Thoughts on Derby and are we selling Villa Park?

First off, congratulations to Derby for beating Leeds, against the odds, to get into the play-off final.
I have to say I’m glad they won, as I was seriously worried about facing Leeds and saw them as our biggest stumbling block.
That’s not to say that I think playing Derby will be easy, but hey, give me a team we’ve beaten twice and put seven past without conceding this season, any time.
Whatever, it was a really good performance by the Rams and in the second half, they just didn’t give Leeds chance to breathe, let alone play.
It would seem that’s what we’ll have to try and do to them.

And then, there was an article in the Birmingham Mail which was followed up by 7500 to Holte (so a hat tip to them) where they noticed that a Twitter user had seen that the club’s owners have formed a shell company called NSWE Stadium Ltd.
Noone has mentioned it on here, but I find it interesting.

We’ve consistently been told by Christian Purslow, the CEO, that we don’t have a problem with FFP, yet many have failed to see why, as we’re surely way over the limits?
Could the reason be that the club is going to sell the stadium to our owners and then lease it back?

If so, to my mind, this is as legally bent as it gets.
You’re effectively selling the stadium to yourself.
Yet this sort of thing happens all the time in the financial world, as companies are seen as seperate entities from those who own them.
Indeed, it’s already happened in the English game.

It seems the powers-that-be are going to clamp down on this sort of thing, but we all know how slow they move and in my opinion it would be a restiction of trade anyway, so you would assume it’s still an option for us, should we fail to get promoted.

The big question for me, is what is Villa Park worth?

The club is valued at £75-125 million, take your pick, it’s all about how much someone wants it.
But given that Villa Park is renowned as one of the finest traditional stadiums in the world, let alone England, you have to wonder what it might be valued at.

You might laugh, but I’d suggest £200 million on paper isn’t out of the question, given some of the figures I’ve seen in the financial world.
Classic stadiums aren’t ten a penny, after all.

Of course, all this assumes we don’t get promoted.
If we do, it won’t matter, at least in the short term anyway.

32 Comments

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  1. Bill Pearson
    Bill Pearson May 18, 2019 at 8:24 pm . Reply

    Watched it Badger, it’s sad to see how far apart in football Watford was, not their fault it’s as your saying money can buy you fame. I think it’s something that will stick in payers mind for a very long time.

  2. Hitchens60
    Hitchens60 May 18, 2019 at 8:29 pm . Reply

    Badger I have seen the article about the formation of NSWE Stadium Ltd (NSWE being a company jointly owned by Sawiris / Edens) and the same thought occurred to me. Derby, I believe, did the very same thing last season and Steve Gibson shouted foul – I also think this is something done by Man City in the past. From an accountancy perspective why should there be any difference between selling to a company controlled by the owners (and leasing it back) and selling to a completely unrelated third party? The only possible (legal / FFP) questions would be around tax liabilities, whether the sale price is inflated and whether the lease arrangements constitute a ‘special arrangement’ (i.e. not in line with normal commercial terms being unfairly financially beneficial to AV) and surely both can be independently verified. OLL may have a take on the legality of any such deal. As you also suggest this may be a contingent arrangement should we not get promoted.

    As far as FFP is concerned at March 2019 – which I believe has been cleared by the EFL – I read that what got us over the line was a contribution from HS2 in respect of Bodymoor Heath (apologies for the pun 🙂 )

  3. originallondonlion
    originallondonlion May 19, 2019 at 1:42 am . Reply

    Selling the stadium to a company owned by the owners of the FC is perfectly legal. Whether it deliberately flouts FFP is another matter. It depends how tightly FFP is defined in EUFA’s rules.

    An advantage of doing so is the funding of stadium expansion. Suppose Villa got promoted and can see mid-table teams like West Ham and Newcastle pulling in attendances of 58000-65000. You might think that Birmingham could support a stadium with that capacity. But it will cost a lot of money whether a new stadium is bulit or the old one expanded. That won’t be a drag on the FC if they are only leasing a ground, it will be a speculative development by the NSWE Stadium Ltd.

    1. Hitchens60
      Hitchens60 May 19, 2019 at 7:01 am . Reply

      Good point OLL. Interestingly though, I believe (although not claiming to be an expert on FFP) that investment in stadium expansion / improvements are excluded from FFP calculations. Your point still stands notwithstanding.

      Another consideration would be – were Sawiris / Edens to sell their interest in the FC they would retain ownership of the stadium and the benefit of the lease.

  4. Holte66
    Holte66 May 19, 2019 at 10:01 am . Reply

    There is only one thing that concerns me regarding the sale of Villa Park is whether we are renamed in the process. It would be like selling our soul. Likewise renaming stands won’t go down well with fans expect for maybe the North Stand if it finally gets rebuilt. If it’s just a clever way of raising funds outside of FFP then I don’t have any issues if it’s all legal and above board.
    Changing topic, yesterday’s FA Cup final was a reminder of all that is wrong with the premier league. Watford are a team sitting comfortably in the top half and they were made to look like a non league team. If we got promoted we would have to accept we would be fighting to reach 7th at best but more realistically aiming to get to 40 points before season ends. Fans will be downbeat because we are losing more than we are winning and there will be those calling for Smiths head because we do have a fickle fanbase. Maybe the owners will invest but we will then be a ‘bought’ team in the way Citeh, and Chelski have become which doesn’t sit well with me. I used to like F1 but just like football, Sky are killing it and have created 2 teams with the wealth and resources who will dominate for the unforseeable future. I think what I’m trying to say is I really do prefer the championship! Just a shame the premier league isn’t on the same equal footing.

    1. Sidcowanslovechild
      Sidcowanslovechild May 19, 2019 at 11:48 am . Reply

      If we go up, we need to spend a lot of money just to stand still. Getting on for 100mill just to keep (if this is how we go and clubs willing to sell) Mings, Abraham, Hause, Axe and El Ghazi and replacing those who’s contracts are ending Adomah, Hutton, Jedinak, Whelan. That’s before we try to get better

      Loans a possibility and I would love to see some of the youth getting squad places but it will be hard next season and we have to be patient

      If we stay down then we have the added burden of Grealish going and maybe others but that will close down financial fair play concerns and Smith will have to show what a good coach he is S per Norwich losing their best player

      Whatever happens it will be tough but could be fun

  5. Bum Bum
    Bum Bum May 20, 2019 at 10:18 am . Reply

    Tax avoidance. If the stadium is owned overseas, it’s tax liabilities won’t be subject to British tax laws. Same as Google, Facebook, Apple etc. Shameful if we get the club involved in this sort of practice.
    Everyone hates paying tax, but it’s essential if we’re to have a solid social infrastructure, schools, NHS, military, roads etc.

    1. Originiallondonlion
      Originiallondonlion May 20, 2019 at 6:07 pm . Reply

      Not the case Bum Bum. It would be nigh impossible to structure a business whose income derives from ownership of a property in UK which it rents to a UK tenant so that it is not liable to CT.

      1. Bum Bum
        Bum Bum May 20, 2019 at 6:15 pm . Reply

        But if the shell company is off shore, and leases the stadium from there, then as an example it wouldn’t be subject to VAT or CT for the profits it makes from the ground rent… Or bugger all tax if it’s in the Caymen Islands…

        1. Hitchens60
          Hitchens60 May 20, 2019 at 9:58 pm . Reply

          NSWE Stadium Ltd is registered with Companies House – directors Sawiris, Edens, Purslow and Xia. I very much doubt whether there is any ‘tax avoidance’ issues here.

          Imho this establishes the opportunity for a beneficial property deal – simples. NSWE acquire the asset of Villa Park and a beneficial lease deal with AFVC – in return AVFC receive a substantial (property backed) cash investment. Nawiris and Edens create a secondary property investment interest at arms length to their ownership of the football club thus providing them with a bale out option if necessary or in the event of a sale of the football club.

          In theory of course 🙂

    2. DSVilla
      DSVilla May 23, 2019 at 9:39 am . Reply

      I agree about fair payment of tax, but the reality is this country lets big corporates get away with paying very little. There is little appetite to change that either.

  6. DSVilla
    DSVilla May 23, 2019 at 9:37 am . Reply

    The owners need to work around FFP. I’m not too concerned how they do it. I personally think an owner should be able to invest as much as they want, as long as they don’t saddle the club with debt.

    1. Hitchens60
      Hitchens60 May 23, 2019 at 10:19 am . Reply

      Unaffordable debt DS – there is nothing wrong with the principle of debt – it’s where debt is allowed to spiral to a level that’s no longer affordable – vis Lerner ‘et al’. FFP appears to concentrate on accumulated losses the total of which seems to vary according to which league the club is in without taking into account shareholders funds and the ability to fund such losses – sorry riding my hobby horse again 🙂

    2. Hitchens60
      Hitchens60 May 23, 2019 at 10:22 am . Reply

      Tbf to Sawiris and Edens they appear to be funding Villa through further share issues rather than loans so we are not in financial debt to our owners although we owe them a huge debt of gratitude. UTV

  7. originallondonlion
    originallondonlion May 24, 2019 at 12:22 am . Reply

    I don’t think much of this story. JT has had issues with the Ferdinand brothers, and his father blackened the family name. However JT has always been professional and loyal to the clubs he was with. Noticeable that he was turfed out as a player after last year’s playoff final, and 9 out of 10 people would not have returned to Villa even with a change of manager or owners following that. JT did. I don’t think he is even thinking of going anywhere until Monday is behind us.

  8. Hitchens60
    Hitchens60 May 24, 2019 at 3:40 pm . Reply

    I read we now have to contend with ‘Drake’s Curse’, courtesy of Wes Edens daughter, as well as Derby County.

    Now you may scoff but don’t underestimate the power of mind games on performance levels, positive and negative – and footballers are known to be superstitious.

  9. Pat 57
    Pat 57 May 25, 2019 at 12:42 am . Reply

    “Middlesbrough have stunned Derby by announcing their intention to sue the Championship club, days before the play-off final at Wembley.

    Steve Gibson, the Middlesbrough owner, has taken drastic action in his dispute with Mel Morris by vowing to take legal action over what he insists are clear breaches of financial rules.”

    https://www.telegraph.co.uk/football/2019/05/24/exclusive-middlesbrough-sue-derby-alleged-breaches-offinancial/

    Bad loser?

  10. nath
    nath May 25, 2019 at 8:33 am . Reply

    almost there now after the longest week in history ends. dangerous derby will be a match for us you can be sure of that. i see lots of villa fans saying we beat them twice and by x amount of goals unanswered. that wont mean squat come monday.

    i didn’t foresee them beating leeds, but i watched both games hoping they would. first game thou they lost they matched up to leeds really well and caused them problems with they quick counters and deep runners like mount and wilson. 2nd leg they went for the match more playing two up top and that caused leeds more trouble. plus they continued to break the leeds pressing with fine forcing deep runs from their midfield

    i expect them to play the same formation and style as in their 2nd leg against us. they will try to pin us back and not allow our defenders to play out from the back. but they wont press high from midfield. they will leave two up against our 3 back. they will hit us hard from deep, meaning our three midfield will have to track back with their men. i think the midfield battle will be vital to deciding the victors

    villa will have to step it up against derby we were poor against wba. or baggies were really good at cancelling us out. they stopped our defence playing out. and they denied us space to attack which derby wont do. against leeds they were magnificent but leeds had many many chances to finish them off and wasted them. we will have to take the chances when they arrive and their will be many chances as derby are not solid at the back and their midfield empty when they counter meaning they are very vulnerable.

    early prediction last one of the season so i must get this right. 3 1 villa hourihane gets the opener. rasping freekick

  11. Bill Pearson
    Bill Pearson May 25, 2019 at 1:14 pm . Reply

    To be honest I’m worried sick, we all know these matches an go anyway and not for the faint hearted, it’s all about fitness and willingness to win on the day. Theirs a lot at stake on this game for certain players and open window for other’s, no prediction from me I’m a picture of bad luck. I’ll use the old saying, may the best team win. Utv.

    1. Pat 57
      Pat 57 May 25, 2019 at 4:42 pm . Reply

      Don’t worry so Bill. We’re the better team on paper and we’ll be the better team on the day. In their heart of hearts every Derby player will know that we can beat them and every Villa player knows that they can win. That counts for something.

      A play off final is no novelty for us whereas for most of Derby this will be their first time.

      I predicted both play off semis correctly and I’m going for a relatively easy win for Villa.

      COYL

    2. Hitchens60
      Hitchens60 May 25, 2019 at 8:20 pm . Reply

      Bill, maybe It’s an age thing – I don’t know – but I’m really worried!

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