Delta
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Posts posted by Delta
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14 minutes ago, Davefevs said:
One of the things a couple of us have questioned is “Sean Harvey”. By that I mean we wonder whether club owners have spoken to him about their plans, he’s said “yes, that’s fine”, but not formally agreed by the EFL.
There have been a few quotes from Villa, Derby, etc (interestingly all the clubs now being questioned officially, in Villa’s case the PL) saying the EFL agreed it, but never (to my understanding) being able to get the actual EFL to confirm in writing. Hence our thinking that Sean said it was ok, but that he may have been operating out of his jurisdiction and therefore giving a bum steer. If that’s the case, it’s probably a bigger mess.
Think on either side it’s all or nothing.
I would assume that Purslow knew what he was doing given that he sat on the original FFP committee. That said, it is worrying that others appear to have spoken with Harvey. You would think they all speak with each other about these matters.
The fact that Villa were never given a soft embargo suggests (to me anyway) that they were always in communication and compliant with the EFL and their regulations.
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11 minutes ago, Mr Popodopolous said:
In which case, what was the £44.8m Impairment all about in 2015/16? Of Tangible Fixed Assets...an Impairment means that a Fixed Asset is written down to its recoverable amount- Recoverable amount= the Greater of Value-in-use or Fair Value.
If the Impairment was not necessarily justified, then the profit on the transaction is open to question- and I agree, relegation does not have a tendency to slash assets in that manner- no other club that I can think of has done anything similar! Maybe a small Impairment of 1-2% but never anything like that.
The point is though that with an Impairment such as this, the asset should not be carried at a greater amount than its Recoverable Amount- it's all there in Accounting Standards and given that Tangible Assets in 2015/16 were listed as being £41-42m in Total...£56.7m for one of them is...interesting?
May all be fine, but OTOH it is also possible that either the price needs looking at afresh, the valuation method- or the new Book Value to determine the new £56.7m-X=Profit. May all be fine but definitely needs thorough Investigation. That's all I'm saying...thorough investigation and stress testing.
They can sell it to who they like provided it's Fair value/market value- but has the correct valuation method been chosen? That's another issue to consider- could be part of the EFL revision of Pride Park...down from £81.1m to £50m I believe! Also 2 weeks or so before the end of the Reporting Period in terms of the removal of NSWE Stadium Limited from the group and putting them as the new controlling party,- see the below post.
Also even if it's fine under Accounting terms, the FFP reg in question could still come into play- consideration of whether an attempt has been made to circumvent the objectives of FFP!
How come the PL seem not to have signed off the transaction yet if all okay? Do we know that EFL approval was sought and provided?
So many unknown factors in play here! Happy to go with Innocent until proven guilty...
I have no idea what the £44.8m included but Villa own several pieces of land and bizarrely, properties. The training ground alone covers several acres and is worth a pretty penny. In the 4 years between 2015 and 2019, the value of football clubs has increased in any case. Look at the size of the transfer fees in the Championship for 2015-2016 for example and then look at them for 2019-2020 (Webster being a prime example) TV money has increased considerably and this has a domino effect, filtering through to tangible assets. What may have been worth £44m in 2016 will undoubtedly be worth considerably more in 2019.
Not too bothered about the PL signing off the transaction - Not sure exactly what they could find wrong? West Ham sold their ground recently and benefited from a free hand out. Subsequently, tickets are almost given away and their fan base has almost doubled overnight. If that was acceptable then they're hardly likely to gripe over a sale that took place whilst Villa were not even members if the PL.
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1 hour ago, downendcity said:
....but this is the core of the problem.
The whole ethos of ffp is that a club's day to day financial management enables it to stay within the financial parameters set down within the rules i.e. it lives within it's financial means and doesn't have to rely on metaphorically finding a few million down the back of the sofa at the 11th hour to bail itself out. We all know that it was the EFL's cock up when drafting the new rules that left the inadvertent loophole that enabled clubs to sell their stadia. You previously referred to the number of clubs that voted for the new rules, but I wonder whether the majority realised this loophole existed when voting, as sale of stadia to a related third party was not allowed under the previous rules?
It's a bit like a couple living a lifestyle beyond their incomes, but being secure in the knowledge that at the end of 3 years of financial reckless living they can "balance the books " by selling their home to one of their children to raise the money to pay off loans and credit cards. The problem is that they don't own the home anymore, so won't be able to do the same thing when they next get into financial difficulty.
The other factor is your statement that " the sale figure was most likely determined by how much was needed to ensure the club was compliant". Fair value isn't determined by the amount the club needed to avoid ffp penalties, it is based on proper valuation principles,. This point has been debated on here in relation to Derby's sale of Pride Park. The crucial factor is that there is no established and active market in football stadium sales so no comparative evidence of values so it gives a lot of leeway, even if club's appoint professionally qualified and independent valuers.
That you only just scraped in by hitting form late in the season thanks to Grealish's return from injury, misses the point completely. Ffp runs over a rolling 3 year cycle and even if the first 2 years were under different ownership, if the club operated outside the ffp limits over those 3 years it gained an advantage over every other club that had managed it's finances in order to comply. Notwithstanding the problems of shifting players out of the club, lets not forget that Villa had 3 years notice of the ffp deadline last March and during those 3 years had the benefit ( and advantage) of parachute payments to make the transition less painful. That Xia chose to use parachute payments as a war chest to boost Villa's promotion chances, is the reason for the problems that followed. Had promotion been achieved within the first 2 years, as was expected, all the financial problems would have been resolved in an instance. It wasn't and predicated all that followed , including the sale of VP where " the sale figure was most likely determined by how much was needed to ensure the club was compliant"
Again, QED.
Villa did not make up the rules - We simply adhered to them. It is irrelevant if we "found a few million down the back of the sofa" if it was permitted. We had the ability to lose £50 million lawfully and within the parameters of EFL regulations. Our situation is nothing like a couple living beyond their means because our owners could afford the comparative drop in the ocean (to them) that was required to keep the club competitive. You yourselves appear to benefit from 3rd party stadium ownership. I don't see the difference.
It was actually 1 year of reckless living, not 3.
I very much doubt that the majority of owners did not realise what they were agreeing to.
Regarding the stadium - It was owned by NSWE. They can sell it to who they like for whatever they like. The fact that it was probably sold for less than its market value is also irrelevant. The only time the EFL can comment/intervene is if it was sold for more than its market value.
Mr P - VP was/is a tangible asset but its value would not depreciate greatly by change of circumstances of the club ie relegation. It would still host football matches, still had the pub & leisure centre and also the ability to host other events like pop concerts, rugby matches etc, as I believe your stadium does. There are also regular stadium tours. Furthemore, the hospitality areas are used during the week for conferences, business seminars etc as well as being hired out for functions such as weddings. None of that would change with relegation.
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Firstly, apologies. It was Lerner who paid £120 million for the club. Xia got it for around£60 million (if I recall correctly) with, as you say, a clause if promotion was achieved within 3 years.
I don't think the PL loss had any impact whatsoever on the value of VP. The club's value may have dropped but the stadium is a separate entity.
We could not have sold players without offers coming in and players being willing to move. It is not that simple. We were likely one of the highest payers in the Championship with most aging players on good contracts. It's noteworthy that upon our promotion ;last year, something like 10 players left the club for nothing, either by way of mutual agreement or because their contracts had run down. In the final days of Xia, every player was available for transfer but as I say, without bids, nothing could be done. Apart from Grealish and Chester (who was linked to Stoke) nobody really had a resale value of note. Furthermore, it would appear that the EFL did not instruct Villa to make any sales, as has been the case in other similar issues.
It was only once the club was sold that we were able to buy a couple of players and bring in loans. This would have certainly been after obtaining the green light from the EFL to do so. I know it makes good reading to claim that Villa were a law unto themselves, our fans are arrogant, Prince William had clout etc, etc but all that is rather silly. The bottom line is that discussions would have taken place that summer and even at that point, the sale of VP would have been discussed and factored in.
I am confident that we are compliant because the owners would not have risked a points deduction and potential hefty fine by blithely carrying on in the transfer market unless cleared to do so by the EFL. The sale of VP was a fair price when factoring in the other buildings/businesses that form part of the estate. The ground is iconic with a wide array of modern hospitality areas. I would imagine (and this is just me) that the sale figure was most likely determined by how much was needed to ensure the club was compliant. During that summer, promotion looked a distant goal. We only really scraped it, hitting form for the last 3 months of the season, thanks almost entirely to the return of Grealish after injury.
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5 minutes ago, GreedyHarry said:
No, therein dies not lie the gamble. You either break the rules or you don’t. A bit like when people bemoan their bad luck for being caught speeding, or shoplifting, or any other offence.
Them’s the rules. Stick by them and even when you burst out of their jurisdiction you need not fear crashing back down to the Championship
No rules have been broken. The (legitimate) sale of the ground means that despite extremely difficult circumstances, Villa have operated within the realms of FFP, pursuant to the regulations.
If you want to keep on banging on about regulations, you have to accept that at least 18/24 EFL clubs voted to include an ability for clubs to sell their own stadiums. Hence it being permitted. Your only hope (or straw to clutch at) is that VP was over valued. I think you will find that if anything, it was under valued.
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7 minutes ago, downendcity said:
A lot of fans make the mistake of thinking that ffp was introduced to create a level playing field, but as you point out it was indeed introduced to prevent reckless owners spending beyond a club's means and to prevent the sort of situation that developed following Pompey's relegation from the Premier League.
The crucial issue with ffp is that it matters not the ability of an owner(s) to financial support his/her club, but that all clubs have "signed up" to the financial rules. You say that City fans are hoping Villa get punished in some way because of your acquisition of Kodjia. That is not the issue, not least because most City fans could see that Kodjia wanted away and were frankly amazed by the amount Villa paid to sign him.
The real issue is that City, along with the majority of Championship clubs, have made major changes to their overall strategy and finances in order to comply with the requirements of ffp, and in particular the revised rules, even though it compromised their competitiveness on the pitch - over the last 3 seasons we have continually had to sell our best players in order to meet ffp requirements. However, at the same time it seems that some clubs have continued to operate on the basis of maximising on field competitiveness, even if it compromised ffp limits. After the sale of Pride Park became public knowledge, Derby's owner commented that they had pushed the financial limits because otherwise they would not have been competitive!
From the outside looking in, it appeared that Villa made a concerted effort to return quickly to the premier league following relegation, and with the benefit of parachute payments ( already going a substantial financial advantage over most championship clubs) were able to retain or bring in players to maintain a strong squad. Correct me if I am wrong, but I read that Villa ( like West Brom) borrowed against the third year's parachute payments in the second season back in the championship. If so, then you were really pushing the boat out financially and that would have been a major risk agains the upcoming ffp assessment.
As for the stadium " sale", as with Derby's much publicised situation, there will be much debate on the valuation and whether it represented fair value, but the simpler question I have raised when discussing Derby's situation ( and is applicable to every club that has done the same) is why would any club "sell" it's ground, other than it being the only option left to them to avoid an ffp breach and the punitive sanctions now available to the EFL. Had you breached ffp when assessed in March last season ( which might have been the case without he profit from the sale of Villa Park) then a points deduction would almost certainly have kept you out of the play offs ( as it would Derby in the same situation). Guess which club would have into 6th place instead?
In your last paragraph you ask " how often does throwing money at a project work?". Given all I've mentioned above and given that each Saturday we all see Villa on MOTD, I think we would answer Q.E.D.
I don't know if you've read my other posts but at the risk of repeating myself, throwing money at the project did not work for Villa and ultimately, we were dragged up almost single handedly by a home grown player who by the grace of God did not leave in the turbulent summer of 2018. Our entire play off final team cost less than £10 million.
I'm not quite sure exactly what Villa have done to incur the wrath of so many on here but presumed that it was Kodjia as apart from that, we've never had any interaction. Villa paid the going rate for Kodjia and it's worth noting that in the January of that season, we also sold 2 forwards who were with us in the PL (both returning to the PL). These sales bought in more money than we paid out for Kodjia.
For a team like Villa coming down, it is always going to be difficult to adjust initially and when you factor in the wages we were committed to paying Agbonlahor and Richards (£5 million a year), we were always going to be up against it. Many of the PL players wanted out as their wages had been halved but we couldn't shift them all in 1 window - It took 3 (14 months).
Yes, Villa borrowed heavily, often calling in transfer fees early for reduced payments. The fans were told that there was a 2 year project and if that failed, there was a plan B. In reality there was no plan B and our owner literally gambled with our club's future. We didn't make those decisions and the person responsible bolted - Leaving us to sink or swim. Luckily, we were saved by 2 tremendous owners who deserve support from the EFl for potentially saving a club. They certainly don't need punishing - What message would that send out?
As for VP. Again, I repeat myself. There is a prestigous pub at one end and a leisure centre at the other. The hospitality options are among the best in the country. If anything the ground was undervalued.
Bottom line is that Villa overspent. The ground sale meant that we have operated within the realms of FFP so will not be facing any sanctions now or in the future.
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18 minutes ago, Mr Popodopolous said:
Grealish largely yes but also spending beyond your means.
Villa Park is the one valuation of the 5 I struggle with. Madejski Stadium and St Andrews? Undervalued if anything IMO. Hillsborough and Pride Park overpriced surely.
Villa Park? On one hand it seems in line but how are we of you factoring in the nearly £45m Impairment which happened during your relegation season!
How is, how was that justified? Certainly it raises eyebrows as most relegated sides don't slash 40-45% off the book value? Overall ie before not after depreciation!
If the impairment not justified or justifiable then that surely impacts the profit on transaction. If it was, then this could impact the sale price.
Was clearly done so that Xia could buy club at a more realistic or affordable/competitive price but justifying it in accounting, and then in layer 2 for FFP? I'm not so sure!
As I said, spending beyond our means was restricted to our first season in the Championship. The second Summer, we spent less than £3 million although we also paid the wages of JT who also joined that season. On the flip side, we got more than that from your good selves for Baker alone. On top of that, we also gained another £10 million in sales (excluding Baker). I have excluded loan fees as we would have both paid out and received these fees.
The following season, we were on the point of points deduction for much of the summer before signing McGinn and Nyland for just over £5 million. Again though, our income from sales was double our outlay on players (£10 million +). We then made another Goalkeeper signing in January for £5 million.
By the time of our play off final against Derby, 4 players were loanees, one player cost nothing as he was part of a cash plus player deal, a further 2 cost nothing as they were home grown, leaving the remaining costing less than £10 million. That is an entire side that cost less than £10 million. How could we have possibly spent less? Especially given that we received more for player sales that season.
The £45 million lost in our relegation season does not really impact FFP because you can make a higher loss in the PL. Xia paid about £120 million for Villa. Even today with increased revenues, not many, if any Championship sides would fetch that.
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5 minutes ago, GreedyHarry said:
Yes I want to see us in The Premiership, but not if it means the future financial stability of our club is compromised. Our previous experience of that lives at the forefront of my mind at least. I guess many others feel the same, which is why many feel sticking within FFP is the fairest way of going about our business. Although ultimately that decision lies with our owner.
Therein lies the gamble. Not knowing what your owner could/would be prepared to risk throwing it at a promotion challenge, I can't comment. However, should you manage promotion, your income would increase many fold, placing your previous gambled money as a good investment. (Not overlooking the fact that you'd qualify for parachute payments if you went back down).
My own club were at the point where we couldn't pay bills, couldn't sign players and were looking at all players of value leaving just 18 months ago due to the gamble failing. However - The person responsible for the gamble was never going to suffer as he would just walk away, leaving us in the mire - How did FFP protect Villa?
Your team would struggle in the PL - Look at the impact Reid, Bryan and to a sesser extent Webster (who I read being criticised by Brighton fans recently). The gap is bigger than it's ever been and is only going one way. Somehow, Championship sides need to be able to compete otherwise it will just go the way of the big 3 or 4 in the PL.
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1 minute ago, Monkeh said:
In the last 5 maybe 10 years most teams don’t come back down they stay up for a number of seasons
In the last 6, the play off winners have all come back down. Wolves had gone way over FFP and would also have been in trouble if their gamble backfired. Newcastle continued to operate as a PL club. Bournemouth & Leicester also operated outside of the parameters of FFP. That leaves Brighton, Burnley & Watford who are still in the PL.
However, since the big money started coming in 3 seasons ago, Hull, Boro, Fulham, Cardiff and Huddersfield have all come back down. This season add Norwich and one of Brighton, Villa or Bournemouth.
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Another point worth making/asking is do Championship sides actually want to play in the PL?
Currently, the gulf is so great that most teams end up coming straight back down.
Take Bournemouth for example. Their turnover last season was more than twice that of Villa's - This being achieved on gates of less than 12,000. This has been the case for the past 3 seasons so times that wealth by 3. Even with a summer spend of way over £100,000,000 (by Villa), Bournemouth are still above Villa in the league.
I would imagine that most of you hold high hopes of gaining promotion via the play offs this season? The overwhelming chances are that should you achieve this, you would go back down the following season, probably finishing bottom. Where's the fun in that? It is certainly short lived. All hail the saving grace though - You gained promotion whilst not losing more than £13,000,000 per season.
My feeling is that instead of beating this tireless FFP drum constantly, Championship clubs ought to be focusing on ways of giving their sides a fighting chance should promotion be achieved.
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Surely the 18/24 must have voted in favour of the "ground loophole" in the first place?
With regards to my own team (Villa), it is worth noting that within the ground area is a 19th century pub that is a listed building and had over £4 million spent on it around 10- 15 years ago. Furthermore, at the other end is a large leisure centre that also adds value to the overall estate. I know that many on here are hoping that Villa get punished in some way (a lot probably borne out of our acquisition of Kodjia) but I really think you will end up disappointed. The sale was perfectly legitimate and was also for a fair market value.
FFP is in place in order to protect clubs from being left in the lurch by unscrupulous owners - It is not in place to ensure that all teams are on an even footing regarding transfers. In our own case, we were owned by a chancer for the first 2 years of our Championship stay. He literally gambled with the club's future. New owners have now stepped in and have steadied the ship. The very principles of FFP should mean that these people should not be penalised for trying to steady a ship that had almost sunk because of the reckless gambling of the previous charlaton owner. It is also worth noting that within the side that beat Derby in last years play off final were 4 loanees, with another on the bench. Apart from the first Championship season, Villa's spending was incredibly modest - Something that is often overlooked. Furthermore, the income from sales over the 3 seasons in question would possibly be higher than the outlay on new players. Certainly, the figures would be close.
It was clear from our January spending that we are currently close to the parameters of FFP but being close does not constitute being over.
Regarding Leeds, I'm sure that they are pro regulations given their owners don't have the financial clout to make a dent in any case.
Ultimately, if a person aquires a football club, he should be free to invest just as he would in any other business. Those who have money don't complain - It's only those who don't who make noise. Look at when clubs are up for sale and how giddy fans get when wealthy arabs are linked to a potential purchase.
For me, far too much is made of FFP and anyway, how many times does actually trowing money at a project work? Obviously Chelsea & Man City have succeeded in the fairly recent past but certainly in Villa's case, the big spending did not procure success. Indeed, were it not for a player who rose from within the youth system (Grealish), we would still be in the Championship today.
The Championship FFP Thread (Merged)
in Football Chat
Posted
On the surface, Birmingham appear to be hard done by. However, none of us know what goes on behind the scenes.
I think we all accept that the EFL intervened 2 years ago and placed them on a soft embargo whilst investigations were completed. The fact that Birmingham ignored this embargo and carried on buying players resulted in their points deduction last season.
I have read (and have no idea of the validity of this claim) that the EFL suggested that Birmingham should sell players in January 2019. Birmingham failed to do so despite several offers on the table for their prize asset Adams (notwithstanding any other offers we don't know about for Jota etc). The fact that Birmingham again appear to have ignored direct requests from the EFL could explain why they are once again under scrutiny.
Part of Birmingham's woes are stemming from the Harry Redknapp period where big money signings and unsustainable wage agreements were a regular occurrence. Jota being a prime example who we acquired for peanuts just so they could offload his wages.