Villa's finances and FFP

[Delta]

3 minutes ago, Portland Bill said:

So, why do you think the stewards at Hillsborough are more conscious of safety than elsewhere....................

I don't think they are - Nor should they be.  Safety is of paramount importance and should be equal at every ground in the country.

However, that wasn't my point. I was stating (imo) that the madness that was going on downstairs could have been eased by allowing people into the ground at the first entrance and then walking across to their seats.  It was absolute mayhem downstairs with flows of people trying to move in both directions.  The stand is extremely outdated.  I don't see how safety would have been compromised by allowing people to walk through rows of seats in order to ease the congestion (and potential safety hazard) of an overcrowded concourse.  

Anyway - Your point is pedantic designed at petty point scoring and exactly the reason that this thread has descended. 

[Harry]

17 hours ago, Delta said:

Pops - You whipped yourself up into a frenzy regarding Villa for many, many months - Probably around 3 years.

It was probably only less than 10 months ago that the penny dropped for you that we had the option of the ground sale.  Prior to that, we'd been tried in your kangaroo court and found guilty.

We were never in breach of FFP because the people who mattered always knew that the ground sale was going to take place.  It even allowed us a few quid to spend in January 2019, as you've pointed out.

Even now, you seem to be holding onto some faint hope that the ground sale figure will be challenged.  Let it go pal - The figures match up and that is the end of it.

You are a funny one Delta aren’t you. 
You spent way above your means and gambled everything on promotion but because you then sold your ground you managed to stay within the financial regulations. 
You’ve managed to stay within the regs, by simple fact that you’ve sold your home. 
I don’t think that’s anything to go shouting about. 
Strange boy. 

[Mr Popodopolous]

1 hour ago, Delta said:

It's because he is unable/unwilling to look at the situation objectively.  He is constantly looking to find faults despite being unaware of the overall situation.

Regarding being "legally correct" - There is no middle ground. You either are or you aren't.  Villa knew all along that there was an option to sell an asset.  The amount of money now due in rent makes the transaction an excellent business deal for both parties.  I've asked before but I'll ask again: How does it compare with what you pay for your ground?  It is not my problem that you all only discovered the ground sale option at the 11th hour.  You've somehow convinced yourselves that we stumbled on a loophole whereas in reality, it was a calculated transaction that was probably in place for years.

The valuation swings between cost/value and categorisation are curious. Check many other clubs accounts, I've not seen anything like it.

Does it now- only there's no length of lease stated...how would you know this one...The accounts states the rent due but does not state the length or anything close to. The UEFA regs as stated would kill this kind of transaction stone dead for FFP purposes.

Well I'm interested in the timings- why was it sold so late in the financial year then, with respect to the entries at CH- why not do it in say February, or before- and deals can be in place for sale before a transaction takes place but it seemed really quite timely.

In place for years...well I question whether Xia had it in place given he nearly ran you into admin or worse but maybe- NSWE Stadium Ltd was set up in summer 2017 after all, as a shell company.

Make no mistake, clubs, the EFL are and will be out for blood on this, clubs who have complied. I mean the EFL are now they're under new management in particular- Harvey clearly had little issue with questionable practices, if you look at the sort of shit he let go.

@Davefevs Certainly he did. Old regs specifically excluded this I'm quite sure, but it changed in 2016 for reasons unknown and at a specific time unknown- possibly just changed when the new regs switched from the old.

56 minutes ago, Delta said:

Pops - I have not thrown my toys out.  In fact it was only a couple of days ago that I had to point you in the right direction regarding the ground payment/cash injection from the owners.  The day before, I had to show you that the ground was listed as an investment property.  I had, had the benefit of reading the accounts for about an hour at that point.  You appear to have been trawling over them on an almost daily basis for 12 months.

I'm not sure what argument you think you've proved because you have been WRONG all the way through.

At the time of the Birmingham case, when you suggested arbitration, you weren't even aware that they had been under a soft embargo.  Like most of your posts, you posted first and discovered the facts afterwards.  You've done it all the way through the Villa thread.  Had you known at the outset (rather than last May) that we had a £36m cushion from the ground sale, would you still have made your silly claim that we should have sold Grealish for £3m because every penny goes towards bringing us back in line with FFP.

Like a lot of other Villa fans, I've read your posts with amusement for a long time.  I joined to correct you and in further displays of ignorance, you have convinced yourself that I don't know what is going on.  You have no argument to disprove because it has been disproved - Still you continue, hoping for silly straws to be clutched like a ground revaluation.  I keep on telling you - Let it go.  When a team like Villa fall into the Championship, they will always have an unfair advantage on their rivals - The training facilities on offer, the ground, the amount of fans who watch us, the wages, the spotlight, the history etc, etc.  No doubt those facts will be deemed as arrogance as well by the deluded masses on here.

Tbh, cash injection- I was pondering whether there might be but then regardless of yourself I came to the conclusion that there wouldn't be.

Investment property is a curious classification. All perhaps legal under FRS 102 but it was classed at Fair Value in 2016 and 2017 was it not. FAIR VALUE, how did this swing so much on reclassification in 2017/18 accounts?

Point to the FRS 102 regulation that states that LOANS-NBV classed as profit is a correct accounting treatment. There's nothing in the EFL FFP regs on this one as in nothing to prove or disprove it either way, the stadium is/was paid for in Other Loans Receivable- you seem very touchy I must say. LOANS I have an issue with this classing as profit, maybe the EFL could shed some light, god knows their regs don't.

According to IAS 40, Investment Property- well have a read of it, it's interesting.Transfers to or from investment property classification

Quote

Transfers to, or from, investment property should only be made when there is a change in use, evidenced by one or more of the following: [IAS 40.57 (note that this list was changed from an exhaustive list to an non-exhaustive list of examples by Transfers of Investment Property in December 2016 effective 1 January 2018) ]

commencement of owner-occupation (transfer from investment property to owner-occupied property)

 

commencement of development with a view to sale (transfer from investment property to inventories)

 

end of owner-occupation (transfer from owner-occupied property to investment property)

 

commencement of an operating lease to another party (transfer from inventories to investment property)

 

end of construction or development (transfer from property in the course of construction/development to investment property

Transfers to, or from, investment property should only be made when there is a change in use, evidenced by one or more of the following: [IAS 40.57 (note that this list was changed from an exhaustive list to an non-exhaustive list of examples by Transfers of Investment Property in December 2016 effective 1 January 2018) ]

• commencement of owner-occupation (transfer from investment property to owner-occupied property)
•  
• commencement of development with a view to sale (transfer from investment property to inventories)
•  
• end of owner-occupation (transfer from owner-occupied property to investment property)
•  
• commencement of an operating lease to another party (transfer from inventories to investment property)
•  
• end of construction or development (transfer from property in the course of construction/development to investment property

Which of these categories did Villa Park etc fit when reclassifying it from Investment to Tangible Assets? Particularly Villa Park however. Was it rented under Lerner or owner occupied- 1) Is the only one that makes early sense.

https://www.iasplus.com/en/standards/ias/ias40

Who does Neil Philpott support- any ideas?  On a serious note, does he- he's from Birmingham I believe.

The sense of entitlement of a portion of fans is quite something- I read your forum, whinging about FFP, saying it was restricting you- cognitive dissonance or blindness is hilarious.  Maybe I'll let it go, maybe but one or two things are not fully adding up..more likely that portion of your fans have that same entitlement that they are renowned for- and hiring Purslow fitted that quite well tbh. How many of them truly get FFP I wonder.

Without the loophole you'd have been snookered- UEFA have that loophole still, look it up. Or the UEFA treatment of use of that loophole can bring about a loss on disposal but mainly they just cancel out the profit and negates the point of doing it. I also raise the question as to whether your HS2 income would count as relevant income under UEFA regs but probably are it would- the Villa Park sale most definitely would not however.

As it goes, my initial possible error on the Impairment of 2015/16 was gained from numerous sources- Swiss Ramble, Kieran Maguire- and indeed the Villa forum, the latter I found this morning.

Birmingham to the CAS was in order to try to pull other clubs- such as Derby and Sheffield Wednesday- into the dock to answer for their FFP misdemeanours. I have explained this and referenced a clear example and precedent from that same summer countless times. The Grealish case was possibly for cash flow purposes too, namely when you were in significant issues under Xia. I wish we hadn't fast-tracked that extra instalment for Baker, since 2018 you've been a fairly undeserving club for it

Your club has a pretty odd structure anyway- pretty complex unlike most- perhaps I was mistaken on Aston Villa but I was strongly accurate on Derby, Sheffield Wednesday- said Birmingham were not in the clear. All 3 have been charged or referred to Independent Disciplinary Commissions.

I agree with @Davefevs and @Carey 6 though, you clearly work for the club or have some connection to sources- talking of the rental deal given nothing beyond a shortish period is stated in the accounts, unlike your neighbours where it states £1.25m x 25 years, or Reading where it states £750,000 x 25 years. 

[Ian66]

On 04/03/2020 at 15:51, Delta said:

I'm interested to know what you mean by facilities being non-existant.  Do we not provide away fans with toilets? Bars? Food outlets?  What facilities would you like to see provided?  Or does your claim really translate to no beer being served upstairs?

As for the view, it is better than many grounds in the EFL

Villa also play by the rules btw - This explains why we haven't been punished for breaching any.

Perhaps not quite the ‘facilities’ per se but the concourse upstairs on the away section is a disgrace and an accident waiting to happen,.....a bit of yellow and black tape wrapped round numerous head high (and lower) girders isn’t stopping a cracked skull

[Delta]

6 minutes ago, Ian66 said:

Perhaps not quite the ‘facilities’ per se but the concourse upstairs on the away section is a disgrace and an accident waiting to happen,.....a bit of yellow and black tape wrapped round numerous head high (and lower) girders isn’t stopping a cracked skull

Well H&S seem to think it is OK.

However - I will bow to the superior knowledge of the OTIB forum - Presumably, your fans will boycott that area next time you visit?

[cidered abroad]

23 hours ago, Stortz said:

My favourite part is him calling us obsessed with Villa in his 75th and 76th post on our forum, the season after they left the division we're in.

Self awareness has never been a strong point with that lot tbh. Maybe he keeps it going because he drives past Bristol twice a year on his way to and from Pontins.

Pontins at Birmingham On Sea? The well known holiday resort / retirement home about six miles south of Weston Super Mud for anyone from the West Midlands?

[Delta]

7 minutes ago, cidered abroad said:

Pontins at Birmingham On Sea? The well known holiday resort / retirement home about six miles south of Weston Super Mud for anyone from the West Midlands?

Seriously - Do you really believe this nonsense?  "Villa are cheats" "Prince William influences the EFL" "Brummies holiday in Weston" "Hollis defrauded taxpayers money" blah blah blah.

You really are a very strange bunch.

[BobBobSuperBob]

29 minutes ago, Delta said:

Seriously - Do you really believe this nonsense?  "Villa are cheats" "Prince William influences the EFL" "Brummies holiday in Weston" "Hollis defrauded taxpayers money" blah blah blah.

You really are a very strange bunch.

Back again so soon ?

Thought Schools had lunchtime activities these days rather than let the kids spend their time on the Internet 

Country has gone to the dogs 

[Ian66]

2 hours ago, Delta said:

Well H&S seem to think it is OK.

However - I will bow to the superior knowledge of the OTIB forum - Presumably, your fans will boycott that area next time you visit?

I’m not even a Bristol City fan muppet......but having been to all 92 league grounds I feel well qualified to comment on the upper concourse of the away area of Villa Park.....somewhere you presumably have never been on a match day

[Delta]

3 minutes ago, Ian66 said:

I’m not even a Bristol City fan muppet......but having been to all 92 league grounds I feel well qualified to comment on the upper concourse of the away area of Villa Park.....somewhere you presumably have never been on a match day

Actually I have been there when it was a home area and still sit in that stand today.

I'm sure you do feel qualified.  However, please forgive me for opting to go with what H&S feel.

Oh - And please don't call me a muppet on the internet.  It really bothers me.

[downendcity]

5 minutes ago, Ian66 said:

I’m not even a Bristol City fan muppet......but having been to all 92 league grounds I feel well qualified to comment on the upper concourse of the away area of Villa Park.....somewhere you presumably have never been on a match day

touché!

[Delta]

5 minutes ago, downendcity said:

touché!

Why is it touche?

He's a Wednesday fan - That's the team whose old and decrepit ground I criticised - It's had no improvements done to it since Queen Victoria was on the throne baring a roof on the Kop (the same Kop Villa took over in the 70s)  Furthermore, they are almost as bitter and twisted as you lot are because we dared to ask them to pay the full wages of a player they wanted to loan from us.

[Mr Popodopolous]

One thing is for sure- given that Aston Villa seemingly no longer own their ground, would be a shame if if turned sour and owners turned it into luxury flats/high end housing/mixed business leisure complex- wouldn't it. Because cash flow statement indicates no payment as of yet, so a few years of rent then sell it at the top of the market.

Off to share with...well dunno, St Andrews already has two sides.

A club losing their ground off the back of one of these transactions would do more than any EFL examination of regulations to put fans off the idea!

[Delta]

There's more chance of us buying St Andrews as well.  Be nice to do something with that trophy cabinet room - It's had such little use over the past 100 odd years.

 

[Ian66]

3 hours ago, Delta said:

Why is it touche?

He's a Wednesday fan - That's the team whose old and decrepit ground I criticised - It's had no improvements done to it since Queen Victoria was on the throne baring a roof on the Kop (the same Kop Villa took over in the 70s)  Furthermore, they are almost as bitter and twisted as you lot are because we dared to ask them to pay the full wages of a player they wanted to loan from us.

Oh dear, you really are making a complete fool of yourself....apart from extending and putting a roof on the Kop,, adding a new tier and exec boxes to the south stand and existing the roof on the west stand you’re 100% right 

the only side of the ground that hasn’t changed in my lifetime is the North....and that’s because, despite of its age, it is still the most beautiful stand in British football.

You took the Kop though big boy so I must bow to you 

[Ian66]

13 minutes ago, Delta said:

There's more chance of us buying St Andrews as well.  Be nice to do something with that trophy cabinet room - It's had such little use over the past 100 odd years.

 

Whereas Villa’s in brimming to the edges with all that you’ve won in the current generation

[Mr Popodopolous]

If I'm objective, chances and odds are that Birmingham and maybe Sheffield Wednesday would be the most likely for the ground sale thing to backfire on...sorry @Ian66 but looking from the outside, Chansiri doesn't seem like an owner I'd have enormous confidence in, just  in general.

Also not wholly sure Hillsborough worth £60m.

[Delta]

I'm not wholly sure that the decrepit old dump is worth £60,000

If ever a ground needed bulldozing, it's Hillsborough.

[havanatopia]

10 minutes ago, Ian66 said:

Whereas Villa’s in brimming to the edges with all that you’ve won in the current generation

I do have to say though that the side of Mortimer, Shaw, Morley, Rimmer and especially Withe was pretty special. Beating Bayern in 1982 was the pinnacle. I greatly admired that free flowing football they played. Fabulous stuff. 

Fast forward to that miserable git before the Chinese govt took over and my admiration turned to mild dislike. Now the only non Chinese owned club in the West Midlands is Walsall. What a sorry state. 

If they are found guilty they should have the book thrown at them. 

[Davefevs]

Derby!

[Southport Red]

20 hours ago, Delta said:

 they are almost as bitter and twisted as you lot are because we dared to ask them to pay the full wages of a player they wanted to loan from us.

Are you going to pay the rest of the Kodja fee soon then?

[AnAstonVillafan]

On 06/03/2020 at 18:55, havanatopia said:

I do have to say though that the side of Mortimer, Shaw, Morley, Rimmer and especially Withe was pretty special. Beating Bayern in 1982 was the pinnacle. I greatly admired that free flowing football they played. Fabulous stuff. 

Fast forward to that miserable git before the Chinese govt took over and my admiration turned to mild dislike. Now the only non Chinese owned club in the West Midlands is Walsall. What a sorry state. 

If they are found guilty they should have the book thrown at them. 

If we are found guilty of what exactly ?

Considering that the club has announced that we are debt free and FFP compliant.

[AnAstonVillafan]

21 hours ago, Southport Red said:

Are you going to pay the rest of the Kodja fee soon then?

The additional £4m would have been payable upon promotion.

[Mr Popodopolous]

36 minutes ago, AnAstonVillafan said:

If we are found guilty of what exactly ?

Considering that the club has announced that we are debt free and FFP compliant.

To me, there is/was a bit of ambiguity in your club statement on finances, with respect to the EFL? 

Truthfully and objectively speaking, I don't know how a payment that takes the form of 'Other Loans' should be treated under FFP. 

Say it had said in the Cash flow '£56.7m' in the relevant category, ie Proceeds on Sale of Tangible Fixed Assets, well certain areas may still be able to debated but cash and payment terms not one. 

Not just in Debtors though but loans...that's fairly unique from what I've seen and I'd be interested to know how FFP regs might account for it.

It seems like a receivable but loans...makes me wonder. 

[Delta]

1 hour ago, Mr Popodopolous said:

To me, there is/was a bit of ambiguity in your club statement on finances, with respect to the EFL? 

Truthfully and objectively speaking, I don't know how a payment that takes the form of 'Other Loans' should be treated under FFP. 

Say it had said in the Cash flow '£56.7m' in the relevant category, ie Proceeds on Sale of Tangible Fixed Assets, well certain areas may still be able to debated but cash and payment terms not one. 

Not just in Debtors though but loans...that's fairly unique from what I've seen and I'd be interested to know how FFP regs might account for it.

It seems like a receivable but loans...makes me wonder. 

There will almost certainly be nothing in the FFP regs.

It is very simple - The club received a loan, the 2 people who loaned the money also happen to own the company who bought the stadium.  It is their gift to determine how that transaction is paid for.  They decided that they would like it paid by offsetting it against the loan.  

Don't beat yourself up Pops - This is just another one of your desperate attempts at clutching at straws.

[Mr Popodopolous]

1 hour ago, Delta said:

There will almost certainly be nothing in the FFP regs.

It is very simple - The club received a loan, the 2 people who loaned the money also happen to own the company who bought the stadium.  It is their gift to determine how that transaction is paid for.  They decided that they would like it paid by offsetting it against the loan.  

Don't beat yourself up Pops - This is just another one of your desperate attempts at clutching at straws.

It's pretty unorthodox tbh, by football finance standards.

In accounting terms yes, in FFP terms? I dunno...a normal business environment isn't exactly the same as FFP related adjustments, inclusions and exclusions show. Easiest one to pinpoint is that tax losses and credits are excluded under FFP.

QPR's debt write off in 2013/14 was outside of the scope of FFP but alright for accounting practice, some might say? UEFA have the right idea on stadium/fixed asset sale profits btw. As you may well have found out had you won the Carabao Cup- just simply for a stadium sale profit, it doesn't count- think there could be two exceptions in terms of fixed asset profit under FFP- you'd have to read in depth but deals we've seen in the Championship wouldn't fall under that category. UEFA have stronger regulations you see.

How they might have judged HS2 stuff as well, I wonder though that's clearly more legit. That's also infrastructure related income in a sense but much more likely they'd approve it, UEFA I mean. They have a category called relevant income...very detailed. very strong regulations.

Loan received, offset against loan and get stadium in exchange. I'm unsure how FFP would treat this as far as the EFL go. Should this be classed as relevant income?

Relevant income aside, c) and e) appear that they might have relevance here.

Quote

c) accrual basis for accounting;

Yep,  revenue when earned.

OTOH, e) possibly contradicts elements of this.

Quote

e) no offsetting of assets and liabilities or income and expenses.

Different accounting standards maybe?

God knows why the EFL's lack such detail and clarity, with respect to such transactions.

Quote

h) Excess proceeds on disposal of tangible fixed assets

The profit on disposal of tangible fixed assets (including, but not limited to, a club’s stadium and training facilities) in a reporting period must be excluded from the break-even result with the following two exceptions:

i) If a tangible fixed asset other than a stadium or training facilities is not being replaced, then the profit on disposal recognised in the income statement can be taken into account as a relevant income up to:

 the difference between the proceeds on disposal and the historical cost of the asset which was recognised as a tangible fixed asset in the financial statements of the reporting entity;

ii) If a club demonstrates that it is replacing a sold fixed asset, then the profit on disposal recognised in the income statement can be taken into account as a relevant income up to:

 the difference between the proceeds on disposal and the full cost of the replacement asset which is recognised, or to be recognised, as a tangible fixed asset in the financial statements of the reporting entity;

 the difference between the proceeds on disposal and the present value of 50 years’ minimum lease payments in respect of the replacement asset to be used by the club under a lease/rental arrangement.

Literally pointless at best to enter into such arrangements for FFP/P&S purposes in these scenarios.

[Delta]

You can't have it both ways though.

A cash injection was needed so was forthcoming.

The people who injected the cash didn't really want the money back but FFP dictated that they had to have it - The alternative being financial penalties.  In order to  comply with FFP, an asset was offset against the loan.

[Mr Popodopolous]

Reading the UEFA Club Licensing Toolkit and it's so damn detailed.

http://www.jalgpall.ee/docs/EN-FFP_Toolkit-2019.pdf

This is basically what clubs have to submit I believe. I say have to submit, clearly it includes all of the explanation but that version of FFP if applied correctly, wouldn't be all that easy to work around.

That aside, had Aston Villa sold it to a Bank, a financial institution, a Property Management company,  a commercial property company and so on, would they have got £56.7m  for a sale and leaseback for Villa Park- would any of the clubs have received what they did in fact? The low prices for Birmingham and Reading make me think maybe in their case, but even they weren't genuinely arms length.

That is an arms length transaction. Quite hard to measure Fair Value otherwise, or can be.

FFP gives out more than financial penalties if non compliant btw @Delta so I'm not fully sure of that reference point.

Asset offset vs loan...think it's a new area for FFP and I wonder how it's treated in accounting and FFP terms in this context.

Loan is from owners to NSWE Stadium, or NSWE UK/AVL to NSWE Stadium or from owners to and via club/AVL to NSWE Stadium?

[havanatopia]

On 07/03/2020 at 18:17, Davefevs said:

Derby!

Some pretty expensive computers there. 4 million wow.. sounds like a 1970's main frame.

[Delta]

4 hours ago, Mr Popodopolous said:

Reading the UEFA Club Licensing Toolkit and it's so damn detailed.

http://www.jalgpall.ee/docs/EN-FFP_Toolkit-2019.pdf

This is basically what clubs have to submit I believe. I say have to submit, clearly it includes all of the explanation but that version of FFP if applied correctly, wouldn't be all that easy to work around.

That aside, had Aston Villa sold it to a Bank, a financial institution, a Property Management company,  a commercial property company and so on, would they have got £56.7m  for a sale and leaseback for Villa Park- would any of the clubs have received what they did in fact? The low prices for Birmingham and Reading make me think maybe in their case, but even they weren't genuinely arms length.

That is an arms length transaction. Quite hard to measure Fair Value otherwise, or can be.

FFP gives out more than financial penalties if non compliant btw @Delta so I'm not fully sure of that reference point.

Asset offset vs loan...think it's a new area for FFP and I wonder how it's treated in accounting and FFP terms in this context.

Loan is from owners to NSWE Stadium, or NSWE UK/AVL to NSWE Stadium or from owners to and via club/AVL to NSWE Stadium?

All EFL sanctions ultimately mean the penalty is financial.

If FFP want to split hairs over a perfectly legitimate transaction then people will simply carry out the transaction accordingly.  All you are really doing is inconveniencing individuals, not the clubs with your witch hunt.  I fail to see how any changes in this area help FFP because as I said, people will just ensure the transactions conform to whatever is prescribed.