Mr Popodopolous

I've worked out the mistake I made I think- wasn't factoring in Tangible Fixed Assets before Additions, plus was focusing on Tangible Fixed Assets only under the relevant bit for Villa Park, whereas I should've factored in the whole lot at that stage. It goes Acquisition of Subsidiaries at Book Value + Fair Value Adjustment (Provisional)=Provisional Fair Value. Point is that these seem broadly in line or were at the time and there was no broad adjustment, apart from the obvious e.g. Additions, Depreciation- up or down- made until the Impairment.

Will look at Aston Villa and their stadium price or otherwise later, or tomorrow. Ah screw it, why not- have it to hand! Now in fairness, it is consistently, has been consistently, carried at cost it seems BUT the Impairment makes a difference, absolutely. We have to assume there are some reasonably in line calculations with fair value based on what we know because in 2007. As we can see, in 2007 the Fair Value Adjustment on takeover was made- this was the new Value of the Tangible Fixed Assets, however it stated "Provisional Fair Value". There appears to have been no adjustment, in fact the closest from the data we have available that we can see was the Impairment in 2016. As we can see, as of 2006-07, the Fair Value of the Fixed Assets was equal to the Book Value following Revaluation. Actually, it wasn't quite! Maybe that takes into account historical differences in depreciation? Was broadly the same anyway, save for about £600k difference. It is therefore fair to state, IMO that there will be undoubted questions to answer, to be answered- fair to state it at this stage.

For comparison purposes, the year before the sale and leaseback was meant to have occurred- still using the 2014 revalued figure as a starting point... All seems reasonably consistent- and actually does going back to 1990 within certain ranges. Seems like they suddenly started carrying it at cost in 2016! However transitional arrangements between old accounting and FRS 102 or not, I see nothing to justify an automatic upswing- the flip-side is that they were carrying it well below what they should've beem for over 2 decades. I don't see how the two stack up. Because even if that cost figure is the new one, I struggle to see how the value or cost have shifted so much in 4 short years- or was it 5!

In terms of one of the other clubs, ie Sheffield Wednesday, I'm still struggling with the £60m sale price for Hillsborough. Will post some snippets later, from accounts to give context. All I do know is that it was revalued on a Depreciated Replacement Cost basis 2014 at £22.25m. Make of this what you will? Asset inflation in Sheffield must be through the roof? Granted there is/has been a Revaluation Reserve and there were some additions stated at cost, but I still think around £30-35m all told.

The precedent thing might have validity in some areas but in other areas, it's really a new type of case IF there is a breach. If being the real key term. I don't know, because Matt Lawton is a pretty reliable source on these issues- him, John Percy and Matt Hughes seem to have strong contacts either in clubs or at the EFL. Anyway what I think CAN be safely dismissed is the idea that you'd be under a soft embargo but breach it by spending £100m...that would leave the EFL with no choice but to look to impose huge sanctions and I'm sure no club would really chance that. Possibly the Soft Embargo was lifted the day your Registration was officially transferred to the PL- see Golden Share. I was mischief making slightly on the idea that you'd disregard a soft embargo by spending £100m- I don't believe that but I do believe that there may have been one in May 2019, but that it may have been lifted or cleared. Where the Precedent thing would apply is in terms of the sliding scale of points to loss ratio. There is one- you think they wouldn't punish minor breaches? How come they are seeking to dock Birmingham 3 points for the Business Plan issue- granted a minor breach might mean a minor punishment but if you think the EFL would be looking to let say a minor breach go entirely then that wouldn't be the case. It does not necessarily make it look cheap because it was sold to a Related Party and Accounting and valuation rules are applicable- but I see what you are saying, yes. https://pbs.twimg.com/media/D2SEpMeX0AI4h7S.png This appears to be the sliding scale and this is line with what media said- if an adjustment took you into overspend then the EFL WOULD be duty-bound to investigate and charge if necessary. Any breach would surely get a points deduction- how could it not? The question is the size of the breach and whether there are mitigating and aggravating factors.I would also add that based on the Birmingham case, an EFL 'agreed' Business Plan and a loss limit of £13m for the existing season, would be on the table- as it was what Birmingham had last season and part of that might still be in force. You will also be aware that IF you win the Carling Cup, UEFA will have something to say surely about your accounts. Because UEFA rules specifically exclude fixed asset sale transaction profits from their calculations- so a place in Europe would be open to question. As the UEFA 3 year loss limits are €30m plus allowable costs.

You were rumored to have been under a soft embargo in May 2019. That could just have been a hangover from the EFL granted. Window opened before June 1st actually, we sold Kelly mid May 2019 but it has often been June 1st- I assumed it was as well. You were technically a PL side having won the playoffs but the official handover or transfer- it's a formality granted- takes place early June I believe. It's an unanswered question for sure- maybe good, maybe bad, maybe meaningless but if the soft embargo thing is true, well it could've been pre approval of the ground sale. I'd hope the EFL would have tightened up their procedures between Pedersen and May 2019. There could easily be different takes on enforcement- it's a live issue. Just imagine for one minute- and this is clearly a big no surely in reality, that you signed all those players while under a soft embargo? Signed them but the PL didn't carry over the soft embargo...the amount of issues you would be in back in the EFL would be enormous. On a serious note, the jury is out BUT if the ground value adjusted and the FFP figures adjusted accordingly and you found guilty of a breach to May 31st 2019 here is my proposed punishment- as punishments should fit the crime, IF the crime proven of course: The points penalty based on the overspend, so that would be 12 on a sliding scale downwards. Say the overspend is like Birmingham that'd be 7 points. Deliberate overspend as per Birmingham? Arguable but that's another 3 points. One point back for abiding by soft embargo in summer 2018. IF proven, just for the sake of argument, say it's proven that you are guilty, Parachute Payments either docked or removed from the FFP calculations. You'd have benefitted from the season in the PL buit if proven, the Parachute Payments should be off limits, whether in reality or for FFP. Either way that would ensure you don't benefit from them IF you were found guilty. EFL Business Plan perhaps, like Birmingham. Resetting of FFP limits to a £13m limit for the first season back at this level- like Birmingham, it'd have to be set somehow to have a target for 2020/21 IF found guilty. I think that's a fairly broad palette.Oh and it wouldn't reset the clock to zero, merely the excess limits to bring it back to £13m + youth, infrastructure etc. That's my proposal IF found guilty. Number 4 I couldn't see happening though- as big a fine as possible or as close to the Parachute Payments over 2 years would be a reasonable equivalent. Fine would have to count towards FFP though.

https://almajir.net/2018/09/03/editorial-efl-questions/ This is from last year @Delta but it genuinely is worth a read. Al Majir is just one of the sources I use but the truth is that May 2019 you had the takeover and were fine for cash and not yet in breach of FFP- the soft embargo was FFP related in May 2019. The embargo was in summer 2018 as you had the significant cashflow issues...but those cashflow issues were distinct from FFP. Like Bolton in fact- whereas Birmingham had cash but were in FFP trouble. Your 2018 embargo was a registration embargo for the reasons you state- insufficent money to pay bills, think there was something about a tax bill too. Both embargoes but two quite different types and reasons behind them.

There are a few curiosities or unique elements about this case though, regardless of Profit and Loss. It's a bit of a watershed moment, for a few reasons. 1) First genuine test case of a side whose compliance up for debate promoted under the full 3 years of this new system in play. It was really effective from 2016/17. 3 year cycle. Fits perfectly. 2) The 2016 Impairment. How is and was this factored for in the sale price? No other club who have done this had this as a talking point so it's new ground on the Fair Value front. 3) Press talk of a disconnect between PL and EFL. Rules are clear but different views on enforcement? 4) Approval. Was it gained, sought? Was any approval for the mere act, ie sale and leaseback or the price and EFL approved valuation too? 4) Interesting line last May about Aston Villa being in a soft embargo. This throws up a few possibilities ranging from maybe to laughable but here goes: A) Was pure speculation. B) There was one but EFL ratified and ask. C) There was one but that rumoured disconnect meant it wasn't carried over to PL. D) There was one but Aston Villa did a Birmingham on steroids, ignoring it 110%!! E) They miscalculated in a massive way by believing that 'pay the fine' was still the solution so spent accordingly as PL and EFL FFP used to be different, see the QPR debacle! 5) This last bit is surely mischief making but anyway, Purslow miscalculated the harmonisation in the regulations. 6) The EFL gave Aston Villa some bespoke deal due to how close they were to bankruptcy. 7) As we saw with Birmingham, their Projected Accounts submitted in March 2018 showed decent transfer profits. Their real accounts to June 2018 did not...things were reworked and they were dealt with accordingly! What was in Aston Villa's submitted last March? At that time, many clubs were rumoured to be in breach, see Al Majir blog, and he seems reputable, and the EFL were quite happy to try to let clubs back to balance if possible with minimum fuss. Rules of the game have changed significantly since then, the landscape has seen some big shifts. I'd be surprised if the EFL don't have some searching questions if and when Aston Villa return basically. Could even argue duty-bound.

Thank you for a considered and balanced response. Fair- it's still in a bit of hiatus atm I think. Feels a bit like it anyway. Well this is true, unsure why Everton making such losses would give a discounbt but I digress- if anything El Ghazi and Bolasie even if the latter for half a season might be a bit more costly than Snodgrass. It's arguable either way in some respects. This bit I query. If a clubs finances dictate that they need to sell to hit FFP, then that is what they need to do. Like many at this level- the majority in fact. Leeds are a pretty big club...Wood got a major fee, they sold quite big this summer, thinking of it in a 3 year cycle. Doubtless their costs will have stepped up too- Nottingham Forest another example of a big club fallen on hard times who trade- trade maybe a better term. That is some and you get some credit for that, but while I agree you can't necessarily field a youth team, it's important for the integrity of the competition to see the regs adhered to, in real time. For example, if a Projected set of Accounts in March of the existing season shows a forecast overspend with no paper trail of say a stadium sale or more agreeably, player sales pre arranged in the summer...then points docked there and then. T=Existing Season club Projected Accounts, and T-1 and T-2=Actual Published/Received Accounts. If a stadium sale that's different but then the EFL must commission an Independent valuation before the end of the season to get an adjustment in at the earliest if necessary. Needs rigorous real time monitoring...this might be coming into play now but under Harvey, there were significant shortcomings!! Fair enough and thanks- you're clearly a big club and obviously people would to stick up for a club- it is always good to have opposition fans putting the counter view, nothing worse than an echo chamber!

EPL in recent times haven't had a good track record of enforcing punishment or holding clubs to account in any meaningful way- saw an article on it, but maybe that will change with Man City- or indeed the new EFL/PL alignment? Profit on sale is price paid minus Value on Books...it isn't the fee you stick in the books, it's the profit. That profit due to the Impairment is questionable, this is the crux of the issue. Needs full exploration. You may well technically be under but there are a lot of unknowns for you to say that you are in the clear, This is patently incorrect...some of the 'wrong' claims that you have cited by me have come from VILLA pages! Links are there, go read them...the £200m a notable example. Whataboutery. Besides which, we made no financial gain from the sale of AG, this was possibly a corporate restructure. Again though, what has rent got to do with it- I've not even mentioned how much you are or should be paying on Villa Park. Corporate restructure or otherwise, it looks like it was an asset transfer- 2006. Just checked, I say 2006, was in the 2005/06 season- from Bristol City FC Limited to Ashton Gate Limited. No gain, no profit it would seem. Check 2005/06 Bristol City Limited Accounts- it even states the asset transfer in them, if you scroll down to Page 13 of the accounts made up to 31st May 2006 for either, or both of Bristol City FC and Ashton Gate Limited, it's clearly stated. Accounting regs may have allowed for it at that time, it will have been above board but there was no gain, no loss- merely an asset transfer. Imagine in League One had we done that and banked say a £10m profit in 2006...no FFP regs either, we could've run all over League One that year!

What is interesting is what I've seen on Twitter. This is NOT Aston Villa related but info about the FFP stuff. Will try to find the original link later but... Looks as if the Sheffield Wednesday case has concluded, or at least the aspect in which they have challenged the lawfulness side of it. EFL vs Derby at the actual breach level, the actual Commission is ongoing. What is also interesting is that Nick De Marco who seems to be quite prolific in these cases, is representing against the EFL- interesting as he works for Blackstone Chambers- the very company the EFL hired last Autumn as the Investigation developed/progressed. ? Hi @29AR you seem to know about the law, or have done from past postings on here- big company sure but is it normal for lawyers from same ultimate organisation or two different ones to be involved with both sides? Or one to be representing side A- say the club and one to be overseeing the panel? Charles Flint of Blackstone oversaw the Birmingham case for example- think he was the Chairman of the Disciplinary Commission.

What you don't seem to grasp is that your case is perhaps still live, albeit in a state of hiatus- suspended animation. I'd say it's up in the air- just because you have not yet sanctioned rules doesn't mean that Investigations couldn't down the line prove it to be the case. I suspect even a small adjustment to the Villa Park sale and leaseback price could throw up problems, to May 2019 at least.

As far as I can see @Harry it's still not a resolved issue, last I've read on the Aston Villa FFP issue is that the PL haven't yet ratified the sale and leaseback, but obviously that doesn't indicate guilt either. Still a live case though I'm thinking, and given that Impaiment in 2016, I'm really wondering about the sale price, profit etc. As you rightly say, they appear to have been within a very close range. Could an adjustment to the £56.7m for Villa Park tip them into trouble again? Certainly for the 3 years to May 2019. Could even be a case that any adjustment at all is the difference between compliance and overspend. Bigger the adjustment the buffer the overspend, the bigger the issue. Pride Park eg was sold for £81m with an independent valuation commissioned by them though the method or valuer was not stated in 2018 accounts. EFL commissioned valuation came to £49m or £50m. Similarly, Hillsborough at £60m feels overdone. Villa Park at £56.7m, surely must be worth a close look by the EFL especially on their return, whenever that may be.

As promised I have found those two links. https://www.astonvillanewsandviews.co.uk/villa-sell-villa-park-to-themselves-for-56-7-million-why-so-cheap/ This was where it was referenced that they had previously said they were of the view that £200m could be reasonable. Some key snippets below, some clear key snippets bolded. https://www.astonvillanewsandviews.co.uk/thoughts-on-derby-and-are-we-selling-villa-park/ Make of this what you will...the author seems to be very crowing, across their two pieces? For balance, they also state that it's as bent as it gets. They also fail to note that this shell company was actually formed in 2017 and merely moved from the direct group to the direct control of the owners... Clearly though, the first time £200m was sourced by me, was from an Aston Villa related page!

Oh dear, a range of different interpretations let's call them. The £200m for Villa Park speculation was angry and more importantly sourced from an ASTON VILLA fan or related PAGE. I even linked it earlier and I'm happy to do so again and look for the original. Birmingham to the CAS, is actually based on a genuine sports legal precedent. Put into Google 'Inter balance sheets at CAS'. Uefa at that time stood accused of preferential treatment of certain clubs, in this instance Man City, PSG and maybe Inter, hence the case by AC Milan. The EFL at that time stood accused of preferential treatment of a variety of clubs while. Loose parallels. Grealish sale idea was just one of many methods speculating how Aston Villa might have met FFP. The ground sale and leasebacks hadn't fully come to light yet at that time.

There are some certain concepts that you are perhaps failing to grasp in this debate, I agree with Dave. When facts change, our minds might- but those accounts will enable fresh analysis. Btw, yourself and the Derby fan aside, I've never known anyone join an opposition forum solely to debate FFP- the joys of modern football eh! ?

In fairness to me, I've never really suggested the new owners or Xia for that matter are odious. Purslow I don't like, granted- seems a slick and dislikeable individual let's say. Mainly on social media, your fans seem terribly arrogant. I'm glad you made this post tbh, as I should add there are two Villa fans I know who I have a lot of time for. Maybe social media amplifies but a belief that the rules may have been circumnavigated when so many clubs not least my own have made major efforts and major sacrifices to comply, multipled by the sheer arrogance of quite a high % of social media Aston Villa fan output and especially on this issue, hardens my position too. Perhaps my position varies but I'm still convinced that there may well be a case to answer.

My personal preference at that time, before other stuff came out was for Derby to win- because they had sold players as well, ie Grant, Christie, Hughes, Hendrick, Ince, Vydra, Weimann in 3 seasons. Also no Parachute Payments. Now granted their Rooney signing and how it was done, for which reason he got some booing arguably on Wednesday, possibly Bielik and what we now all know about the ground being seemingly £30m overvalued and the Amortisation debate, this has muddied the water significantly! Now this is a very interesting aspect. The rules are somewhat opaque. Derby believed they had operated within the EFL P&S rules but are now under investigation. Sheffield Wednesday believed they had operated within the EFL P&S rules and are now under investigation. There were differences for sure, but just because a club is passed in May say, then that doesn't mean that cases are not reopenable at a later date! QPR springs to mind, Man City just Friday even more relevant, AC Milan arguably- UEFA wanted to reopen PSG and may yet launch a fresh investigation- precedent says to me that they really should. Is it perhaps possible that the EFL pass or fail on the strength the initial figures ie £39m Yes/No Pass/Fail, and then investigate the detail later? I don't think it's an ideal system and it really needs to be tightened if possible, but this might be how they operate it. I will reserve judgement until those accounts are out then go from there, however we can all speculate based on 2017/18 numbers and falls in say Parachute Payments vs falls in wages e,g,. However Projected Losses, figures all in line with @YorkshireAVFC who is no longer on Twitter or I haven't seen on Twitter for a while, @KieranMaguire and @SwissRamble, these projected figures are all within a certain range.

Some of that was speculation in earlier days based on a variery of sources. However largely the thread has evolved and is pretty factually based now- of course there are opinions as well. £200m theory came from one of your own, ie astonvillanewsandviews, and that was never a claim that you had, more like what you could in their view get away with. Grealish was just paper talk but I significantly question either a) The Impairment b) The sale price or c) The profit. The 2018/19 accounts will be instructive and a good starting point! Should also add, though you'll know this already of course- debt write offs are fine and fine for accounts and there could have been debt written off on takeover, but it doesn't count for FFP so always subtract that from the income/profit.

Villa forum, whatever- your fans forum. Grealish or Neves at value price...well the transfer market is crazy but perhaps the latter has stalled a bit, £80m minimum but if it was a case that you needed to sell him before the end of your Reporting Period that may not be the case. On your other points, I wanted Birmingham to explore the CAS to try and force production of financial statements to compare against- not to get off the hook but to try and get equitable punishment if necessary- like AC Milan did. £200m Villa Park? Paper or Twitter talk, but tbh sure I saw some of your own fans online gloating about £200m or similar. Actually, the £200m figure was sourced from one of your own fan pages!

Wow, your fanbase love to bury their heads in the sand- your forum on the issue of FFP is quite something it must be said! Newsflash, if Man City and AC Milan can get kicked out of European competition, you certainly are not too big to be looked at in the summer or perhaps even when you return to the EFL! SJG? Him or Neves? Wonder who is better value.

When I say replace, I mean replace perhaps numeriocally but not perhaps calibre or wage wise. Snodgrass goes out, in comes Bolasie and El Ghazi- granted the former left after half a season. Out goes Grabban, in comes Tammy. Those are not terribly cheap. I question the stadium sale owing to the Impairment in 2015/16 but I digress, the 2018/19 Accounts will be my new starting point. Or if you get them in, you sell some key assets to help fund them in order to stick within the below. It means that if a club are close to breaching FFP regs, you spend lower, you put more of an emphasis on youth and if you exceed these limits you- not just you tbh, any club, then they get dealt with accordingly. Completely different and more complex case, but as we heard Friday evening. Man City banned for 2 years from European competition- feels pretty well deserved it must be said!

3rd July 2018. 2018/19 accounts surely? Don't suppose it makes much difference in the end with the 3 year periods. Could've had you been promoted. Just a little confused as to why Sevco 5112 an Derby County Accounts show differentials in distribution of the profits on player sales.

There is the fair value test. The Impairment and the depreciation- I think that is still an issue up for debate, personally. Do I think there has been a definite and cast iron breach? No, in the cold light of day. How can I until the accounts are out? Do I think it needs to be explored to the max- absolutely. It might be e.g. that the Sale Price was fair but the Impairment was questionable- profit reduced. Or the Impairment was incorrectly applied last May which means Fair Value decreased- profit reduced. Or it could be that all is okay...I've been researching Impairment and Depreciation for Fixed Assets. Still pretty unclear...whether Recoverable Amount means eliminate Deprecation on sale or not, it seems a fairly movable feast. I note that in both 2016/17 and 2017/18, the Impairment listed in the Fixed Assets for 2015/16 seems to be bundled together under Accumulated Depreciation. Worth a closer look by specialist accountants? Or it might be fine! I'm unsure whether it should be Book Value or Net Book Value when it comes to Impairment of a Tangible Asset for a start. IF it was restated to Fair Value or again to Fair Value in 2018 when you had the takeover, then that could impact upon the Profit on Disposal at the end of last season- an adjustment impacts upon FFP. Derby and Sheffield Wednesday both sold their grounds to reach FFP compliance- but investigation meant that there was a case to answer in the end. I think that there has been no charge tbh, because it's still a live issue but in a state of hiatus partly a) Due to the accounts not yet being out and b) Due to yourselves having been promoted. There will still be no charge, if all is well- but it's basically in hiatus atm I think.

Agreed ultimately but part of me wonders about how it pans out in the event of no soft embargo breach. The EFL did want Pedersen included too but think they made an error at their end which meant it couldn't be included. Was 7 for the loss, 3 for a deliberate breach and 1 given back for admitting it- or something? Then what is Projected Accounts all about? T=Existing season, Projected Accounts- and tbh by March 2019 clubs should have a fair idea of their profits- or at this level mostly, losses- for the season. T-1=Prior season real accounts. T-2= Season before that real accounts. The onus is on the EFL to the maximum extent of their power, to get clubs to prove optimistic assertions on Player Profit sales or large exceptional items. This is part of Gibson's issue IMO.