The 'Profit & Sustainability' Thread | Page 22 | Vital Football

The 'Profit & Sustainability' Thread

Aston Villa made a £69m loss last season when winning promotion from the Championship under their new investor-owners, the club’s published accounts have revealed. That loss would have been much greater, and possibly breached the limits of the EFL’s financial “profit and sustainability” regulations, if the owners had not bought Villa Park for £56.7m via another of their companies.

The accounts of the overall Villa holding company, Recon Group UK Limited, for the year to 31 May 2019, record a £36m profit on the sale of Villa Park, so without it, the club’s loss could have been £105m. The Land Registry record for the stadium notes the £56.7m sale to NSWE Stadium Limited, owned by Villa’s joint owners Nassef Sawiris and Wes Edens, was completed on 21 May, just 10 days before the financial year end.

:whist:

https://www.theguardian.com/footbal...-announce-69m-loss-despite-sale-of-villa-park
 
JuanPabloAngel said:
Nassef Sawiris and Wes Edens have released the full accounts relating to their private purchase of Villa Park. NSWE Stadium Limited published the details in full on Companies House last month.

It reveals that £17.01million is interest-free and the remaining £39.69million accrues interest of two percent per year.

https://www.birminghammail.co.uk/sport/football/football-news/aston-villa-issue-key-update-18098863

https://beta.companieshouse.gov.uk/company/10883540/filing-history
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If the payment is accruing interest, then did they buy the stadium? it you buy something you cannot claim interest on the amount spent. Surely this somehow implies that the club still owns an element of the stadium and has received a loan against it?
 
Gordonsleftboot said:
If the payment is accruing interest, then did they buy the stadium? it you buy something you cannot claim interest on the amount spent. Surely this somehow implies that the club still owns an element of the stadium and has received a loan against it?
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No idea mate, I'm sure our resident financial expert @mike_field can explain. Just came across the news as I was browsing.
 
Gordonsleftboot said:
If the payment is accruing interest, then did they buy the stadium? it you buy something you cannot claim interest on the amount spent. Surely this somehow implies that the club still owns an element of the stadium and has received a loan against it?
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I think it’s like this. Owners lend money to the company. The company buys Villa park and owes the owners back the money. Using debt rather than equity in this case probably tax driven.
 
Hifriedelity said:
I think it’s like this. Owners lend money to the company. The company buys Villa park and owes the owners back the money. Using debt rather than equity in this case probably tax driven.
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Seems right. The company pays 2% p.a. to the owners on a substantial part of the debt. The club leases the stadium from the company at £2.6m p.a.
 
Can anyone tell me if the FFP will be in force this season. The reason I ask is first of all Man City blew a big hole in it with that court case. They were found not guilty, but had to pay a silly fine for being not guilty. The main reason I ask is with no supporters in the grounds the revenue has gone. How can FFP be in force with no revenue coming in ? Hope your pockets are deep Messers Sawiris’ and :guiness::cheers: Edens
 
Man C is largely irrelevant for domestic FFP anyway, they weren't strictly found not guilty, the case against them wasn't proven given all the errors and nonsense and Statute barred claims in it.

FFP is in force this year, but 2019/20-2020/21 will be handled together at the end of next season.

Match day revenue is tiny compared to everything else as well.
 
LORD RON SAUNDERS said:
Can anyone tell me if the FFP will be in force this season. The reason I ask is first of all Man City blew a big hole in it with that court case. They were found not guilty, but had to pay a silly fine for being not guilty. The main reason I ask is with no supporters in the grounds the revenue has gone. How can FFP be in force with no revenue coming in ? Hope your pockets are deep Messers Sawiris’ and :guiness::cheers: Edens
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Merged into the thread already going on FFP and the like :thumbup:
 
https://www.dailymail.co.uk/sport/f...BLOCK-clubs-selling-grounds-leasing-back.html

The Premier League have opened talks with the EFL about introducing a new regulation to prevent clubs from selling their stadiums and leasing them back to inject money into the business.

Derby, Sheffield Wednesday, Reading and Aston Villa have all taken advantage of sale-and-leaseback schemes to help them comply with the EFL's spending rules. The sale of Villa Park for £56million to a company controlled by co-owners Nassef Sawiris and Wes Edens created an issue for the Premier League after the club were promoted last year.

As the report goes on to say, after a 9 month investigation, the move was then approved because they hadn't broken any rules, but now they want to stop this loophole.
 
There's already an adequate mechanism called bankruptcy, most of these rules are simply anti-competition. There needs to be minimal regulation as far as I'm concerned. Prospective owners needed to be vetted and powers should exist to prevent someone coming in and simply asset stripping a club but that's absolutely it. I'm sick of this shit. All it results in is the maintenance of an elite subset of clubs and the rest have zero chance of disrupting it.
 
Bring in rules and accountants will find the loopholes.

Quite a few years ago, I was on a training course, where a qualified accountant took us through the figures for a large EPL club. The loans coming in and then dished out to certain individuals at varying favourable interest rates made a mockery of the perception the club was so asset rich. It was appeared that it was purely the turnover and throughput of funds that was holding it all together. A foundation built on sand it seemed. That club is still up there without sanction.

I quite agree with eliminating asset stripping and cutting out excessive/reckless operating, but the current rules do not address the ability of the club to pay and remain stable.

Some suggestions I have heard based upon wage roll -v- turnover thresholds could have some merit, but underlying supporting assets should also come into the mix somewhere.
 
Randy Blockhead said:
Bring in rules and accountants will find the loopholes.

Quite a few years ago, I was on a training course, where a qualified accountant took us through the figures for a large EPL club. The loans coming in and then dished out to certain individuals at varying favourable interest rates made a mockery of the perception the club was so asset rich. It was appeared that it was purely the turnover and throughput of funds that was holding it all together. A foundation built on sand it seemed. That club is still up there without sanction.

I quite agree with eliminating asset stripping and cutting out excessive/reckless operating, but the current rules do not address the ability of the club to pay and remain stable.

Some suggestions I have heard based upon wage roll -v- turnover thresholds could have some merit, but underlying supporting assets should also come into the mix somewhere.
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Randy, assuming we maintain our current status,are we in a position to, financially at least, join the BIG boys elite FFP cartel?
 
Derby have just been cleared for selling their ground for £81 million and leasing it back

Given our deal was for £56 million then I would say that is more than fair as no way is Derby's worth £25 million more than ours.
 
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