Sven Botman: targeting January return (Howe)

[TheBrownBottle]

21 minutes ago, Happinesstan said:

Yeah. So if we sign somebody on a 3 year contract the full value will impact on FFP, within the three years, but a 5 year contract gives us a bit more wiggle room. Would that be right?

Yep - if we buy a 100m player on a five year contract, the transfer fee impact would only be 60m during any FFP three year period (20m per season)

[TheBrownBottle]

1 minute ago, Rich said:

It's not just us with this shite, thankfully, and it's actually better here than the other places I've scoped out this week.

 

Plenty of West Ham fans are going fucking mental over Aguerd, because it's taken "six weeks" from when it was first mooted (I don't think our supposed attempt at a hijack helped things, mind), and a load of Man Utd fans are the same about anybody that goes anywhere else that they think they should've been in for.

 

It's a people thing, not a NUFC thing, though I appreciate it still makes for difficult reading.

 

I reckon he'll be here for his medical within the next 10 days, it has to come to a head sooner or later and there's no way Milan will pay what Lille want.

It would be nice, not sure I share your confidence, but fingers crossed.  It does appear that AC are waiting for the player to effectively force the move to them rather than paying the asking price - though this is entirely inferred from back page tittle tattle, so fuck knows if that’s actually the case.

 

I’ve never liked big clubs doing that - deliberately unsettling a player to get them cheaper than they should.  They’ve got away with it for decades, of course.

[Keegans Export]

32 minutes ago, Happinesstan said:

Yeah. So if we sign somebody on a 3 year contract the full value will impact on FFP, within the three years, but a 5 year contract gives us a bit more wiggle room. Would that be right?

That is right, but it also extends the impact of the transfer. So the example @TheBrownBottlegave above is right - £100m/5 years = £20m per year but it means you're reducing your FFP room by £20m each year for five years. If you did the contract over three years, you'd be free from that two years earlier, although you'd have "paid" an extra £13m in each of those three years vs. the 5-year deal. The other advantage to a shorter term contract is that if you end up selling the player, you could sell for less without it classing as a loss towards the FFP.

 

So if your £100m player sells for £80m after one season, in the 5-year option his book value is £80m so you've broken even, in the 3-year option his book value is £66.7m so you've "made" £13.3m. Obviously it's a trade-off again because you could probably get more money for a player with four years on his contract vs two years.

 

There's also something clever you can do by constantly extending the contract by a year or two. There was a post on here using KDB/Man City as an example but I've no idea where it was.

 

We really need a "FFP questions and discussion" thread, I'm way off topic here 

[Happinesstan]

9 minutes ago, Keegans Export said:

That is right, but it also extends the impact of the transfer. So the example @TheBrownBottlegave above is right - £100m/5 years = £20m per year but it means you're reducing your FFP room by £20m each year for five years. If you did the contract over three years, you'd be free from that two years earlier, although you'd have "paid" an extra £13m in each of those three years vs. the 5-year deal. The other advantage to a shorter term contract is that if you end up selling the player, you could sell for less without it classing as a loss towards the FFP.

 

So if your £100m player sells for £80m after one season, in the 5-year option his book value is £80m so you've broken even, in the 3-year option his book value is £66.7m so you've "made" £13.3m. Obviously it's a trade-off again because you could probably get more money for a player with four years on his contract vs two years.

 

There's also something clever you can do by constantly extending the contract by a year or two. There was a post on here using KDB/Man City as an example but I've no idea where it was.

 

We really need a "FFP questions and discussion" thread, I'm way off topic here 

Selling players for less doesn't sound like a sound business model. Fuck FFP.

[Colos Short and Curlies]

9 minutes ago, Keegans Export said:

That is right, but it also extends the impact of the transfer. So the example @TheBrownBottlegave above is right - £100m/5 years = £20m per year but it means you're reducing your FFP room by £20m each year for five years. If you did the contract over three years, you'd be free from that two years earlier, although you'd have "paid" an extra £13m in each of those three years vs. the 5-year deal. The other advantage to a shorter term contract is that if you end up selling the player, you could sell for less without it classing as a loss towards the FFP.

 

So if your £100m player sells for £80m after one season, in the 5-year option his book value is £80m so you've broken even, in the 3-year option his book value is £66.7m so you've "made" £13.3m. Obviously it's a trade-off again because you could probably get more money for a player with four years on his contract vs two years.

 

There's also something clever you can do by constantly extending the contract by a year or two. There was a post on here using KDB/Man City as an example but I've no idea where it was.

 

We really need a "FFP questions and discussion" thread, I'm way off topic here 

I don’t see what you can do with extending contracts, amortisation rules are on the initial contract length

[STM]

Puts all the "why isn't it done yet?", stuff into perspective, when you see all the financial complications.

[Happinesstan]

Just now, Colos Short and Curlies said:

I don’t see what you can do with extending contracts, amortisation rules are on the initial contract length

I don't either but I don;t doubt there is a loophole. The original contract is included in the impact on FFP, right? So a £100 mill player on a 5 year £20mill per year contract would be £40 mill per year, in reality, right? You could offer a yearly increase in the original contract, which I assume would be applied to FFP, but if you renew the contract each year, it moves the goalposts a little.

Maybe?

[TheBrownBottle]

11 minutes ago, Happinesstan said:

I don't either but I don;t doubt there is a loophole. The original contract is included in the impact on FFP, right? So a £100 mill player on a 5 year £20mill per year contract would be £40 mill per year, in reality, right? You could offer a yearly increase in the original contract, which I assume would be applied to FFP, but if you renew the contract each year, it moves the goalposts a little.

Maybe?

Contract extensions affect the amortisation - you can reduce FFP this way.  Quick example:

 

you sign a player for 100m on a five year deal.  So that’s 20m per year for FFP

 

After three years, you give the player a player a two year extension.  The sunk amortisation fee is deducted from the transfer fee at registration, and the remainder is split over the length of the new (extended) contract.  So:

 

100m (fee) - 3 x 20m (three years amortisation) = 40m

 

40m / 4 (four years for new extended contract) = 10m per season amortised for FFP

 

edit: you can ‘pay off’ the fee by sticking the remainder in your FFP books so that you don’t keep splitting the original fee - if you don’t want to that is.  This is an ‘impairment charge’ in accounting terminology

 

 

Edited June 18, 2022 by TheBrownBottle

[jonny1403]

54 minutes ago, Broadsword said:

You are incorrect on this, the total fee inc and probable extras gets split over the contract term.  Adding a loan period upfront would delay the start of  the contract term however.

100%. Will teach me not to spout off about things I’m not sure I haven’t got the wrong end of the stick about.

 

Apologies to the poster I quoted for being so confident I wasn’t talking out of my arse 

[LV]

1 hour ago, Rich said:

It's not just us with this shite, thankfully, and it's actually better here than the other places I've scoped out this week.

 

Plenty of West Ham fans are going fucking mental over Aguerd, because it's taken "six weeks" from when it was first mooted (I don't think our supposed attempt at a hijack helped things, mind), and a load of Man Utd fans are the same about anybody that goes anywhere else that they think they should've been in for.

 

It's a people thing, not a NUFC thing, though I appreciate it still makes for difficult reading.

 

I reckon he'll be here for his medical within the next 10 days, it has to come to a head sooner or later and there's no way Milan will pay what Lille want.

Yeah it’s totally a people thing and not just confined to our support for sure.

 

People need to stop being swept up with every article written by the myriad journalists, itks and wannabe’s out there. Most of them are making it up based on guesswork and hearsay. Folk hanging on their every likely-bullshit word as if it’s fact are gonna get tossed about thinking their in some kind of storm, or saga.

 

When there is no storm or saga in the first place, there is only lack of any real information. Just step back and let it happen. Or not happen. 
 

And stop whinging! 

[Reblancks]

Much talk about nothing. 

Italian newspapers writes that Botman wants to go to Milan for an interview on ESPN 

Link: https://www.espn.nl/voetbal/artikel/_/id/10477823/wentges-maakt-zich-op-voor-debuut-bij-jong-oranje 

Go to 2:40 onwards and I assure you that you don't need to know Dutch to understand.

Does Botman want to go to Milan? it is reality. Just as it is real that Newcastle offers more money to Lille and to the player.

The turning point will be when and if Maldini renews his contract with Milan as manager, all other newspaper articles are fine for garbage or lighting a fire.

 

[The Prophet]

There seems to be a lot of wasted column inches on what Botman prefers, in both England and Italy.

 

Botman may well prefer Milan and I don't think many of us would blame him, they're one of the most prestigious clubs in Europe, who are guaranteed CL football next season. There are two things to say about that though.

 

First a preference is just that. If I'm offered roles at two perspective companies, I may prefer one to the other, but if they're both offering me a significantly better contract and a more competitive working environment, I'm not turning either of them down, regardless of my preference.

 

Secondly all of the above is totally irrelevant, unless us or Milan agree a fee with Lille. Botman doesn't have a choice to make until we progress to that stage and neither us or Milan have yet.

[Happinesstan]

My only concern, and I assume it is relevant to every transfer, is that he might begin to wonder "What might have been" if the chips are down. When you're the least glamorous choice I think you run that risk a little bit more.

I have no worries though if he signs as I am confident we know what we are doing.

[Theregulars]

It’s coming across that everyone is so hacked off with the ludicrous state of the country / wider world that Newcastle last season provided an unexpected source of joy and hope. Now it’s the off-season, we’re getting tetchy that we don’t get the instant hit, because we’ve almost had to become very quickly dependent on it as a rare source of good. I echo what other posters have said: they will buy good players, whatever happens.

[Gawalls]

You know this teenager has dragged on when the thread has covered…

 

1. Botman transfer updates

2. Sportswashing - how is it defined

3. Scottish independence 

4. ffp and it’s loopholes 

5. Italian football and milan

 

 and we’re not finished yet, stay tuned to see what’s next in the agenda.

[Gawalls]

8 minutes ago, Theregulars said:

It’s coming across that everyone is so hacked off with the ludicrous state of the country / wider world that Newcastle last season provided an unexpected source of joy and hope. Now it’s the off-season, we’re getting tetchy that we don’t get the instant hit, because we’ve almost had to become very quickly dependent on it as a rare source of good. I echo what other posters have said: they will buy good players, whatever happens.

That’s what I think as well, take your time and buy properly - don’t do an Everton and fill yourself up with crap.

[Happinesstan]

16 minutes ago, Theregulars said:

It’s coming across that everyone is so hacked off with the ludicrous state of the country / wider world that Newcastle last season provided an unexpected source of joy and hope. Now it’s the off-season, we’re getting tetchy that we don’t get the instant hit, because we’ve almost had to become very quickly dependent on it as a rare source of good. I echo what other posters have said: they will buy good players, whatever happens.

Yeah. I think people are [understandably] just worried that they won't survive the cost of living crisis long enough to see our first new signing.

[The Prophet]

4 minutes ago, Happinesstan said:

Yeah. I think people are [understandably] just worried that they won't survive the cost of living crisis long enough to see our first new signing.

 

Not a believer in escapism then?

[Happinesstan]

Just now, The Prophet said:

 

Not a believer in escapism then?

I like to escape to reality, every now and then.

[Abacus]

3 hours ago, Keegans Export said:

That's exactly what it is, but from a FFP perspective it ties in with your first point. 

 

If we bring in a player on a loan + obligation to buy deal this summer who we think will help propel us up to 7th/8th, you would be pushing the fee one year down the line where you would expect your commercial income (and prize money) to be higher as a result of performing better in the league. So the transfer fee is still the same amount, but you're pushing it into a year where you expect your income to go up too and therefore the impact on FFP is reduced because your income has gone up by the time you start adding the transfer fee to the FFP calculation.

 

I think I've done a terrible job of explaining that.

Thanks - I followed that just fine! I suppose my question wasn't about the benefits of a loan with obligation to buy, and more how it could be allowed.

 

It can't really be an obligation to buy at the end of the loan spell. There has to at least be some performance related clause which allows the buyer to back out, but which gets triggered during the loan spell - such as number of games played. In that case, fine, I get it. Though I'm less sure I get what the selling side gets from that.

 

Because if there isn't, and if you really are obliged to buy him at the end of the loan spell no matter what, then the moment you sign that 'loan' deal, you're also entering into a non cancellable contract to buy the player at a fixed price. You have effectively signed him at that point no matter how you try and describe it.

 

Surely any auditor worth their salt would see through to the substance of that transaction, and force you to record that properly on your books as a purchase right from the off. If so, there's no advantage to it from a FFP point of view.

 

Apologies, by the way to anyone bored by the contract / FFP chat or who want to hear about Botman. I think it's vaguely relevant while it's quiet on that front, if this is the way we're going to have to conduct deals like this.

 

Also to highlight the advantages FFP seals in place for bigger clubs already at the top who can just buy up front with fewer FFP complications - which might well be more attractive to a selling club to accept.

 

[Wolfcastle]

37 minutes ago, Gawalls said:

You know this teenager has dragged on when the thread has covered…

 

1. Botman transfer updates

2. Sportswashing - how is it defined

3. Scottish independence 

4. ffp and it’s loopholes 

5. Italian football and milan

 

 and we’re not finished yet, stay tuned to see what’s next in the agenda.

Were not even at the console era bad pun stage yet like the Ekitike one.

I can't wait for that to Kick Off 2

[Keegans Export]

18 minutes ago, Abacus said:

Thanks - I followed that just fine! I suppose my question wasn't about the benefits of a loan with obligation to buy, and more how it could be allowed.

 

It can't really be an obligation to buy at the end of the loan spell. There has to at least be some performance related clause which allows the buyer to back out, but which gets triggered during the loan spell - such as number of games played. In that case, fine, I get it. Though I'm less sure I get what the selling side gets from that.

 

Because if there isn't, and if you really are obliged to buy him at the end of the loan spell no matter what, then the moment you sign that 'loan' deal, you're also entering into a non cancellable contract to buy the player at a fixed price. You have effectively signed him at that point no matter how you try and describe it.

 

Surely any auditor worth their salt would see through to the substance of that transaction, and force you to record that properly on your books as a purchase right from the off. If so, there's no advantage to it from a FFP point of view.

 

Apologies, by the way to anyone bored by the contract / FFP chat or who want to hear about Botman. I think it's vaguely relevant while it's quiet on that front, if this is the way we're going to have to conduct deals like this.

 

Also to highlight the advantages FFP seals in place for bigger clubs already at the top who can just buy up front with fewer FFP complications - which might well be more attractive to a selling club to accept.

 

Oh right, I understand. 

 

Yeah, it's just terminology really - the obligation to buy will kick in depending on certain criteria being met (playing time presumably but I guess it could be anything). If there aren't any criteria then yeah, it's basically a transfer of an asset and would have to be included on that years' accounts.

[Colos Short and Curlies]

19 minutes ago, Keegans Export said:

Oh right, I understand. 

 

Yeah, it's just terminology really - the obligation to buy will kick in depending on certain criteria being met (playing time presumably but I guess it could be anything). If there aren't any criteria then yeah, it's basically a transfer of an asset and would have to be included on that years' accounts.

it’s not, they are 2 different transactions.

 

the loan is an operating expense in the year. The obligation to buy at most would be a provision with an equal asset on the book, but overall probably ignored on grounds of materiality as there is no profit impact.

 

im surprised (or maybe not) that FFP hasn’t added a clause to deal with them but accounting wise it’s pretty clean to deal with

 

edit actually it would probably be a future obligation disclosure rather than a provision, so just a note to say it will happen rather than recognising it

 

 

Edited June 18, 2022 by Colos Short and Curlies

[Ghandis Flip-Flop]

38 minutes ago, Wolfcastle said:

Were not even at the console era bad pun stage yet like the Ekitike one.

I can't wait for that to Kick Off 2

The majority of people prefer to remain Sensible ?

[Nucasol]

10 minutes ago, Ghandis Flip-Flop said:

The majority of people prefer to remain Sensible ?

Any more of this nonsense and I’ll launch into full-on Primal Rage.