FFP

[tomd2103]

Depreciation is a cost relating to the reduction in value of fixed assets, and therefore isn't included in the FFP calculations.

Apologies if this is a stupid question, but how does that relate to the stadium and would every club have that?  Also, is that £72m figure fixed or does it fluctuate?

[AV82EC]

It got posted elsewhere earlier, but unfortunately, and I can't emphasise that word enough when it comes to this with these, unfortunately I don't think they're in trouble. They're just cash skint. I'll be gutted if our winning a European trophy helps them out.

Of course it could be argued that because we didn’t have a European Club coefficient last summer we used the country one contributed to by Spurs and all the other teams we detest, so swings and roundabouts.

[Risso]

Depreciation is a cost relating to the reduction in value of fixed assets, and therefore isn't included in the FFP calculations.

Apologies if this is a stupid question, but how does that relate to the stadium and would every club have that?  Also, is that £72m figure fixed or does it fluctuate?

If a club owns their stadium, then yes. Usual practice is about 2% of the value every year. This doesn't apply to the land. Obviously, we don't own Villa Park any more, so this won't apply and we'll just be charged rent from the company (owned by Nas and Wes) that bought the stadium.

[tomd2103]

Depreciation is a cost relating to the reduction in value of fixed assets, and therefore isn't included in the FFP calculations.

Apologies if this is a stupid question, but how does that relate to the stadium and would every club have that?  Also, is that £72m figure fixed or does it fluctuate?

If a club owns their stadium, then yes. Usual practice is about 2% of the value every year. This doesn't apply to the land. Obviously, we don't own Villa Park any more, so this won't apply and we'll just be charged rent from the company (owned by Nas and Wes) that bought the stadium.

Cheers for the answers Risso.  So does that £72m count as a deductible for FFP purposes?  The article states that their losses are £220.7m over the three year period but akes out that the annual depreciation of £72m comes off that, so they are nowhere near the FFP (or is it P&S?) threshold.

[Brazilian Villain]

Cheers for the answers Risso.  So does that £72m count as a deductible for FFP purposes?  The article states that their losses are £220.7m over the three year period but akes out that the annual depreciation of £72m comes off that, so they are nowhere near the FFP (or is it P&S?) threshold.

Based solely on the above, it looks like their losses are £220.7m over 3 years, including a depreciation charge of £72m p.a. or £216m. If that's exempt for FFP purposes, it would then be added back to leave them with losses of £4.7m for the 3 year period.

[Dante Lavelli]

Having that massive stadium that cost a fortune to maintain both in depreciation and interest payments, yet brings in massive revenue was a master stroke by Levy.

Building a massive stadium seems to be the cheat code to get round the FFP rules (assuming the owners have the cash).

[Risso]

Having that massive stadium that cost a fortune to maintain both in depreciation and interest payments, yet brings in massive revenue was a master stroke by Levy.

Building a massive stadium seems to be the cheat code to get round the FFP rules (assuming the owners have the cash).

Well, not really. It just gets ignored. If they haven't made losses, it's because their wages don't outstrip their revenue like ours do.

[Dante Lavelli]

Having that massive stadium that cost a fortune to maintain both in depreciation and interest payments, yet brings in massive revenue was a master stroke by Levy.

Building a massive stadium seems to be the cheat code to get round the FFP rules (assuming the owners have the cash).

Well, not really. It just gets ignored. If they haven't made losses, it's because their wages don't outstrip their revenue like ours do.

Under FFP it seems to me that the debt attached to a stadium is valued differently compared to the debt attached to wages/transfers i.e. it can be deducted from losses. Furthermore the extra income the stadium provides gives extra headroom to invest more in players, so it’s a decent multiplier.

[ChicagoLion]

Having that massive stadium that cost a fortune to maintain both in depreciation and interest payments, yet brings in massive revenue was a master stroke by Levy.

Building a massive stadium seems to be the cheat code to get round the FFP rules (assuming the owners have the cash).

Well, not really. It just gets ignored. If they haven't made losses, it's because their wages don't outstrip their revenue like ours do.

Under FFP it seems to me that the debt attached to a stadium is valued differently compared to the debt attached to wages/transfers i.e. it can be deducted from losses. Furthermore the extra income the stadium provides gives extra headroom to invest more in players, so it’s a decent multiplier.

I think you are confusing debt with costs and expenses.

[Risso]

Under FFP it seems to me that the debt attached to a stadium is valued differently compared to the debt attached to wages/transfers i.e. it can be deducted from losses. Furthermore the extra income the stadium provides gives extra headroom to invest more in players, so it’s a decent multiplier.

It doesn't work like that at all. You can obviously spend what you like on a stadium without it affecting FFP, but that doesn't affect the stuff that does, like revenue, wages and amortisation.

[Beard82]

Under FFP it seems to me that the debt attached to a stadium is valued differently compared to the debt attached to wages/transfers i.e. it can be deducted from losses. Furthermore the extra income the stadium provides gives extra headroom to invest more in players, so it’s a decent multiplier.

It doesn't work like that at all. You can obviously spend what you like on a stadium without it affecting FFP, but that doesn't affect the stuff that does, like revenue, wages and amortisation.

Interest payments must effect FFP though?  I think the point people are trying to make is that if you spend money on a new stadium and increase your revenue as a result then its a good move from an FFP perspective because the additional revenue created helps FFP the most of the costs you sunk into achieving that increased revenue arent counted against it. 

[SamTheMouse]

It means investing in bigger and better facilities is a no-brainer. Which makes it all the more mystifying why we appear to have slammed the brakes on in that department.

[tomd2103]

Under FFP it seems to me that the debt attached to a stadium is valued differently compared to the debt attached to wages/transfers i.e. it can be deducted from losses. Furthermore the extra income the stadium provides gives extra headroom to invest more in players, so it’s a decent multiplier.

It doesn't work like that at all. You can obviously spend what you like on a stadium without it affecting FFP, but that doesn't affect the stuff that does, like revenue, wages and amortisation.

I might have git this badly wrong (apologies if that is the case), but has the new stadium had that much of an impact for Spurs if they have lost £80m +?  It seems that it is that £72m depreciation that is keeping them out of FFP trouble, as opposed to increased revenue? 

As an aside, it said on the radio earlier that this is the first time in 14 years that they had not been in European competition. 

[pauliewalnuts]

It means investing in bigger and better facilities is a no-brainer. Which makes it all the more mystifying why we appear to have slammed the brakes on in that department.

I think it's because we've realised spunking 120m on a new north stand isn't going to make enough difference, and the only way we can do that is to build a new ground.

I know I keep saying this, but the clues are all there. Heck and his "it's not just about one stand, it's about improving things for all fans" comment in his canning-it statement. Altairos. Pointing out the poor public infrastructure. Not even building Villa Live.

Honestly, I reckon all the clues are there.

[pauliewalnuts]

Under FFP it seems to me that the debt attached to a stadium is valued differently compared to the debt attached to wages/transfers i.e. it can be deducted from losses. Furthermore the extra income the stadium provides gives extra headroom to invest more in players, so it’s a decent multiplier.

It doesn't work like that at all. You can obviously spend what you like on a stadium without it affecting FFP, but that doesn't affect the stuff that does, like revenue, wages and amortisation.

I might have git this badly wrong (apologies if that is the xase), but has the new stadium had that much of an impact for Spurs if they have lost £80m +?  It seems that it is that £72m depreciation that is keeping them out of FFP trouble, as opposed to increased revenue? 

As an aside, it said on the radio earlier that this is the first time in 14 years that they had not been in European competition. 

Surely the answer to that is they'd have lost much more money without the extra revenue of the new stadium. That's going to be an absolute game changer for them.

And the no European competition thing won't have any accounts impact until next year's.