Financial Fair Play Explained | Vital Football

Financial Fair Play Explained

Should our new owners just pay the fine for FFP and get on with it?

  • Yes

    Votes: 19 54.3%
  • No

    Votes: 16 45.7%

  • Total voters
    35
Whats sickening is both the Chairman and now the Manager quoting FFP as one of the Issues the club "NOW" has to deal with.

FFP was put in place to stop clubs going into financial difficulty....

FFP is not the problem, the management of the club is the problem.
All those players who are not worth shit taking millions out of the club every month. Twats like NZogbia taking £2.8 mill out of the business every year for no return......
Ditto Gabby ..... Its no wonder were fucked before FFP was mentioned as an excuse.
 
Yes Col8, Xia inherited an unsustainable position of £93m wage bill. Despite making £30m of savings in that area in his first year (and more last year if the press can be believed), we are burdened with that figure for FFP together with a reducing income.

This isn't black and white as some state on here, yes he is paying for some of his own mistakes, but he took on a club that was always going to struggle to meet FFP over a 3 year period. £7m loss last year is a massive leap from previous years and inside the allowable target moving forward.

JF was right when he said things will get worse before they have a chance to get better. We should accept where we are now and plan for a sustainable future - no more huge contracts - McCormack, Jedinak, Lansbury etc are all down to Xia.
 
To my mind, all these ridiculous contracts for average players began with MON and has been compounded by manager after manager ever since, sanctioned by both Lerner and Xia. The collective incompetence is mind numbingly shocking.

The club clearly has to go through a major restructure and we will have to find the same way back to the Premiership as Bournemouth, Brighton, Huddersfield and all the other smaller but well run clubs. However, as SB recognises, we are Aston Villa and on top of that will be the inhibiting, added expectation that our stature and history gives to us supporters.

From our point of view, all we can do is continue to turn up in numbers and back the team positively come what may. Personally, I have already resigned myself to the fact that it could take many years to find the right combination and balance. To my way of thinking, a return to the Premiership, in a condition where we have a chance of avoiding relegation within the next five years would be a pleasant surprise.
 
Time to renegotiate all those ridiculous salaries based on performances. If the players actually cared for the club, they should do their bit.

Then a bit of crowd funding should be able to raise some capital ???

Tongue firmly in cheek.
 
Say what you like about Gold and Sullivan (I hate the pair of twats)
However I remember them signing players for the noses with a clause in the contract that IF the club were relegated then their wages would go down.

Now that is good business, but I still fucking dislike them. TWATS.
 
The bottom line in relation to wages has to be a return to basic salary relative to the division with bonuses linked to performance and achievement. No more "I've won the lottery, Villa have signed me so for one reason or another my performances go to shit".

If you're a lower league player (that's where we need to shop). We have to allow the working conditions and the club's ambition to drive purchases. No more pretending that we are a Premier League club. That's reality for me. I will be content when we are leech free and can mount a challenge with a squad that has a chance to establish itself. Could take years mind you.
 
Maybe its me, but I'm confused. We have to sell our best players to settle FFP. FFP is the amount of losses made overthe past 3 years. So we sell the players. Raise the cash. Where does it go? If we spent too much, then the cash came from loans or Dr T or others. So Dr T or whoever gets paid back. I assume that money cannot go back into the club or it will not count against FFP. So £40m or so goes where?
 
It's a three year accumulation of loss vs revenue.

It's not a true accountancy test, the cash itself is irrelevant really, it just matters that the applicable debt portion for FFP accounts for us and it comes down to their arbitrary ceiling levels.

Xia could spunk us £1billion and HSBC could go mental promoting the fact Villa's account has £1billion so everyone knew it was true....FFP boffins would go 'so' you've got a £20m hole you need to plug, get on with it'.

It's a construct - well intentioned, but absolutely childishly enacted.
 
Mike I get that. My point is that if we have made losses, then money has been pumped in from somewhere to pay the loss. So a player sale repays that money. The cash does not stay in the club, it presumably goes back to whence it came. If the good Dr was the source, then he gets re-imbursed. So he now has £40m outside of China... or someone does. So... FFP payments re-finance the doctor or whoever put the cash in..unless I have made an error? So the good Dr can now meet the bills providing they do not exceed the £13m or whatever we are allowed to lose this year. No more excuses that he can't get it out of China?

On another point, if 20,000 season tickets have been sold, with a large majority paid for on the never never, then I assume the never never company has already paid the Villa. Say 20,000 tickets at and average of £300 is £6m. Has that been spent already if we cannot pay bills? So how does the club fund the next 12 months?
 
[QUOTE="Gordonsleftboot, post: 1489116, member: 260"

On another point, if 20,000 season tickets have been sold, with a large majority paid for on the never never, then I assume the never never company has already paid the Villa. Say 20,000 tickets at and average of £300 is £6m. Has that been spent already if we cannot pay bills? So how does the club fund the next 12 months?[/QUOTE]
 
There you have it Gordonsleftboot he sells or has loans against assets plus whatever he can make over and above ffp requirements from player sales, which brings us full circle to is he so selfish to hang on to Aston Villa knowing that he is wrecking the clubs future or will he sell up to save it. Heres hoping he will realize in time.
 
No, because in many ways it's a notional loss Gordon. This year the FFP hole of £40m. We haven't lost £40m really, we're not £40m more in debt, we're down £40m on last year that we can cover in a number of ways in terms of the business running and not falling into trouble - but FFP only allows certain ways to cover it for their purposes even if it's covered perfectly well in the accounts and with HMRC etc.

I probably haven't explained that properly. It's nothing to do with Xia pocketing the money - anything he's put in himself will be turned into equity so no cash back out. Stuff he's put in from outside loans will need repaying but that's not FFP. That's cash flow.

FFP blocks an owner from putting money in, it doesn't make them take their cash back.
 
Merlin - cash in would be utilised, tickets sold on finance will be money to come in - it wouldn't have been spent yet as he hasn't factored it.
 
Our income will be down £20m due to fall in broadcasting revenue (parachute payments). If we don't cover that with income or cuts we will be £20m further in debt for the year.

The FFP 3-year allowed loss limit for us decreases by £22m (the £35m for our last year in the PL replaced by £13m for this coming year). So it's possible we will have to reduce our loss for this year by £22m (I say possible, because it depends on how much we actually lost over the last 2 years).

Add the 2 together and we have to find £42m, either by new income or cuts, to meet FFP. Possibly. The FFP limits for each of the past three years have been £35m, £13m, £13m (giving an allowed loss over the 3 year period of £61m). HOWEVER, if our actual loss over each of the last 2 years has only been £13m each year, then we're allowed £13m loss for this year, the same as last year, and it's only the £20m parachute payment drop we have to cover for FFP. I THINK that's right.

Where does the FFP money go? I.e. if we manage to get cash for Jack what happens to it? It would go towards reducing the £20m additional debt which we're heading for this year. If we get more for player sales than £20m then that can go to reducing the £13m loss we may be heading for.

There is a big snag. When a club makes a loss, it's effectively financed by the owner, either by the owner making a loan to the club, which is repayable, or by the owner putting equity into the club (creating and buying shares), which isn't repayable. If Xia has no money he can't finance our losses. So we have to aim to make no loss. Or build up debts to other people. Gets nasty!!!

Edit: If we really do only have to cover £20m additional loss over a £13m allowed loss this year, and we have a new owner who can afford to put £13m equity into the club to cover the £13m bit, then selling Jack might see us OK or close to OK, for this year.
 
So if One of the dodgy DR X companies sponsored the club via naming rights, for 50 million would that be allowed? I know it wont happen but wanted to clear up the Man City FFP comparison of raising Income..

My gut feeling is that Dr X Didn't really have the backing of his company shareholders when he bought the club, but believed he could make a fast buck once we were in the premiership & he could sell on. I dont believe he or Re**n have actually put any money into the club Just loaned against future monies & financial assets
 
You can bring in any outside money you like via naming rights and other commercial activities. But it does have to be outside. So the sponsorship company would have to be seen not to be Xia under another name. Money shoved in by the owner can't be used to offset FFP, except that if he doesn't put money in the £13m limit drops to £5m.