PIF, PCP, and RB Sports & Media

[r0cafella]

3 minutes ago, GeordieT said:

I’m a subscriber so will post a few choice excerpts later today, it’s an illuminating read as usual.

 

On FFP, his suggestion is this season might have been closer than anyone else previously had imagined:

 

 

“PIF inherited a pretty solid FFP position from Ashley, as the former owner’s tightfisted approach to spending meant that they had a fair amount of wriggle room.

 

In fact, I estimate that they were £109m better than the £105m maximum allowed loss over the three-year monitoring period up to 2021/22 (including the single period average of the COVID-impacted 2019/20 and 2020/21 seasons).

 

However, the FFP monitoring period is a moving target, so the 2022/23 calculation dropped the £41m 2018/19 profit, replacing it with last season’s £73m loss, i.e. a negative swing of £114m.

 

After making deductions for “healthy” expenditure (infrastructure, academy, community and women’s football) and COVID losses, I reckon that Newcastle were still just about within target, but it must have been mighty close”.

Thanks for sharing!

[TheBrownBottle]

9 minutes ago, GeordieT said:

I’m a subscriber so will post a few choice excerpts later today, it’s an illuminating read as usual.

 

On FFP, his suggestion is this season might have been closer than anyone else previously had imagined:

 

 

“PIF inherited a pretty solid FFP position from Ashley, as the former owner’s tightfisted approach to spending meant that they had a fair amount of wriggle room.

 

In fact, I estimate that they were £109m better than the £105m maximum allowed loss over the three-year monitoring period up to 2021/22 (including the single period average of the COVID-impacted 2019/20 and 2020/21 seasons).

 

However, the FFP monitoring period is a moving target, so the 2022/23 calculation dropped the £41m 2018/19 profit, replacing it with last season’s £73m loss, i.e. a negative swing of £114m.

 

After making deductions for “healthy” expenditure (infrastructure, academy, community and women’s football) and COVID losses, I reckon that Newcastle were still just about within target, but it must have been mighty close”.

It also means that this season will need to record c£13m profit in FFP terms.
 

There’s no give at all in the numbers. 

[r0cafella]

FFP working as intended, hats off to the sky 6 and the rest of the league for passing such favourable rules and getting the entire country ti believe they are intended to protect clubs. 

[Guest reefatoon]

Wow, when did football become so boring. 

[GeordieT]

19 minutes ago, r0cafella said:

Thanks for sharing!

No worries, it’s a big read so let me know if there’s anything of particular interest.

[r0cafella]

1 minute ago, GeordieT said:

No worries, it’s a big read so let me know if there’s anything of particular interest.

As you’re paying for it I don’t want to take the piss and be a freeloader. But anything you share is greatly appreciated. 

[Ben]

1 hour ago, reefatoon said:

Wow, when did football become so boring. 

TBF it's turning really boring, we should be attracting the world's best players to the league not renting players off each other to try and meet ridiculous rules that only benefit 6 teams 

[geordiekris]

I believe if uefa could bring it in so at least the top 5 leagues had a set budget of what they could spend on transfers and wages that would be fairest way. It could help even out the standards between the leagues also if done properly. 
 

Just a set amount so none of this cloak and daggers of working out how close to the limit a team is like the current FFP model.  

[Rich]

1 hour ago, reefatoon said:

Wow, when did football become so boring. 

 

I can't take any more injury or FFP related content like, feel like I've drowned in it for months now.

[WilliamPS]

If those numbers are right it does explain a lot. This season the club need a FFP profit, so the ASM sale, delaying the Hall fee and the inability to spend now make sense.

 

i assume the plan is to use the CL money to swing it into profit into 22/23. If they’d got out of the CL group stage that might have given a bit more room for a transfer.

 

The good news is while this year it’s the 20-21 profit falling off, next summer it will be the 21-22 73m loss falling off. Therefore there will be opportunities to spend after June - basically can lose another 73m and stay in the bounds 

 

Key thing now for FFP is to get into Europe to maintain revenue 

[Ben]

2 hours ago, WilliamPS said:

If those numbers are right it does explain a lot. This season the club need a FFP profit, so the ASM sale, delaying the Hall fee and the inability to spend now make sense.

 

i assume the plan is to use the CL money to swing it into profit into 22/23. If they’d got out of the CL group stage that might have given a bit more room for a transfer.

 

The good news is while this year it’s the 20-21 profit falling off, next summer it will be the 21-22 73m loss falling off. Therefore there will be opportunities to spend after June - basically can lose another 73m and stay in the bounds 

 

Key thing now for FFP is to get into Europe to maintain revenue 

Halls £30 million and Lascelles replacement will take up all and more of that 

[Ghandis Flip-Flop]

19 minutes ago, Ben said:

Halls £30 million and Lascelles replacement will take up all and more of that 

If their fees weren’t amortised across the total duration of their contracts yes. But Hall will be £6M a year for FFP calculations

[GeordieT]

On the need for player sales:

 

”One area where Newcastle have plenty of room for improvement is player trading, considering that they have only made around £11m profit from player sales in the last three years.

 

It will be a bit better this season following the sales of Allan Saint-Maximin to Al-Ahli for £23m and Chris Wood to Nottingham Forest for £15m, but it’s still a lot less than their rivals.

 

To illustrate how poor Newcastle have been in this area, they had the third smallest profits from player sales in the Premier League in the five years up to 2022 with just £62m.

 

In stark contrast, Chelsea generated nearly half a billion pounds (£467m) from player trading in this period, while five other clubs made more than £200m“

 

[Jackie Broon]

7 minutes ago, GeordieT said:

On the need for player sales:

 

”One area where Newcastle have plenty of room for improvement is player trading, considering that they have only made around £11m profit from player sales in the last three years.

 

It will be a bit better this season following the sales of Allan Saint-Maximin to Al-Ahli for £23m and Chris Wood to Nottingham Forest for £15m, but it’s still a lot less than their rivals.

 

To illustrate how poor Newcastle have been in this area, they had the third smallest profits from player sales in the Premier League in the five years up to 2022 with just £62m.

 

In stark contrast, Chelsea generated nearly half a billion pounds (£467m) from player trading in this period, while five other clubs made more than £200m“

 

 

I think that table is a bit misleading being labelled 'profit', that table is just income from player sales, not taking into account expenditure. Chelsea had a £238m loss on income minus expenditure.

 

 

[GeordieT]

26 minutes ago, Jackie Broon said:

 

I think that table is a bit misleading being labelled 'profit', that table is just income from player sales, not taking into account expenditure. Chelsea had a £238m loss on income minus expenditure.

 

 

It is profit on player sales and the tables only up to Chelsea’s annual financial results for the year ended 30 June 2022 - of which they made £123m alone in that season. So will jump again. It’s not net spend as you say, because as I understand it’s less relevant in FFP given the amortisation period.

 

As demonstrated here.

 

 

 

 

 

Edited January 15 by GeordieT

[GeordieT]

And this shows just how stacked the deck is. Estimate that our CL participation has earned around €34m in TV money with the coefficient model largely to blame.

 

Benefits the traditional elite, while clubs that have only recently qualified are effectively penalised.

And this brought a wry smile. PIF’s £27m outlay in the last two years is nearly four times as much as Ashley spent in preceding 12 years.

 

 

Should say you can sign-up to him on substack for a month and cancel. But there’s excellent analysis across the board and worth a few quid.

 

[Jackie Broon]

58 minutes ago, GeordieT said:

It is profit on player sales and the tables only up to Chelsea’s annual financial results for the year ended 30 June 2022 - of which they made £123m alone in that season. So will jump again. It’s not net spend as you say, because as I understand it’s less relevant in FFP given the amortisation period.

 

As demonstrated here.

 

 

 

 

 

 

 

Net spend will still be relevant in the long run, selling players to buy should only really result in a short term boost. It's useful for us because our revenue should continue to increase dramatically, and it pushes most of the cost further into the future when we will have a lot more revenue. Not so useful for the likes of Chelsea, who won't have that type of revenue growth.

 

Where Chelsea do very well though is in profit from selling players that have come through the academy, and that is probably one of the best ways to legitimately boost profit for FFP, but would take us a long time to build that type of academy set-up. 

 

 

[TheBrownBottle]

5 hours ago, Ghandis Flip-Flop said:

If their fees weren’t amortised across the total duration of their contracts yes. But Hall will be £6M a year for FFP calculations

It all adds up though.  C.£450m worth of transfer fees being amortised over five years (even without counting the Ashley years) and rising.  That’s at least £90m in transfer fees which will be amortised for 24/25 before Hall signs permanently.  You run out of room eventually.

[McDog]

3 minutes ago, TheBrownBottle said:

It all adds up though.  C.£450m worth of transfer fees being amortised over five years (even without counting the Ashley years) and rising.  That’s at least £90m in transfer fees which will be amortised for 24/25 before Hall signs permanently.  You run out of room eventually.

 

I think so. That's why why you need to sign up more sponsors. Official rodent exterminator, Stadium naming rights, Official snack partner. Wheelie bin provider. If the team can't sell players for any sort of profit then you have one alternative.

[Ghandis Flip-Flop]

1 hour ago, TheBrownBottle said:

It all adds up though.  C.£450m worth of transfer fees being amortised over five years (even without counting the Ashley years) and rising.  That’s at least £90m in transfer fees which will be amortised for 24/25 before Hall signs permanently.  You run out of room eventually.

Yes but that assumes you don’t sell anyone and that our revenue stalls. People talk about a lot of easy PSR wins, such as training ground sponsor, stadium naming rights etc. these will be phased in over time to allow the revenue to continue to grow organically. Rather than shooting our wad all in one go so to speak. The honest reality is going to be more expensive tickets etc too, especially for folks coming to the end of the Ashley price freeze.

 

Additionally, actually continuing to progress in cup competitions means increased revenue from additional games. Taking ownership of retail and refreshments in the stadium, rather than the undervalued contracted out situations we had before and the fan zone; will all see our revenue start to creep up.

[TheBrownBottle]

15 minutes ago, Ghandis Flip-Flop said:

Yes but that assumes you don’t sell anyone and that our revenue stalls. People talk about a lot of easy PSR wins, such as training ground sponsor, stadium naming rights etc. these will be phased in over time to allow the revenue to continue to grow organically. Rather than shooting our wad all in one go so to speak. The honest reality is going to be more expensive tickets etc too, especially for folks coming to the end of the Ashley price freeze.

 

Additionally, actually continuing to progress in cup competitions means increased revenue from additional games. Taking ownership of retail and refreshments in the stadium, rather than the undervalued contracted out situations we had before and the fan zone; will all see our revenue start to creep up.

You’re 100% right - as long as revenue continues to grow, then the threat of having to sell players etc reduces.

 

The problem would be if the current season continues on its path then it impacts this year and next season too.  Hopefully we can turn it round and grab a Euro spot - any competition is worth tens of millions next season. 

[timeEd32]

16 hours ago, GeordieT said:

I’m a subscriber so will post a few choice excerpts later today, it’s an illuminating read as usual.

 

On FFP, his suggestion is this season might have been closer than anyone else previously had imagined:

 

 

“PIF inherited a pretty solid FFP position from Ashley, as the former owner’s tightfisted approach to spending meant that they had a fair amount of wriggle room.

 

In fact, I estimate that they were £109m better than the £105m maximum allowed loss over the three-year monitoring period up to 2021/22 (including the single period average of the COVID-impacted 2019/20 and 2020/21 seasons).

 

However, the FFP monitoring period is a moving target, so the 2022/23 calculation dropped the £41m 2018/19 profit, replacing it with last season’s £73m loss, i.e. a negative swing of £114m.

 

After making deductions for “healthy” expenditure (infrastructure, academy, community and women’s football) and COVID losses, I reckon that Newcastle were still just about within target, but it must have been mighty close”.

 

I think Kieran is great, but I just can't accept this. Sure, Premier League broadcasting income + minimal spending looks good on paper at first. But it's not actually a good position when you haven't grown revenue in a decade and have very few assets to sell, unless you continue to have no interest in competing.

[Dr Jinx]

If a club can afford to put in whatever they want and not be in debt to anyone who can bring about insolvency proceedings, they should be allowed to.

 

It’s so disingenuous to parade FFP as the measure to protect smaller clubs.

 

It should be clear on a clubs balance sheet what they owe and that’s all that should be factored in. Chelsea have proven that an open chequebook is no recipe for success so there’s nothing to suggest that a club with the ability to spend what they want will really hurt the elite clubs anyway. Man Utd have spent a boatload too and same result.

 

If the premier league could truly boast the best players in the world, the tv revenue would surge and help out every other club down the food chain.

[TheBrownBottle]

18 minutes ago, Dr Jinx said:

 

If the premier league could truly boast the best players in the world, the tv revenue would surge and help out every other club down the food chain.

It might have without the PL breakaway.  But the PL broke away so that the benefits would not be shared with the lower leagues, which now reap the ‘rewards’ of football inflation with very little increase in revenue.  
 

PL greed has done enough damage to English football’s pyramid for me.  A form of FFP is a good and sensible thing, the current set up needs adjustment.  

 

NB tbf I don’t give two shites about the PL being the ‘world’s best league’ or owt, so this should qualify what I’ve said.  If others do, that’s up to them.  It has no relevance to NUFC nor to the health of English football generally. 

[JonBez comesock]

Sorry if I have missed it 

 

With the FFP rules changing in August 

 

Is the uefa option better or worse for us ?