Date: 17th October 2018 at 11:00am
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I think I’ve ably demonstrated previously I’m not a Financial Fair Play expert, so much so, in fact, I don’t actually call it the Profit And Sustainability Rules but it has been a massive topic of conversation amongst fans at Aston Villa given our summer meltdown and financial issues under Dr Tony Xia’s leadership. In fact, it has been a topic of debate for a lot longer than that – it was just never as important as it seemed this summer.

For anyone who hasn’t seen his words from the press conference at the beginning of the week, the Birmingham Mail provide a transcript.

“If that includes players leaving and joining in January, then that will be absolutely fine.”

In short, if we need to sell in January we will and thus, our new setup can strengthen with signings if necessary. Prefacing with sales is the important point I believe.

As for FFP more directly ‘we are navigating within’ the rules.

“I’m not just confident, I’m highly respectful of the regime. The profitability and sustainability rules that govern the league we play in and the broader Fair Play regime that, many years ago, I sat on the working group and brought those rules in. We’re highly respectful of them and are of course navigating within those rules. It changes nothing. We are determined to support our new management team in improving this squad where needing to do so and can easily do so with the financial resources within the rules.”

A very carefully selected choice of words for me, that are clearly confident but don’t give much away – fans are encouraged to read into it – but we already know Smith hasn’t as of yet been a big spending manager, so if we sell someone for a million, the chances are the replacement will be £500,000.

It doesn’t stop us strengthening, but it also doesn’t mean we’re going to suddenly splash the cash again.

Fans also need to remember that the actual assessment for FFP doesn’t take place until next March, so although the upper reaches of the club will have forecasts and Purslow’s knowledge of the original rules will be helpful (but he doesn’t say he sat on the working group panel for the recent changes), absolutely no-one outside of the club knows our exact financial position or where we sit with regards to the rules.

The sensationalist headlines in the media, are just that and if you look at reports – as I’ve said before – nobody actually claimed we’d suffer a points deduction, a fine or anything – the media simply leaned on the previous guff about £50million financial holes (always felt inflated based on figures we knew) and then referenced possible punishments, leaving fans to jump to their own conclusions.

He also commented.

“Thanks to our new majority owners, we have a completely clean balance sheet, the financial problems the club had incurred were all cleared with the investors’ money and we now have a very strong financial base.”

Again, it requires a distinction – the clubs’ financial problems may well be over, our balance sheet from all the charges and loans taken out as we groped for cash flow will undoubtedly be solved. But that is not directly tied to Financial Fair Play as simply put, it is one of the main criticisms of the Financial Fair Play rules that it limits an owner from spending under the Rules. Nassef Sawiris and Wes Edens could put £40trillion into the clubs accounts and we’d be in an incredibly strong financial position.

But it wouldn’t count for FFP because it’s not money the club earned through turnover – ergo, within its own means.

So I can’t overly read into his words other than saying, the rumoured position of the club was probably not as bad as stated, and we did a lot of work on FFP under the previous regime and we no doubt continue to do so. Within the rules is all we need to achieve but again new owners, and Purslow’s words shouldn’t be read as we won’t have a problem if we take our eye off the ball and it shouldn’t be read as the wallet is freely open again in my humble.

 

5 Replies to “Purslow’s Words About Villa & FFP Cause A Bit Of A Stir – An Attempt At Some Clarity”

  • I thought ffp was based on annual income and expenditure with maximum loss of 15mil in Championship per season allowed if owners put in equity in that season, i also thought we had already recorded and filed losses in excess of 30mil for last two seasons. leaving little room for manoeuvering, i’m assuming wages decreased with Gabby and the loan players leaving, but with our final parachute decreasing any savings in wages would be lost to that decreases in revenue. this is not even accounting for new loans this season.

    I hope we have some clever accountants or previous losses we incorrect.

    • It’s over a 3yr period but yes, with injection from the owners the applicable losses do rise and we’ve taken full advantage of that. The irony being FFP aims to make a club self-sustaining and not funded by owners! The crux is, as you say, how much did we save with players/loanees leaving compared to the drop in parachute payment. The last two years we’ve been within FFP by a hair (of questionable size) so if we balance again we are fine. Even with filing losses, as long as they were within the parameters that’s fine and nobody but the club truly knows how close to the line we have been, just some educated guesswork suggests on an FFP basis we are nowhere near the doom within the media but it’ll be tight. How tight of course, doesn’t matter, as long as we’re on the right side of it.

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