FFP

[Percy McCarthy]

Just had a quick skim read of the report for those interested (and if you’re on this thread I assume you are). Ranking places based on top 25 clubs, figures in €.

Total Revenue up 37% from 322m to 441m (up 6 places in rankings to 13th). “Revenue among the top 25 clubs remains polarised,
with a €350m gap between the eighth and 13th clubs, Manchester United and Aston Villa FC.”

Domestic TV revenue up 2% from 199m to 203m. (Down 2 places in rankings from 4th to 6th).

Hospitality revenue up 58% from 46m to 73m (up 11 places in rankings to 15th).

Commercial revenue up 46% from 56m to 81m (up 16 places in rankings to 22nd).

Kit & Merch up 349% from 6m to 26m (up 37 places in rankings to 23rd)

UEFA Revenue up from 16m to 84m

OPEX up 100% 73m to 146m. (Up 16 places in rankings to 13th).

Losses down to 97m from 100m

Wages up 6% from 293m to 309m. (Down 1 place in rankings to 11th).

Number of staff up from 609 to 743. (Up 4 places in rankings to 16th).

[Rudy Can't Fail]

Wow - so were basically selling Rogers in the summer.

I would say without question we need to be moving all of Martinez, Digne and Watkins on in the summer. All been excellent servants for us but we've had their best years so for the wages they're on we need to be a bit ruthless and tell their agents to start looking for new clubs.

Tell their agents nothing until we've qualified for the Champions League.

[TheToffnar]

Not all doom and gloom then. I'm assuming the uptick for many of those things was largely down to being a CL side?

Insane to think that 5m of our overall spending was on Axel fucking Disasi...

Surely the money needed to bring us in line has already been somewhat generated? Malen, possibly Guessand sales are around the 55-60m mark. Or am I looking at the whole thing wrong?

[Percy McCarthy]

Wow - so were basically selling Rogers in the summer.

We are more likely than not to get CL income so that will cover a fair chunk of a loss. Pretty sad we need CL income most years when that is far from guaranteed as we saw last season.

I would say without question we need to be moving all of Martinez, Digne and Watkins on in the summer. All been excellent servants for us but we've had their best years so for the wages they're on we need to be a bit ruthless and tell their agents to start looking for new clubs.

This is where we'll see how long term the vision really is as it has become very short term in last few years to get in CL just signing short term options like Sancho and Rashford to try to get bursts of form going in the league.

We should comfortably meet the 85% wage ratio for prem but the UEFA one is going to be more of a challenge with our current squad.

The PL wage ratio is 70% for clubs who qualify for Europe, 85% if not.

[Beard82]

And everyone laughed at Arsenal having an open top bus parade each time they won fuck all but got 4th place and Champions league - they had that for almost 20+ years in a row.

As for the Red Filth (and it chokes me to say this) but it is not a debt of £1.3B as we know it. Someone explained to me not so long ago that if you had a mortgage on a house for £5Mil you would owe the back £5m. If the payments were £10K per month, but you earned £15K and were able to pay at least the interest then technically you are not in current debt. The Glaziers have mortgaged Red filth to the limit but their (although dropping off the longer they are shit and out of Champs league) commercial income easily pays the debt. Each year they mortgage again up to the level they can based on commercial income.

The issue is what happens when the Glaziers leave - who would incur the debt then? (not that i give a flying fuck)

This maybe utter shit but it does seem to make sense of why they can just keep spunking money each window

Or what happens if interest rates spiral - or they need to borrow 2bn to build there new stadium.  I get its not an immediate debt and how many businesses and people operate.  I dont care what they do - its just you can easily make the case that we are in a better financial situation than them - but are being forced to sell players at under market value. 

Basically if man utd have an interest only mortgage,   then we own our house and have rich parents.  But they cant give us money because that not fair on people without rich parents - so were selling our car on the cheap to the people that earn more than us.  And then we cant earn more because those earning more have got the car we need to drive to the better paid job. 

[Rigadon]

As ever, there's the opinion that we just need to get on with it and do the best we can, climbing up the greasy pole to parity bit by painstaking bit and taking our medicine on the way while praying Emery doesn't see the glass ceiling as being unbreakable .  Then there's the opinion that there's no point trying to compete against a rigged system.  I'm not convinced by either point of view to the extent that I'm firmly in either camp for any given length of time. 

Looking at it through the notion of selling our best young player since I can remember, one who's made watching the villa as enjoyable as I can remember, to invest in the squad so we can compete against anybody in the world under a genius manager?  I can live with it.  Selling that player to a club who the unfair rules have been applied to protect, so we can comply with said rules?  That can fuck right off and it puts me all into the 'what's the fucking point' camp.

[Smithy]

Was reading an article on the BBC earlier about Manchester United's debt now rising to £1.3bn which linked to some other articles.  One of them broke down the Deloitte money table in to categories of match day, broadcast and commercial income.  In terms of English clubs, it was (in Euros):

Liverpool - 149,800 / 320,700 / 365,700
Man City - 89,300 / 331,500 / 408,400
Arsenal - 183,100 / 324,600 / 314,000
Man Utd - 190,700 / 205,800 / 396,600
Spurs - 150,500 / 192,400 / 329,700
Chelsea - 103,200 / 241,800 / 239,000

Aston Villa - 80,200 / 286,700 / 83,300

Newcastle - 67,600 / 191,600 / 139,200

West Ham - 47,100 / 157,500 / 71,400

Inter Milan - 108,000 / 277,000 / 152,500
Bor Dortmund - 94,900 / 227,200 / 209,200
Atl Madrid - 79,900 / 218,600 / 156,000

Some interesting comparisons there as you've got the so called 'Big Six', Newcastle who are probably about on a par with us and then West Ham who are obviously the highest of the rest of the Premier League.  The things that stand out for me when comparing us with Newcastle and West Ham is the massive difference in broadcast income that the Champions League brings.  Interesting that it also put us ahead of Man Utd, Chelsea and Spurs in that area, and that the double whammy of Premier League and Champions League put us above the 3 European sides directly above us. 

Again presuming that being in the Champions League put our matchday revenue ahead of Newcastle and West Ham, but we were considerably behind the English clubs in the top ten on the list (Man City's figures looks low though??).  It's the commercial figure that is the real eye opener and that some of the Premier League clubs earn nearly 5 times what we do in that area.  How do they manage that and that just seems a massive gap to get anywhere remotely near bridging.  The figures for Real Madrid, Barcelona, Bayern Munich and PSG are even more eye-watering.
 

When our 80-ish million a year in commercial revenue is 300-ish million a year, like some of the other top 6 sides, THEN we'll start to compete on a more level playing field, but I'd be surprised if we get there before the ground redevelopment is complete for the 2028 Euros - more likely a year or two after that. Our figures for the 29/30 season should be getting close to the others, all other things being equal.

The real challenge for the next few years, is being able to keep the team competitive, with one hand behind our back, financially speaking, until we can get close to the others commercially.  And Unai is absolutely crucial to that.

How do we get from where we are now in terms of commercial earnings to 300m+ which is over 200m more?

Again, it doesn't happen quickly.  Firstly we need more fans buying shirts and other Villa-related stuff (which requires on-field success).  Then we need our sponsors to pay us much more (which requires on-field success), and we need new sponsors and brands who want to be associated with us in new and creative ways (this requires on-field success AND creative people in our management team). 

I posted about this a while ago, but go and look at Manchester United's partner and sponsors page.  They have an "official wine partner" an "Official Medical Systems Partner" an "Official Mattress and Pillow Partner" an "Official Skincare partner".  Plus MANY more.  None of these is shirt-sponsor money, but it add MILLIONS every year.  But you only get this type of thing when brands are falling over themselves to associate with you.  Which, again, comes from on-field success.

Then you've got the main shirt sponsors, the ones everyone has - the 'big 6' all have deals worth £20-40 million A YEAR more than ours.  Assuming the multipliers are similar for training gear, sleeves etc, they could all be getting £60m a year more than us from their primary sponsors alone.

There is no single step that gets bridges that £200m gap in one go, or even over a year or two.  It's a series of incremental, inextricably linked, cumulative, smaller steps.  We're ON that set of steps now, but we're still nearer the bottom than the top, and it will take a few years to get there, as long as we keep maintaining a moderate level of success on the pitch.

I've been saying since Unai got us into Europe in his first year, the gap we REALLY need to bridge, financially speaking, is the commercial revenue one.  THAT is the number that will determine whether we can compete long-term, across squad renewals, and across managerial changes.  As others have said, Spurs are not very good right now, but they can absorb that lack of on-field success for a few years because of an enormous commercial operation.  THAT's the position you need to be in, in order to compete long term (unfortunately).

When you're relying on Champions League money to determine whether or not you can compete from season to season, it will only ever end badly (eventually), because you're one bad season from a fire sale.  But get that commercial number up to a moderately competitive level, and it will give us a buffer against collapse/fire sales due to a bad year on the pitch.

We had this opportunity a few times in the 90s, and under Doug we didn't take the necessary steps - but I'm confident the ownership we have now will do what is necessary to get us there.

[Percy McCarthy]

Not all doom and gloom then. I'm assuming the uptick for many of those things was largely down to being a CL side?

Insane to think that 5m of our overall spending was on Axel fucking Disasi...

Surely the money needed to bring us in line has already been somewhat generated? Malen, possibly Guessand sales are around the 55-60m mark. Or am I looking at the whole thing wrong?

Yes, quite a lot of that is due to CL football.

Re: your last point, yes, it all helps, although under UEFA SCR, income and expenditure from player trading is spread over three years of accounts. So Ramsay for instance is a £13m positive for this year and the next two, whereas under PL PSR it’s an instant £39m pure profit hit.

Need Roma to qualify for CL or EL to make Malen permanent, although I think somebody would buy him even if they don’t. Barrenechea is another who’s worth a few million on the books, hopefully more if Benfica sell him in future. There’s always the possibility that Guessand develops at Palace and we want him back more than they want to buy him I suppose.

It all highlights the attraction of the likes of Wilson, Mingueza, Sancho. The UEFA report mentions that clubs are managing sales of assets well, with only 3 to 4% of players leaving on free transfers.

[Hookeysmith]

Does anyone else feel though that if we navigate through
FFP
PSR
SCR

There will be something else to trip us u(and any other ambitious side) up along the way

Its such a rigged deck i am not sure when it goes from a motivational challenge for the likes of NSWE and Unai to being just not worth it anymore

Really sad state of affairs

[TheToffnar]

Not all doom and gloom then. I'm assuming the uptick for many of those things was largely down to being a CL side?

Insane to think that 5m of our overall spending was on Axel fucking Disasi...

Surely the money needed to bring us in line has already been somewhat generated? Malen, possibly Guessand sales are around the 55-60m mark. Or am I looking at the whole thing wrong?

Yes, quite a lot of that is due to CL football.

Re: your last point, yes, it all helps, although under UEFA SCR, income and expenditure from player trading is spread over three years of accounts. So Ramsay for instance is a £13m positive for this year and the next two, whereas under PL PSR it’s an instant £39m pure profit hit.

Need Roma to qualify for CL or EL to make Malen permanent, although I think somebody would buy him even if they don’t. Barrenechea is another who’s worth a few million on the books, hopefully more if Benfica sell him in future. There’s always the possibility that Guessand develops at Palace and we want him back more than they want to buy him I suppose.

It all highlights the attraction of the likes of Wilson and Mingueza. The UEFA report mentions that clubs are managing sales of assets well, with only 3 to 4% of players leaving on free transfers.

Thanks, appreciate you laying it out. Essentially then, should the agreements on certain saleable assets already in place qualify for a sale, we don't really need to flirt with the prospect of turning over big first team players to stay in line, CL or otherwise? Or am I completely missing the mark in respect of 'profit', seeing as we're essentially selling them for the same or little more then the initial fee, so wouldn't count at all?

[Mister E]

Wow - so were basically selling Rogers in the summer.

We are more likely than not to get CL income so that will cover a fair chunk of a loss. Pretty sad we need CL income most years when that is far from guaranteed as we saw last season.
I would say without question we need to be moving all of Martinez, Digne and Watkins on in the summer. All been excellent servants for us but we've had their best years so for the wages they're on we need to be a bit ruthless and tell their agents to start looking for new clubs.
This is where we'll see how long term the vision really is as it has become very short term in last few years to get in CL just signing short term options like Sancho and Rashford to try to get bursts of form going in the league.
We should comfortably meet the 85% wage ratio for prem but the UEFA one is going to be more of a challenge with our current squad.

Yes, that sounds more sanguine about the situation.

[KevinGage]

I know I moan on about this but I think we should be taking legal action of some type to try and get these rules updated.  The problem is were back at the reverse Sam vimes boot theory. Selling players we own and can afford for less then there worth because a lot of clubs with much more debt tell us to.  Who then get the players way below market rate hence keeping us poor for ever

Exactly that.

[Mister E]

Was reading an article on the BBC earlier about Manchester United's debt now rising to £1.3bn which linked to some other articles.  One of them broke down the Deloitte money table in to categories of match day, broadcast and commercial income.  In terms of English clubs, it was (in Euros):

Liverpool - 149,800 / 320,700 / 365,700
Man City - 89,300 / 331,500 / 408,400
Arsenal - 183,100 / 324,600 / 314,000
Man Utd - 190,700 / 205,800 / 396,600
Spurs - 150,500 / 192,400 / 329,700
Chelsea - 103,200 / 241,800 / 239,000

Aston Villa - 80,200 / 286,700 / 83,300

Newcastle - 67,600 / 191,600 / 139,200

West Ham - 47,100 / 157,500 / 71,400

Inter Milan - 108,000 / 277,000 / 152,500
Bor Dortmund - 94,900 / 227,200 / 209,200
Atl Madrid - 79,900 / 218,600 / 156,000

As well as the obvious comment made by Smithy above re commercial income, the other interesting item are the matchday figures. Being so close to Citeh and above Noocastle and Atl. Madrid is positive (although it's in a year when we were playing ECL games, where more per-head spend per match will have been achieved, I'm guessing).
We're doing all the right things but it takes time and relies on a top 5 this season.

[Mister E]

I know I moan on about this but I think we should be taking legal action of some type to try and get these rules updated.

We've tried to persuade the Premier League clubs to revisit the rules, but not enough clubs supported us.

Selling players we own and can afford for less then there worth because a lot of clubs with much more debt tell us to.  Who then get the players way below market rate hence keeping us poor for ever

Who've we sold cheaply to more debt-laden clubs? - in all the sales we've made recently, I'd say that Barrenechea has been undervalued (and, I think we have a sell-on on him) and Azaz was inexpensive for Boro (but that may have been partially as an offset on the Rogers price), but we've generally got decent fees

[Percy McCarthy]

Not all doom and gloom then. I'm assuming the uptick for many of those things was largely down to being a CL side?

Insane to think that 5m of our overall spending was on Axel fucking Disasi...

Surely the money needed to bring us in line has already been somewhat generated? Malen, possibly Guessand sales are around the 55-60m mark. Or am I looking at the whole thing wrong?

Yes, quite a lot of that is due to CL football.

Re: your last point, yes, it all helps, although under UEFA SCR, income and expenditure from player trading is spread over three years of accounts. So Ramsay for instance is a £13m positive for this year and the next two, whereas under PL PSR it’s an instant £39m pure profit hit.

Need Roma to qualify for CL or EL to make Malen permanent, although I think somebody would buy him even if they don’t. Barrenechea is another who’s worth a few million on the books, hopefully more if Benfica sell him in future. There’s always the possibility that Guessand develops at Palace and we want him back more than they want to buy him I suppose.

It all highlights the attraction of the likes of Wilson and Mingueza. The UEFA report mentions that clubs are managing sales of assets well, with only 3 to 4% of players leaving on free transfers.

Thanks, appreciate you laying it out. Essentially then, should the agreements on certain saleable assets already in place qualify for a sale, we don't really need to flirt with the prospect of turning over big first team players to stay in line, CL or otherwise?

Honestly mate, I think only forensic inside knowledge of the figures could tell us that with any certainty. I do think CL is very important though.

Also agree with Smithy’s points on commercial partners, but would add that each pound from wherever it comes is as important. So The Warehouse (and other possible local developments) to increase matchday and non-matchday income are vital, not to mention more reliable than on-field success. Making money from the academy is also something we’re really good at, only bettered by Chelsea the last I heard.