Cutting a bit of a story short, I’m currently sunning my bony butt in Crete for three nights (the equivalent of a booze cruise, only it’s for cigarettes. The money you can save is mad).
Well, I will be tomorrow, as I’ve only just arrived, hence me being a bit late in knowing that Wesley Moraes has actually signed for us
£22 million apparently and that’s a massive sign of intent.
I can’t say I know anything about him, but he sounds decent, having scored 17 goals with numerous assists last season in the Belgian league.
Which is just about what the press know too, as he wasn’t anywhere near on the radar.
It all backs up my previous point about them not having a clue and just guessing, in the hope that if they aim enough darts, one will hit the target.
Anyway, the point is that it proves we are going to spend serious money on certain positions.
And it seems to me that if you take the attempt to sign Butland, coupled with a decent defensive midfielder speculation to be true, we’re looking to add to the backbone of a side.
Which makes extremely good sense.
I think signing Wesley means Tammy Abraham will not be coming back.
Dean Smith prefers one up front and there’s no way I can see Abraham playing second fiddle to another striker.
Much more likely that we’ll sign an older, proven Prem striker as backup, in my opinion; the likes of Gayle.
With Kodjia and Davies in reserve, I’d suggest that’s about as good as it could get, given that we aren’t going to be spending supid amounts of money.
Something else that crosses my mind is that we haven’t spent this money on a gamble and someone has been watching Moraes very, very, closely
You can bet your boots that we have at least another two unknown signings of a similar standard in the spotlight and again, the press won’t have a clue.
This signing has massively encouraged me, as, as I’ve hinted, I think we’d do well to survive with the current squad.
Add some more quality and we’ll have a very good chance of survival.
A final thought is that surely Hogan will be sold, seeing as he has no chance of getting the 40 games he wants?
That one just didn’t work out did it?
Here’s looking forward to the new season.
UTV
We’re also in talks with Jed Steer, who’s almost at the end of his contract.
I wonder if he’ll want any assurances?
JT signs a new contract extension to 2021 – good news imho.
JT signing a contract extension is as good as any business we will do this summer. Having JT at our club is a big attraction for future signings and his winning mentality will prove vital next season. Let’s hope the announcement of Mings and possibly Tuanzebe is sooner rather than later.
It’s getting better and better, JT on a two year contract beggers believe that, thats killed the media on him moving when Lampard moves on so they say. I’m gearing up for the new season and full of hope that Villa gets back where we belong, top 6 in the premiership.
Jed Steer just extends until 2023 … every day new good news
Agreed! The management at the club after 10 years of lunacy finally making good football decisions. Next up…Mings?
Never a true word written Holte, wonder if Deadly turning over thinking they’re spending all the money, why didn’t I do it., what a transformation. Keep it going and join our future Kings team.
This is an exciting time for our club after the years of depression. Please can anyone enlighten me on the rules of FFP.
I noted in the press that our owners have put fresh finance into the club through issuing new shares, rather than taking loans out against the club, which Learner did. Is there a limit to the amount of capital that can be pumped into the club using the share issue method, without adding to the club debt?
I just wonder how much more we can spend?
I also wonder with season ticket sales being capped at 30,000, virtually full capacity crowds will be present for nearly all matches. This could be the springboard to the ground capacity being extended and the North Stand replaced. This would be brilliant.
UTV
Sid – first, I’m no expert on FFP so my comments are taken from general business experience but simply, in theory, there is no limit to the amount of funds that can be provided through acquisition of shares issued and allocated, particularly in a closed company like AVFC which is controlled by Sawiris and Edens. The issue and acquisition of shares creates no debt for the club.
On the other hand, if owners lend money to the club it increases indebtedness and therefore financial risk. The money has to be repaid (at some point), it has to be secured by assets (the team / the stadium for example) and the debt increases through interest attaching to the loan. My simple understanding of FFP is that it derives from a scenario of owners putting clubs into unmanageable debt (prime example – Portsmouth) and then withdrawing financial support. There are also tax benefits derived from investing through shares rather than debt but that’s another ‘story’!
By buying up issued (but unallocated) share capital, our owners can provide finance through ‘shareholders funds’. This is not a debt but capital financing which also has the benefit of strengthening the balance sheet. The shareholders take 100% risk in the success of the ‘business’ whilst providing liquidity (cash). The limit they can buy is the number of shares issued but not allocated although the company can issue more shares if the shareholders agree. Of course as more shares are allocated (bought) then their ‘value’ (as against their unit cost) is diluted. The important points here are liquidity – i.e. cash – and that it doesn’t create a debt liability. As more shares are bought by Sawiris / Edens and not matched by Xia so his position is diluted (his ownership percentage reduces).
To use a simple example – how can Uber continue to make losses and still operate – because they have sufficient money to fund those losses – the majority of which will be in the form of shareholders funds (I.e. shareholders buying shares) – although they will also hold some debt.
What I don’t understand about FFP is the apparent concentration on aggregate debt without taking into account the ability to fund that debt but I suspect it’s relevant and Purslow knows how to utilise it.
So, in summary, I don’t think there’s a limit to what we can spend in purely cash terms (only subject to how much our owners are prepared to invest) but I suspect there is one in terms of FFP (losses on the Income & expenditure account in isolation over three years) particularly if you factor in the risk of relegation from the Prem.
I’m really not sure whether that helps – perhaps OLL has a view?
I’d totally agree with that view Hitch.
I still don’t see how it’s “fair play” if we can easily pile £100 million in, when many clubs (even Norwich and Sheff Utd can apparently only afford £20 mill) can’t get near that.
But you’re right, it’s all about putting the club in debt and with our owners buying shares, they aren’t.
That said, I wonder why Man City and Chelsea didn’t go down that route instead of creating joke £300 mill sponsorships?
Or why didn’t our owners just do some sort of deal where it looked like on paper they paid say, £300 mill for the club?
Accounts. Like I’ve consistently said, it’s all about knowing how to work them and as long as you stick within the rules, they can’t be argued against, as much as they might seem dodgy.
It’s why Gibson can moan all he likes, but nothing will be done.
The reasons for Man City and Chelsea doing it the way they they did are fairly simple Badger. Money introduced through share issues is a balance sheet item. The cash paid for them goes into the bank and doesn’t hit the P&L account. The problem with FFP is that it tracks P&L. If our owners put cash in and spend it propping up wage payments it shows as a negative in the P&L. Sponsorship is trading income and goes straight onto the profit side of the P&L. Highly dubious though it is.
I don’t know that I agree with Hitch over loans v shares for tax purposes. Any loan repayments are tax free, and tax would only apply to any interest paid on the loan. Most of Lerner’s loans were interest free as I recall. The only advantage in shares is that if the club went bust, or sold at a loss, the owners could claim tax relief. Hardly likely in this case. Anyway, Hitch, maybe you know something I don’t and can tell me why it’s a better tax move.
The important thing I guess is that we are in a much stronger position financially, and it looks like finances won’t affect our ability to stay in the Prem. Over to you Deano!
Lerner converted all (I believe) of his loans to equity. As AVFC Ltd (or whatever the holding company is called) is a private company then, for tax purposes shares can be declared on a cost basis irrespective of any valuation of the company. HMRC will always ‘value’ shares in a private company as zero on acquisition as they argue there is no market to establish true value therefore in a private company acquisition and sale are declared as cost.
So by buying additional shares the owners increase the acquisition cost of the company for tax purposes (as Lerner did). Lerner made a loss on the sale (cost of acquisition less cost of sale) all of which can be set against tax – much more beneficial than loans.
Bu**er just wrote a response and posted it incorrectly so it will have gone into moderation – so this might end up being posted twice!
Lerner converted all (I believe) of his loans to equity having waived the interest. In a private company, such as Villa, for tax purposes the owners will use the cost of shares on acquisition for tax purposes not value. This is because HMRC consider the value of shares in a private company to be zero on acquisition as there is no market to establish true value. So additional shares purchased increase the purchase cost of the company for tax purposes.
Lerner sells his shares for less than he bought them for (at cost) and can offset the loss against tax whereas being repaid loans has no tax benefit.
Hope that explains it.
Don’t think that is my point Hitch. If I buy a company for £100 and lend it £100, then sell it for £100 plus repayment of my loan its tax free. If I buy the shares of a company for £100 and create £100 more shares I can sell it for £200, no tax. It’s the same thing. It is only a tax benefit if I sell at a loss or the company goes bust. Lerner did, but I’m not sure of his tax position anyway as his loss was on UK assets but he will be US tax resident. Add to that, it has to be at least 12 months before sale if you do a loan to shares conversion.
If I’m still missing the point don’t worry. Probably not the place for this discussion!
You’re correct DS in the example you cite and Lerner did sell for a loss created by the conversion of loans into equity. However what it also does is reduce the level of any profit on a sale which a loan doesn’t, so for tax planning purposes it seems to me that buying shares is tax positive as against lending the club money.
Anyway, as you say, not really for an in depth debate here.
Most important point is we actually have money to spend!
UTV
That is an excellent summary Hitchens. I could not expand on it.
What I do not understand, following conflicting punishments, is what FFP restrictions are placed on wealthy people ‘investing in shares’ or ‘simply gifting money’ to their club. Obviously loans or Glazer style swindles are not permitted since indebtedness increases. But – since the principle behind FFP was that success should not be simply bought by spending the largest amounts on a manager players and wages – there should be something to prevent our new owners pumping their own money into the club. Wish I knew how that was being applied, because the cevidence is inconsistent.
Hey, I’m loving all the debate!
It just goes to show, nobody can put a finger on things to be 100% sure.
Reported that Villa in talks with Huddersfield for CB Kongolo for £17.5m. Huddersfield signed two new central defenders (Elphick being one) so this story might have legs.
If true, does it mean we’ve failed to agree on a fee for Mings?
Hope not. Mings fecking ROCKS!!!!!
That doesn’t make sense to me Hitch.
Smith either rates Mings or he doesn’t and he’d be cheaper than Kangolo, whatever the price is.
Maybe we want both?
Or more likely, the Kangolo story just isn’t true?
I think they want both. Axel’s not coming so, hopefully, it’ll be Mings, Hause, Kangolo, and Chester competing for the CB spots, unless something happens with Chester. It can’t be either/or with Mings and Kangolo, though. We’re too thin in that department. Hause might play left-back, so even more likely that 2 CBs are on the shopping list…
Blues appoint Craig Gardner as player/coach and Clotet as caretaker manager, even though they’re not looking for another manager.
What a strange setup. Does Div 1 await?
Good chance Badger – particularly if they sell Adams
Sorry Badger but I had to check that one out as I honestly thought you were pulling our legs. Gardner as a player/coach is a strange one.
On the other hand what decent manager would join them now anyway?
Odds are around 9/2 for the noses to be relegated. I’d expect those odds to shorten soon.
I had to re-check it too.
Some Villa fans are laughing their heads off 🙂
I’m just looking at the Fan’s consultation group notes;
Q2) Derby County revealed recently they sold Pride Park to the club’s owner Mel Morris for £80 million last year to have it leased back. The press and other CEO’s have suggested Villa had plans to do the same, especially if they failed to win promotion. Is the fact that there is a subsidiary company called ‘NSWE Stadium Ltd’ linked to this in any way?
A) Aston Villa’s assets – the football club, stadium, training ground, Academy, retail store etc. are commonly owned by companies controlled by Nassef Sawiris and Wes Edens. The Club and our owners have no intention whatsoever of selling the stadium to a third party.
Note the “third party”.
We were definitely going to do it, that tells me.
And I suspect we still might.
I think this is a bad idea and should only happen on one clear condition, which should be ‘set in stone’ in the contracts:
If and when Sawiris and/or Edens decide they want to sell AVFC, said sale MUST include Villa Park to the prospective buyer. In other words, the club must never be in a situation where men who don’t own the club i.e. don’t have any interest in the club, own and profit the club’s iconic and historic home, Villa Park. End of.
BFR, It’s not a problem.
When Purslow talks about a third party, he isn’t lying, but it’s a typical politician’s reply, in being economical with the truth, imo.
The club will not be sold to anyone else, simple.
But that doesn’t mean they can’t sell it to another company owned by Sawaris and Edens.
In other words, they can sell it to themselves, although that won’t be the case on paper.
Also in the notes is confirmation from Purslow that we are compliant with FFP rules for our 18/19 accounts so Steve Gibson’s complaints are so much sour grapes as we suspected. Nonetheless excellent news.
Badger, Hitchens and DSVilla
Thank you for providing feedback on FFP.
I was intrigued by new shares going into balance sheet rather than p&l.
I naively read this as, we could go and issue unlimited shares, but must have sales revenue being greater than total costs. Therefore, I assume we can go out and buy a number of quality players and as long as their wages and all other costs of running the club do not exceed income + allowable loss within a year, then we are OK?
If this is the case, things could become very interesting at Villa Park. Next year we will receive £100m+ from being in premier. Plus estimate of 30,000 season tickets at average £400 (including those who buy hospitality) = £12m, + shirt sales no idea etc. Let us assume that our total income is £130m. That’s a lot of player wages that can be absorbed.
Now for a potential golden goose moment. The number of season tickets we have is phenomenal and puts us in the elite bracket. Could this be the moment where our owner Sawiris comes to the forefront. He has a large share in Adidas. Could he influence them to regards to Villa Are about to kick in a number of levels and secure a large sponsorship? If this is the case, this could be the stepping stone to us being able to challenge the top four. This may well be a pipe dream but it might just have part of the path ournowners I tend to tread.
Sid, this is where I get confused. For “income statement”, I think you can read “P/L account”;
“An income statement is generated to measure the financial results of business operations over a given period of time. It shows revenue or gross sales, expenditures, and the resulting profit or loss. Balance sheets are intended to show the financial position of a business at a particular date by revealing the value of all properties owned, the debt owed and the amount of capital ownership.”
It seems to me that the EFL are more concerned about the balance sheet than the actual P/L account, although the EFL rules talk about a given period (three years).
If I’m right, it’s the common-sense approach, as it’s all about not busting the club.
And yes, it would suggest that as long as they pump the money in, we can spend what we like.
Which is exactly what Gibson is moaning about.
Very good point about Sawaris. I’d forgot about his Adidas holding and maybe that’s his angle?
Forget FFP, forget all the accountancy lingo. We have two extremely wealthy owners and we are in the Prem – the only thing to concern ourselves with is staying there and then the sky’s the limit.
UTV
Totally agree. If we can pass FFP in the Championship given the losses and sharp drop in income it’s hardly going to bother us in the Prem.
Well we’ve contributed to the Villa , just opened my present and its a Luke Aston Villa shirt. Yipeeeeeee.
Jed Steer’s apparently had his wages doubled to £20k a week.
I’d say that’s a fair reward for his efforts in helping us get promoted.
Still quite low for a Prem player, but not bad for a no 2 goalie, I suppose.
He’s got it all to do now Badger, he’s been saying twelve months ago he thought times was up. Me, he’s My hero saving them two penalties, made his mark for me and I cannot wait for the start of the season…
Happy Birthday Bill – let’s hope Mings signs this week – a special present to help you celebrate. UTV
Morning all, well I can say it now getting back on the planet, yesterday was my big day 4 score and boy did I get pissed.some geezer said Tuesday we will get the answer on Minns but me thinks we might not be that lucky.utv. …
Happy birthday Bill. And there was me thinking that I was old 🙂
Bill, Just heard that Mings is back from his holidays this morning so hopefully we might see something happen soon
Happy birthday, Bill! What’s your secret?
BFR, staying fit, enjoying what you do, and most of all love life..
Yes Pat 57, meeting clubs and hopefully sorted by Tuesday .Thanks Pat never thought I’d reach this age and still be reasonably active in all fields💪👌
Seems having wealthy owners, being Villa and achieving promotion equals clubs trying to rip us off in the transfer market. Whilst I’m sure we could pay these ridiculous amounts being banded about (accepting media hype) I don’t think we will nor should we but it does then raise questions over how we add the players we need of the quality we want?
I think we are stuck with this for now Hitch. We have a very short time to get quality in and up and running, to ensure we stay in the Prem. I think we will end up paying these high prices, but the fact that there seems to be alternatives we are looking at in each area may help us get a slightly better deal.
Going forward we need to look at how clubs like Brugge, Sevilla, Porto etc get such quality at fairly low cost, with substantial sell on value. That’s all down to scouting and contacts I suppose. I expect we may well see more of that once we are established in the division.
I’ll go with that Hitch, so what do you do? ,my only thought is if the player loves something so much he makes it quite clear to his boss. Nobody likes a unhappy person, in Minns case he knows Bournemouth will go for extra £, s p its down to him to state the case.