Financial fair play

[Malandro]

"In a document on Companies House dated February 2, 48 hours after the transfer window shut, the club sold on future income due on Amavi and Sanchez to the Australian Macquarie bank"

From the Daily Record.

It's going to be a very interesting summer and season.

[ozzjim]

Which means we will have lost money on that. Sounds a bit odd. I'm sure there's an accountant or 2 that will tell us what the implications of it are.

[Risso]

"In a document on Companies House dated February 2, 48 hours after the transfer window shut, the club sold on future income due on Amavi and Sanchez to the Australian Macquarie bank"

From the Daily Record.

It's going to be a very interesting summer and season.

That sounds like a standard factoring arrangement to be honest.  Although I can't see where it's mentioned on Companies House to have a closer look.

[andyh]

I read a very valid point somewhere that said something along the lines of:-

“when the outcome of a single football match sends one club into financial nervana and the losing club into (what looks like) financial meltdown, then something is not right with the system”.

I think they are right.

[Malandro]

"In a document on Companies House dated February 2, 48 hours after the transfer window shut, the club sold on future income due on Amavi and Sanchez to the Australian Macquarie bank"

From the Daily Record.

It's going to be a very interesting summer and season.

That sounds like a standard factoring arrangement to be honest.  Although I can't see where it's mentioned on Companies House to have a closer look.

I can't see it either, weird.

[Risso]

It's not unusual for companies to take such measures to smooth cash flow when they know something is coming in, but for a company like Villa it's a little bit odd I'd say.  If Tony has got oodles of cash, why doesn't he just give the club a short term sub until outstanding transfer fee installments from other clubs are paid, rather than paying a percentage of the fee to a bank in factoring charges?

[sirlordbaltimore]

I know absolutely nothing about accounts, but that does sound a bit worrying to me

[AsTallAsLions]

Hmmm. Tony Tony Tony. What have you been up to.

[andyh]

If you know nothing about accounting why would anyone be worried about some accounting practices ?

[Risso]

I know absolutely nothing about accounts, but that does sound a bit worrying to me

Invoice discounting and factoring are used by companies to smooth their cash flow.  They basically sell their debts to the bank/factoring comany for a small percentage of the amount outstanding, in order to get the cash in more quickly.  It tends to happen where a company has say, 30 day payment terms with its customers, but has to pay staff or suppliers sooner than that.  You often see it where a small company is dealing with a much bigger one, eg Tesco suppliers, who are being held to difficult credit terms, eg 90 days, or smaller companies who are in their first few years of operation.  When I was an auditor for PwC, I used to audit a few factoring companies and banks who provided this sort of finance, and never saw a company like Villa using their services.  It's not necessarily a big deal, but you know, something else to make you go "hmmmmmm".

[Lastfootstamper]

The mirror have now picked up this story, with the added information that we weren't due the final instalment of €4m of the Amavi fee until July '19. We hadn't had the first one yet, either.

[Drummond]

Hello Mirror journo. Nice to see you trawling around for stories

[pauliewalnuts]

It's not unusual for companies to take such measures to smooth cash flow when they know something is coming in, but for a company like Villa it's a little bit odd I'd say.  If Tony has got oodles of cash, why doesn't he just give the club a short term sub until outstanding transfer fee installments from other clubs are paid, rather than paying a percentage of the fee to a bank in factoring charges?

Indeed. It looks somewhat concerning.

[David_Nab]

Well it doesn't sound good does it .....

[tomd2103]

I read a very valid point somewhere that said something along the lines of:-

“when the outcome of a single football match sends one club into financial nervana and the losing club into (what looks like) financial meltdown, then something is not right with the system”.

I think they are right.

Also something wrong with a system where billions of pounds are generated by a particular sport each year yet grassroots facilities in that sport remain a substandard in many cases.