It transpires that the club has had a Cash injection of £13 million, courtesy of Nassef Sawiris and Wes Edens, our minted owners, buying more shares in the club.
Which left me quite perplexed, to be honest.
I thought we couldn’t spend any money, because we’re going over the £39 million loss over three years, or whatever it is?
Until I had another think about what FFP is actually meant to achieve.
My take is that FFP was designed to stop clubs going into extreme, unsustainable debt to try to achieve an unfair advantage.
I won’t mention Man Utd’s £1 billion debt, but even then, they’re not at risk of going bust just yet.
You can’t risk busting your club for a short-term gain that could very easily go wrong, is the point.
I also won’t mention that smaller clubs could face going bust for 10% of that £39 million.
I have never been convinced about the whole idea, but it’s a good premise.
Reckless owners can’t come in and bust a club in the short-term, is the idea.
But there’s been good debate on here and elsewhere about how this is basically a restriction of trade, that has no basis in law and wouldn’t stand up in court.
Except QPR had to swallow a stonking fine (£12-13 million?) quite recently for breaking the rules.
Why didn’t they fight that decision in court?
Probably because it’s just easier to play the game. You don’t really want to fall foul of those that run the game, do you?
I’m sure the EPL, EFL and FA can be as vindictive as it gets.
So where does that leave us?
Well, something has definitely gone on somewhere.
We know the EFL called the club in for discussions when our new owners came in.
Christian Purslow, our CEO, said that we would play within the rules and FFP wouldn’t be a problem, even though we’ve obviously gone well over the official limits.
My take and it’s a massive positive, is that our owners have offered some sort of bond, that says they’ll cover the required amount of any debt that the club has.
Of course, we need some debt. It suits the books, after all.
If I’m right, this is a is a win-win for all parties.
The EFL sees increased investment in the game.
And the club gets to spend whatever money the owners want, because it’s all guaranteed.
This is the relevant part, that is surely what FFP is all about.
Our owners have committed 100% to not bankrupt the club and backed it with real money, not promises.
Am I wrong?
Very possibly.
In which case you can tell me how we can continue to spend.
The point is, even though I don’t expect Dean Smith to spend a fortune in the summer, he’ll still have plenty of scope to replace the majority of the squad if he deems it necessary.
And continuing with the positive vein, someone sent me the following stats about the Villa;
We have the 4th highest shots per game at 14.1 only beaten by Leeds, Norwich and Brentford.
And we are 3rd overall for passing accuracy at 79.5% behind Leeds 79.6% and Swansea 82.2%
Individually, we have two performers in top 4 – Abraham obviously but also Connor Hourihane is 4th highest in terms of assists with 9.
Okay, you long term readers know what I think about statistics.
They don’t represent the game as us fans see it.
But ALL managers and coaches have to take them into consideration, as they have far too much to oversee these days.
As much as we might not like it, the days of Sir Ron looking after 15 players, with a half time orange and a boot up the jacksie have gone.
I still think Hourihane is mostly invisible in games though.
And those stats don’t show that we’re in the bottom three in the whole professional league for conceding goals.
But hey, I’m looking for positives, aren’t I?
Hey, you can’t say that wasn’t a positive post, can you?
Normal service will resume before the Stoke game, no worries.
Hey Badger, I know little more than anyone else on FFP but a couple of points Which I’m pretty sure are correct (at a superficial level at least).
FFP rules set out the allowable losses (not debt) that a club can sustain over a rolling three year period which is calculated by reference to allowable income defined by the FFP rules and hence is different for each club; the concern being too many clubs were overspending leading to unsustainable debt.
My understanding is that it doesn’t directly deal with debt and that FFP has not significantly reduced debt levels (particularly in the Prem).
It has been suggested that by buying shares (rather than lending the club money) the owners can improve the FFP position – personally, I don’t see how that would work. Imho, I believe buying shares is a more tax efficient way of funding the club than lending it money.
Purslow show know FFP, he was a member of the committee involved in developing it.
We shall see what the summer brings.
Of course, the downside is – if another £13m has been invested, does that mean we are still haemorrhaging money (losses) or is it that we still have cash flow challenges around issues such as transfer and HMRC payments?
Hitch,
Yes, I’ve talked about debt, as opposed to trading losses, but don’t they equate to the same thing?
Well, as you suggest, they are slightly different.
But the owners bought more shares to give us money to buy players that are costing us even more money.
Whatever, we must have increased our trading losses, as any wages saved by players going on loan can’t possibly match our spend.
And we must be way over our supposed limit now.
I don’t believe cashflow is a problen in the slightest, as the money must have been guaranteed imo.
I can’t see what else the discussion with the EFL would have been about.
Fortunately, we’re in the situation where a club as big as the Villa wouldn’t be allowed to go bust for a few million anyway.
You possibly know better than me that there’s always room for a deal to be done and I suspect we’ve done one with the EFL.
I really think we’re in a good position, even if we don’t get promoted.
Certainly way better than many of the smaller clubs.
So long as it ensures that Smith has a decent kitty for the summer I’m happy. If our team was a house he’ll need to gut the insides, replace all the floorboards and rewire it.
Your post is good news as it implies that our owners fully believe in the cause and that will mean a lot to everyone at the club from Purslow down.
I think Purslow has stated a couple of times that FFP wont be an issue even if we didnt get promoted this season. Given that he was on the ‘panel’ that set up FFP in the first place you have to think that we are not going to be affected by it! Moreover, given the wealth of our owners the EFL would be unwise to take them on, no doubt they already know this. The tail cant be allowed to wag the dog. ‘Restriction of trade’ will win the argument in court should it go that far!
Look forward to a very exciting summer with a new squad….funds will be readily available IMO for DS, thats not to say that we will waste it like we did in the past i.e. No 4 year contracts for 30 year olds on 50k a week. At long last ‘short termism’ will be out the window. We now have a proper structured plan in place that will see us sustainable and upwardly mobile!
UTV
I agree with Charlie Aitken – I’ve long argued that looking at losses in isolation doesn’t make any financial sense – if it did most of the Footsie 100 would have to close for business 🙂 Arguing against my earlier post – financially if a company substantially increases shareholder funds (issuing and selling additional shares) then losses become more sustainable and, IF that’s an admissible FFP arguement then Villa may be permitted to increase their allowable losses without incurring penalties.
As you say, if anybody knows their way around FFP it should be Purslow.
UTV
H60 I cant believe the owners would have bought us without knowing the implications, or possible implications of FFP. Besides which, should the owners wish to challenge any punishment dished out by the EFL they will win hands down. They didn’t become billionaires by rolling over and accepting every rule and regulation without questioning the legality of them. Moreover, they will have the finest lawyers that money can buy! No worries about FFP IMO!
Unbelievable news,
Aston Villa fans are in meltdown on Twitter after Dean Smith revealed that Jack Grealish will not be available for their trip to Stoke City on Saturday.
Villa posted on their official Twitter account that Grealish will not return for the weekend encounter, nor will midfield duo Tom Carroll and Henri Lansbury. Centre-back duo James Chester and Axel Tuanzebe also won’t be available.
The absence of their star man, who has been out of action since December, is the one that is hitting Vila the most because they have missed his presence and creativity in the middle of the park.
Things don’t read right to me, again a knock back on injuries.
I’m beginning to worry that JG’s injury is worse than we are led to believe….very worring. On the other hand perhaps the longer he is out the more chance of keeping him in the summer! I am really looking forward to a ‘spine’ of a team with theses players:
Kalanic
Guilber
Hause (if we sign him)
Mings (if we sign him)
McGinn
Grealish (if we can keep him)
The conspiracy theory within me is that the owners have given up on this season and want to protect Grealish from possible suitors…I love a good conspiracy, and who knows these days?
Bill, this season has gone. The owners have said Grealish is going nowhere – on that assumption, it’s not worth risking an escalation of his injury (which is clearly a lot more serious than we originally though – bone stress injury = fracture?) that might mean he misses a big chunk of next season as well.
We all know that as soon as he steps on the field, the opposition are going to start kicking lumps out of him!
Who cares about the injuries! Seasons over now anyway. If we hadn’t shipped out our best U23s they might have been given a game. Having said that I’m not denying that they won’t benefit from proper ‘mans’ football! Look on the bright side we still have Whelan, Jedinak, Bjarnnason and Hourihane available 😔
Yep, what a wonderful midfield we will have on Saturday! Would like to see Ramsey start with Whelan and Hourihane. Not too many options availabe. I hope we don’t start with both Whelan and Jedinak!
UTV
Not a bad shout if Ramsey gets a start. We have nothing to lose after all. Whelan and Jedi will be gone in the summer and we won’t learn anything by playing either IMO. What about Hourihane switching back to DM with Bjarnnason and Ramsey ahead with El Ghazi playing the Grealish role, then Kodja and Abraham as a front two. Problem is we haven’t really tried a different formation going back to Di Matteo time so not expecting anything radical if I’m honest.
Holte – interesting call on El Ghazi – I’ve read elsewhere that it’s a role he could perform.
What is clear is that no matter how Smith shuffles the deck, the majority of the players he inherited are not capable of playing the type of passing game which is his trademark.
Fans have questioned his ability to adapt the game plan but he has adapted HIS game plan by (in the absence of Grealish and Tuanzebe) understanding and reverting to an approach that best fits the squad he has. Any surprise then that it looks like a Bruce style squad playing Bruce style football?
I think as fans we need to get a big dose of reality and look to the future.
What was it Badger said about expectation?
I’m not saying that makes it any easier to accept.
UTV
Holte66…I like your team. Definitely worth a try IMO
Just a thought, who would rather see Steer in goal against Stoke? Even if Kalinic is fit to play!
I totally agree, I’m sure along with the vast majority of Villa fans, that this season is over, promotion-wise.
So Smith has plenty of room for movement in trying things out.
My worry is that he won’t see it and will stick with the tried and proven failures that will leave soon, simply because it’s “the logical thing” to do, a la Bruce.
The “tried and tested” available mids combination worries me.
For me, Smith needs to admit that we’ve blown it this season.
And we look to properly change the philosophy as of now.
The sooner the better, as we can’t keep playing with mids who will just get steamrollered.
As for Grealish, well, I suspect it’s just the way it is.
In fairness, Smith has played things down, as opposed to all the talk about him coming back imminently.
It’s no big deal for me.
His not playing highlights how poor we are otherwise.
I’d guess that DS, being a manager, will keep trying for promotion until it’s mathematically certain to be impossible. In that case he’ll do his best to get something from every match whatever anyone thinks. So that might explain him sticking with some players rather than throwing all the kids in.
I personally think the season’s gone but I guess that Smith has to believe that it’s still possible.
Hi.
Was looking up FFP- as I take an interest. IMO there is no way there should be any sweetheart deal between EFL and Aston Villa- we had to sell Flint, Bryan and Reid plus squad players this summer. Remarkably we are 6th and in with a chance of the playoffs but regardless of the rebuild, we had to comply- so should everyone yourselves included.
I know you got new owners but the profit and loss scenario should keep rolling. Not their fault no but in terms of fair competition any deal should be challenged by those clubs who make big efforts and sacrifices to comply, in court if necessary.
Debt write offs are great, undoubtedly so and I wish no ill on yourselves or other clubs but in no way should new owners be able to bail you out of FFP obligations- or anyone else for that matter. I’d say the same if it was us!
I don’t think anyone is suggesting that Villa should be made an exception, however there are (have been) questionable decisions made by EFL particularly over Wolves transfer dealings last season.
If we are honest, none of us fully understand how FFP works and there have been challenges in court which resulted in the rules being relaxed in 2015.
The question being asked is whether substantial shareholder funds which demonstrate that losses (debt) are fully covered / affordable should be taken into account.
You will also find that there are discussions on here over what we will be able to do in the summer and whether any of our prize assets will have to sold to fund any acquisitions.
BristolCityFanInPeace,
Hitchens60 is right.
No one is asking for an exception as such.
It’s more looking at why FFP was brought about.
I’m suggesting the main reason is to stop clubs going bust.
But you do have a valid point in that if the main reason is just to stop clubs gaining an unfair advantage, there should be no allowances for any club.
The part that confuses me is that both reasons are similar, because if you have massive debt, above the limits, it implies that you increase the risk of going bust as well as having an unfair advantage.
The fact remains that our CEO, who was on the comittee that created the FFP rules is insistent that we won’t have a problem, even though we’ve easily exceeded the limits.
To my mind, there must have been some sort of understanding reached, as I can’t see how else we’d evade punishment.
I suppose the only other option would be to change FFP rules and replace them with some sort of cap on spending, but how would that work?
A percentage of a clubs income, perhaps?
Either way, the bigger clubs would have an advantage.
Say, a £100mill per season?
Same applies.
There’s also the point that a club with a massive spend/debt may have everything quite happily in control and can pay it off quite easily.
In which case, FFP is a restiction of trade, simple.
If true or not? It’s being said that Chelsea have a ban on two Windows with the FFP, to me that would put the damper down on buying Tammy. anyone heard if that’s true.
Bill, it’s a two window ban in regard to breaking rules over youth players. Haven’t bothered to read the whole article – just quoting BBC headlines.
Thanks Hitch , you pointed me to that news. It’s BBC sports news.
Chelsea have been banned from signing players in the next two transfer windows for breaching rules in relation to youth players, Fifa has announced.
The ban, until the end of January 2020, does not prevent the release of players and will not apply to their women’s and futsal teams.
The Premier League club have said they will appeal against the decision.
Chelsea have also been fined £460,000, while the Football Association (FA) has been fined £390,000.
It comes following a Fifa investigation into Chelsea’s signing of foreign under-18 players, including former striker Bertrand Traore.
The world governing body says it found breaches in 29 cases out of 92 investigated.
“We welcome the fact Fifa has accepted that there was no breach in relation to 63 of these players, but the club is extremely disappointed that Fifa has not accepted the club’s submissions in relation to the remaining 29 players,” said a statement from the Stamford Bridge club.
“Chelsea acted in accordance with the relevant regulations and will shortly be submitting its appeal to Fifa.”
The FA has been told by Fifa that it must “address the situation” regarding the international transfer and registration of minors.
A spokesperson for English football’s governing body said it had “co-operated fully” with the investigations and had “raised some concerns” regarding Fifa’s disciplinary processes.
A statement said: “The FA intends to appeal against the decision. We will, however, continue to work with Fifa and Chelsea in a constructive manner to address the issues which are raised by this case.”
It also gives you how it happens..
Either Real or Barce appealed against a similar thing and the ban ws put back for a year, I think.