OK with Parachute Payments. Its a solution. I get the frustration for fans of clubs that dont get them. They serve a purpose. Aston Villa got relegated and promoted alongside Norwich City who would have received exactly the same payments.

Sense of entitlement on Social Media........

As I've said to you before we have very ambitious fans who expect progress as a PL club. Relegation is hard to accept for them. Especially the older ones. And we're surrounded by 4 or 5 local rivals who would love to see our demise. That causes tension.

I don't think we are entitled to anything but 12 years ago we were pushing for Champions League football and in a UEFA Cup quarter-final.
I saw visions of Leeds United when we failed to get back up the first time where it could take decades. No one wants that for their team.

The dicing with disaster ........
Desparate attempts to return underpinned by a lying incompetent leader who nearly had us in administration. I refuse to think that we should suffer today for the misdeeds of a long departed owner. I dont understand the impairment element in all honesty.

The lease length ? maybe its under a review where the situation can change. I dont thnk either of us knows really whats going on there.

You can get stuck into the accounts but its the Premier League's opinion which is important. Not yours.

I dont think you'll ever get what you're wanting here. Its difficult to compare/contrast our respective clubs.

I notice you always say clubs should show restraint, sell players at the first opportunity, balance books or anything excect buy a player in order improve their team.

Not all clubs are going to abide by this.
 

 

 

[Mr Popodopolous]

On 13/04/2021 at 16:52, AnAstonVillafan said:

I'm OK with Parachute Payments. Its a solution. I get the frustration for fans of clubs that dont get them. They serve a purpose. Aston Villa got relegated and promoted alongside Norwich City who would have received exactly the same payments.

Sense of entitlement on Social Media........

As I've said to you before we have very ambitious fans who expect progress as a PL club. Relegation is hard to accept for them. Especially the older ones. And we're surrounded by 4 or 5 local rivals who would love to see our demise. That causes tension.

I don't think we are entitled to anything but 12 years ago we were pushing for Champions League football and in a UEFA Cup quarter-final.
I saw visions of Leeds United when we failed to get back up the first time where it could take decades. No one wants that for their team.

The dicing with disaster ........
Desparate attempts to return underpinned by a lying incompetent leader who nearly had us in administration. I refuse to think that we should suffer today for the misdeeds of a long departed owner. I dont understand the impairment element in all honesty.

The lease length ? maybe its under a review where the situation can change. I dont thnk either of us knows really whats going on there.

You can get stuck into the accounts but its the Premier League's opinion which is important. Not yours.

I dont think you'll ever get what you're wanting here. Its difficult to compare/contrast our respective clubs.

I notice you always say clubs should show restraint, sell players at the first opportunity, balance books or anything excect buy a player in order improve their team.

Not all clubs are going to abide by this.
 

 

 

Yes but Norwich started to sell players from the get go. So did you in Years 1 and 2 but perhaps to a lesser extent. Maddison was their out, Maddison and Murphy in 2017/18 but they were cutting costs from fairly early, but will have to look further. They didn't sell Fixed Assets or fortunately receive cash for HS2. By fortune I am talking about geography not conspiracy theories.

A starting point to a solution would be Parachute Payments as Loans at zero interest that help the Balance Sheet and Cash Flow but disregard the Profit and Loss Account. You know, like the PL bailout Championship loans proposal.

Fair points on Social Media and nobody wants for their team.

Dicing with disaster. Summer 2018 is one part, had you missed promotion in 2019 there would have had to have been huge cutbacks to ensure compliance going into 2019/20 and 2020/21. Surely you know this? Relegation last season but for VAR and an in-form West Ham who suddenly found themselves safe by the final day probably helped avoid a significant EFL Investigation.

Anyway I digress. From a Regulations POV, the loss lies with the Club not the Owner, an Owner who seemed to have put it all on Red within 2 years? Is that a mitigating factor in any Hearing as in a way to reduce points deducted etc? Absolutely. Is it a Pass? Certainly not.

See Wigan, new owner takes over and quickly puts them into Administration. Desperately unlucky for the Club but - 12 still the outcome, as Admin=Fixed Penalty. Which FFP needs nailed down in terms of Points, based on the Tariff we know about.

That has some merit but at the same time, you signed on loan Mings, El Ghazi and Abraham despite being so close to the line. £9-10m on Kalinic and French LB in Jan 2019 as well (amortisation, 4.5 years each, combined about £1m added).

Yes, agreed. Conjecture on my part in reality in terms of the lease, but the length seems lower than many.

Time will tell but they could do many things. Stick the rent up, take a starting point of say 5% of Sale Price on a 30 year lease and link it to inflation. A good little earner might be £2.8m per year, in Year 2 inflation is say 1%, following years Rent would be £3.08m and so on. That's a starting point but I believe Inflation linked Rent isn't unheard of in the Commercial World.

Given the tie in with EFL and PL Rules, until such time as the final EFL season has disappeared surely they get a say too? Surely they have a view (though they have their own problems with as many as 10 Championship clubs potentially under an embargo for one reason or another).

Certainly difficult to compare and contrast clubs though I would point out that a club the size and stature of AC Milan got a year ban from Europe by UEFA over FFP issues.

The way to make them abide or hem them in at least is to promptly slap on the Embargo and Budgetary requirements. See Rule 16.20 in EFL regs which and I keep coming back to it, Birmingham- was pretty tight to the extent that it was reported they couldn't even renew a Youth Player in 2018/19.

See Reading and Omar Richards, off to Bayern on a free in part due to EFL Budgetary restraints, Blackburn and Nyambe maybe similar, Stoke and Powell certainly sounds like FFP is playing a role we're moving towards proper Monitoring now.

I think the EFL messed up elements of that case too, Birmingham wise BTW. If the target was to right the ship by January that charge should also be tacked on to the Hearing they had for the 3 years to 2017/18.

Who knows if sending through the charge in mid May 2019 jolted them into selling St Andrews. If EFL sent it through in July 2019, maybe they wouldn't have done the Stadium Sale in time.

I think they were probably £7-8m over Business Plan Target in March 2019. Open and shut case, 2nd Hearing or additional to the initial one surely?  

Of course if that's the case then all clubs showing a Projected Overspend need deducting in March/April as the rules state. Can't just pick on Birmingham. I think those who are under a Business Plan have to sort it by March, Reading feel like they should be docked points forthwith.

[AnAstonVillafan]

3 hours ago, Mr Popodopolous said:

Yes but Norwich started to sell players from the get go. So did you in Years 1 and 2 but perhaps to a lesser extent. Maddison was their out, Maddison and Murphy in 2017/18 but they were cutting costs from fairly early, but will have to look further. They didn't sell Fixed Assets or fortunately receive cash for HS2. By fortune I am talking about geography not conspiracy theories.

A starting point to a solution would be Parachute Payments as Loans at zero interest that help the Balance Sheet and Cash Flow but disregard the Profit and Loss Account. You know, like the PL bailout Championship loans proposal.

Fair points on Social Media and nobody wants for their team.

Dicing with disaster. Summer 2018 is one part, had you missed promotion in 2019 there would have had to have been huge cutbacks to ensure compliance going into 2019/20 and 2020/21. Surely you know this? Relegation last season but for VAR and an in-form West Ham who suddenly found themselves safe by the final day probably helped avoid a significant EFL Investigation.

Anyway I digress. From a Regulations POV, the loss lies with the Club not the Owner, an Owner who seemed to have put it all on Red within 2 years? Is that a mitigating factor in any Hearing as in a way to reduce points deducted etc? Absolutely. Is it a Pass? Certainly not.

See Wigan, new owner takes over and quickly puts them into Administration. Desperately unlucky for the Club but - 12 still the outcome, as Admin=Fixed Penalty. Which FFP needs nailed down in terms of Points, based on the Tariff we know about.

That has some merit but at the same time, you signed on loan Mings, El Ghazi and Abraham despite being so close to the line. £9-10m on Kalinic and French LB in Jan 2019 as well (amortisation, 4.5 years each, combined about £1m added).

Yes, agreed. Conjecture on my part in reality in terms of the lease, but the length seems lower than many.

Time will tell but they could do many things. Stick the rent up, take a starting point of say 5% of Sale Price on a 30 year lease and link it to inflation. A good little earner might be £2.8m per year, in Year 2 inflation is say 1%, following years Rent would be £3.08m and so on. That's a starting point but I believe Inflation linked Rent isn't unheard of in the Commercial World.

Given the tie in with EFL and PL Rules, until such time as the final EFL season has disappeared surely they get a say too? Surely they have a view (though they have their own problems with as many as 10 Championship clubs potentially under an embargo for one reason or another).

Certainly difficult to compare and contrast clubs though I would point out that a club the size and stature of AC Milan got a year ban from Europe by UEFA over FFP issues.

The way to make them abide or hem them in at least is to promptly slap on the Embargo and Budgetary requirements. See Rule 16.20 in EFL regs which and I keep coming back to it, Birmingham- was pretty tight to the extent that it was reported they couldn't even renew a Youth Player in 2018/19.

See Reading and Omar Richards, off to Bayern on a free in part due to EFL Budgetary restraints, Blackburn and Nyambe maybe similar, Stoke and Powell certainly sounds like FFP is playing a role we're moving towards proper Monitoring now.

I think the EFL messed up elements of that case too, Birmingham wise BTW. If the target was to right the ship by January that charge should also be tacked on to the Hearing they had for the 3 years to 2017/18.

Who knows if sending through the charge in mid May 2019 jolted them into selling St Andrews. If EFL sent it through in July 2019, maybe they wouldn't have done the Stadium Sale in time.

I think they were probably £7-8m over Business Plan Target in March 2019. Open and shut case, 2nd Hearing or additional to the initial one surely?  

Of course if that's the case then all clubs showing a Projected Overspend need deducting in March/April as the rules state. Can't just pick on Birmingham. I think those who are under a Business Plan have to sort it by March, Reading feel like they should be docked points forthwith.

We did sell players. Good players. Personally I was gutted to see Jordan Amavi and Jordan Veretout leave. Idrissa Gueye left for a third of his value. He will play in the Champions League semi-final soon. Ciaran Clark, Adama Traore, Ashley Westwood , Jordan Ayew among others.

They had to be replaced, and we weren't gonna do it with kids. You are always saying , sell, sell, sell but we are down to the bones after that.
I did disagree with the 2016 spending spree though. Reckless. Without the loans in 2018 we're down to nothing. I know that cutbacks where forthcoming. There had been cuts and the axe was going to swing harder. Purslow did not expect promotion that year.

HS2 ? its fair. We made a big investment there. The relegation isnt just about selling players. Its people losing jobs. What that does to a community. We had to close the Upper Tier on the Main Stand. The club shop in the city centre was shut down.

We were going to undertake works to the North Stand lower and corner annex to install an access ramp and 50 new wheelchair spaces. There is a three year waiting list for disabled fans at VP, and away supporters have to use a space in with the home fans. I was happy to give up my ST seat for the cause, but relegation got that cancelled. Thankfully the new owners have a proposal.

A solution for Parachute payments is maybe to link the payments to wage bill/ turnover ratio.  With an incentive for clubs to offload high earners where ever possible.

The whole system needs reforming. Everything. Its like a zoo. I wish the PL werent so self-serving.

 

 

 

[AnotherDerbyFan]

14 hours ago, AnAstonVillafan said:

We did sell players. Good players. Personally I was gutted to see Jordan Amavi and Jordan Veretout leave. Idrissa Gueye left for a third of his value. He will play in the Champions League semi-final soon. Ciaran Clark, Adama Traore, Ashley Westwood , Jordan Ayew among others.

They had to be replaced, and we weren't gonna do it with kids. You are always saying , sell, sell, sell but we are down to the bones after that.
I did disagree with the 2016 spending spree though. Reckless. Without the loans in 2018 we're down to nothing. I know that cutbacks where forthcoming. There had been cuts and the axe was going to swing harder. Purslow did not expect promotion that year.

True, you did sell a number of players for a combined c£40m. But, You spent almost double that replacing them! You paid fees for 16 players (plus another on loan), including £30m on 3 forwards.

Given you named 39 different players in the matchday squad, I have doubts that you needed to spend £80m recruiting 17 players.

[AnAstonVillafan]

On 16/04/2021 at 12:04, AnotherDerbyFan said:

True, you did sell a number of players for a combined c£40m. But, You spent almost double that replacing them! You paid fees for 16 players (plus another on loan), including £30m on 3 forwards.

Given you named 39 different players in the matchday squad, I have doubts that you needed to spend £80m recruiting 17 players.

I was not happy with the 2016 spending. It was reckless, and there was an air of panic and arrogance about it.

We spent far too much money.

[Mr Popodopolous]

Had a bit of a look at the accounts earlier. Talking Consolidated- NSWE UK.

In a little more depth now but some of these figures are a bit guesstimate.

Once you discount the bit of tax back- and that is normal because FFP/P&S is Profit or Loss Before Tax.

£99,452,000 LOSS

I estimate their Allowable Costs to have been around £15m.

However that's not the whole story.

You can put down to Covid £36.1m of Revenue to be put into 2020/21- and by their own estimates the net Covid Impact season just gone was £11.1m. (Refunds, lost Revenue and partial rebate).

Also £3m of Rebate to be put into

£99.452m-£15m- £11.1m-£36.1m=P&S/FFP Loss of £37.252m- as a newly Promoted side!?

Had it been the usual 3 years to 2019/20, then they would by my early estimates be £7-8m over.

Had they come straight back down, that would have been very interesting indeed- the EFL would have been within rights to set a budget from an FFP pov IMO.

Couple of other interesting Notes:

Quote

"Other Operating Income"

£3,186,000

Of that, £2,881,000 appears to be "Income from compensation deed related to freehold land"- HS2? That's the third year that entry has appeared in the Accounts, 3rd year in succession. Maybe 2017/18 was another bit of Freehold Land/Fixed Asset?

£305k in R&D Tax Credit- given P&S/FFP is Profit/Loss Before Tax, as a Taxation related matter should this bit be adjusted out with respect to FFP?

The Operating Lease arrangements- these remain unchanged but this note caught my eye...

Quote

At the year end, the Company had loans receivable of £56,700,000 (2019: £56,700,000) due from NSWE Stadium Ltd, a company with common ultimate beneficial ownership. The Group paid rent of £2,600,000 to NSWE Stadium Limited (2019:  £Nil) and received interest from NSWE Stadium Limited of £793,000 (2019: £Nil).

Now this is interesting for a few reasons.

As per FRS 102, Loans Receivable to be put through P&L at Fair Value have to be paid within 12 months. The Transaction was in May 2019. Surely has to be to count as a Current Asset- unless the Standards have changed?

As for the Interest Payment- seems as if Aston Villa/NSWE UK/NSWE SCS maybe have made a loan of £56.7m and in exchange got Villa Park- they are paying Aston Villa interest for this though??

Loan to NSWE Stadium Limited- £56.7m

In lieu of loan- they get ground.

Aston Villa/NSWE UK pay Rent to NSWE Stadium Limited...

Interest on the loan though? Unless it's discounted market rate of interest paid back as set against Rent?

That said it's a while since I've looked at Loans Receivable- but something doesn't seem right there- at least from a P&S context.

Oh yeah, the bit I forgot to add- assuming all the same in PL- the rolling up of this and last season, the averaging- and the exclusion of Covid Costs- by dint of staying up, by that formula the max P&S loss is £72m...had they dropped however, I make it £55.5m!

As for clubs- not just Aston Villa, seen it with a few- deferring income into next season due to Accounting dates vs say TV distribution to a revised season overlapping- absolutely fine so long as it's not double counted!

Either:

1. You disregard the Revenue in full this year, and feel the benefit in full next year- so you add back the £36.1m as it'll be there in full next year.
2. You accept the Revenue in full this year and disregard next year.
3. Maybe for FFP purposes and given it's rolled up anyway, accept 50% this and 50% next.

What cannot happen though is accept it as a Covid deduction this year and accept it in full next year- that would be, and seems like double counting.

[Mr Popodopolous]

Edit.

Not gonna bother getting into a row with another forum.

Already mentioned many of my points in varied ways.

[Mr Popodopolous]

Bit more on it, I do wonder if they require further investigation by the EFL.

Given that the company who technically owned Villa Park were Aston Villa Limited, even if it was in the Consolidated Accounts.

Feels like 2.18 could be relevant here.

Or 2.21.

2019 ones had the same policy for Financial Instruments but nothing on Debtors.

Aston Villa had the same Accounting Policies for Financial Assets...Villa Park sale and leaseback looks like maybe it's filtered into this a bit.