Financial Fair Play / Profit & Sustainability

[Groundhog63]

1 minute ago, TheBrownBottle said:

By way of example, here’s the income figures for last season:

 

Man Utd: £662m

Spurs: £528m

NUFC: £320m

 

Our income last season was closer to your local pub team than to Man Utd’s.  Man Utd’s wage bill was higher than our turnover - they’ll be back, because ultimately money talks 

I know it's a daft question but I'll ask it anyway and do so not to curry favour with the likes of @Froggy

BUT how much of those two club's turnover is

A) profit and, more importantly

B) squirreled away by the owners/shareholders

[TheBrownBottle]

3 minutes ago, Groundhog63 said:

I know it's a daft question but I'll ask it anyway and do so not to curry favour with the likes of @Froggy

BUT how much of those two club's turnover is

A) profit and, more importantly

B) squirreled away by the owners/shareholders

About £60m per year goes to pay for the Glazer’s leveraged buyout 

 

Spurs lost about £30m and Man Utd about £110m post-tax.  Spurs’ loss is pretty normal for a PL club. 

[tarie4]

3 hours ago, TheBrownBottle said:

Unlikely, given that they would still have an income which outstripped 95% of the top division

 

Looking at Man Utd and Spurs’ current position and thinking that this is anything other than a blip is wishful thinking.  They’ll both be back amongst it, maybe even as early as next season (Man Utd are the bigger basket case of the two, so do need more work).  FFP builds in the advantages to these clubs, so they could have multiple years like this one and still outspend the likes of us or Villa

That's wrong, some of those clubs' income depends on European football. Missing two CL seasons would really hurt them.

 

But the main thing you're overlooking is the difference between FFP wiggle room and actual cash. Spurs and Man U are losing money. Forget FFP for a sec – they're in the red, huge debts. Spurs are finding this out now. You can have FFP headroom, but you also need owners willing to keep funding it because the club itself isn't making money. It's losing money.

 

 

So yeah, if the Glazers/Sir Jim or the Lewis trust/Levy are willing to keep funding them for years, fine, but I seriously doubt that. Multiple seasons without CL would be a disaster for either team.

 

If Chelsea miss the Champions League this season and next season, it'll really hurt them (include spurs and man u). Because while they're struggling, we and Villa are just getting stronger. 

[r0cafella]

Chelsea have gamed the system so well. They actually have a lot of ffp headroom and clear lake show signs of stopping. Given they are an investment fund I'd love to know how the plan on making actually money out of this. 

[tarie4]

18 minutes ago, r0cafella said:

Chelsea have gamed the system so well. They actually have a lot of ffp headroom and clear lake show signs of stopping. Given they are an investment fund I'd love to know how the plan on making actually money out of this. 

So being a fund and all, the plan's to boost the team's worth, simples.  New stadium, better facilities etc, a young hotshot team to rake in cash for years through player trading and sponsorship etc, then sell the club for a profit. Classic American investor model. 

 

The Glazers' primary motivation for acquiring Manchester United was likely financial gain. Their subsequent success in this endeavor is evident. copy and paste that to Clearlake

 

 

Edited 7 hours ago by tarie4

[r0cafella]

1 minute ago, tarie4 said:

So being a fund and all, the plan's to boost the team's worth, simples.  New stadium, better facilities etc, a young hotshot team to rake in cash for years through player trading and sponsorship etc, then sell the club for a profit. Classic American investor model. 

Yeah I get all of that, the issue is the amount they've spent already and the amount they will spend in the future. I don't see how they make money in the long run especially considering the opportunity cost. 

[tarie4]

2 minutes ago, r0cafella said:

Yeah I get all of that, the issue is the amount they've spent already and the amount they will spend in the future. I don't see how they make money in the long run especially considering the opportunity cost. 

They're billionaires, so obviously they've got better vision than me. I'm sure they know what they're doing. Will it help Chelsea? Maybe not. But I bet they'll make a ton of money off it.

[TheBrownBottle]

1 hour ago, tarie4 said:

That's wrong, some of those clubs' income depends on European football. Missing two CL seasons would really hurt them.

 

But the main thing you're overlooking is the difference between FFP wiggle room and actual cash. Spurs and Man U are losing money. Forget FFP for a sec – they're in the red, huge debts. Spurs are finding this out now. You can have FFP headroom, but you also need owners willing to keep funding it because the club itself isn't making money. It's losing money.

 

 

So yeah, if the Glazers/Sir Jim or the Lewis trust/Levy are willing to keep funding them for years, fine, but I seriously doubt that. Multiple seasons without CL would be a disaster for either team.

 

If Chelsea miss the Champions League this season and next season, it'll really hurt them (include spurs and man u). Because while they're struggling, we and Villa are just getting stronger. 

Spurs' income was over 200m more than ours when we had CL football and they didn't.  The gulf is absolutely massive - and yes, they're losing money, in Spurs' case in part due to stadium costs.

 

Man Utd are going absolutely nowhere when it comes to income - I think some are genuinely deluded if they think that Man Utd are going to suffer significant financial harm in the long run.  They're a monster of a club, they have huge global reach - they'll be England's biggest club in 50 years time, never mind right now.  Man Utd and Spurs are absolutely not dependent on European football - they aren't Leeds c.2002

[TheBrownBottle]

1 hour ago, r0cafella said:

Yeah I get all of that, the issue is the amount they've spent already and the amount they will spend in the future. I don't see how they make money in the long run especially considering the opportunity cost. 

The question would be 'where are the buyers?'.  We're already at the point of nation states buying clubs.  Who is going to pay 4bn for Chelsea?  The club that Abramovich sold was English football's most successful club of the century to date, but they aren't Man Utd.  4bn is the purchase cost + what Boehly and co. has poured in to date.  I'm just not seeing that happen - football clubs have tiny revenue streams (and profit potential) against their 'value'.  Football clubs are not good investments at all.

[Sibierski]

8 hours ago, midds said:

 

 

At some point something will happen to one of the 17 and they'll go down eventually but it's impossible to see any of the new teams to finish above any of the current 17. Even Wolves, Palace and Everton look way, way stronger than anything coming up. 17 + 3 guests. Marvellous 

Consistently stays like that for a bit, every chance the 18 Prem league may get voted through (with two down), because more sides will fancy their chances of never going down due to gulf in finances, and 18 sides means more wealth for them as there’s 2 less sides to give money too.

[Sibierski]

2 hours ago, TheBrownBottle said:

Spurs' income was over 200m more than ours when we had CL football and they didn't.  The gulf is absolutely massive - and yes, they're losing money, in Spurs' case in part due to stadium costs.

 

Man Utd are going absolutely nowhere when it comes to income - I think some are genuinely deluded if they think that Man Utd are going to suffer significant financial harm in the long run.  They're a monster of a club, they have huge global reach - they'll be England's biggest club in 50 years time, never mind right now.  Man Utd and Spurs are absolutely not dependent on European football - they aren't Leeds c.2002

Don’t think anyone knows what the future financial landscape can end up as trends change. 
 

But say Man Utd don’t challenge Premier League in next 10 years, their finances may stay high, but everyone else will close in and overtake and theirs could be like 6th highest in Prem. 

 

Only way they mess up financially and do harm long term, is they have more seasons of wrong investment than have to take on a sizeable chunk of stadium debt. Ratcliffe won’t be there long term, and football clubs to be bought for say £3bn are not logical investments because of how much they cost to run to be competitive. So it’s then all the debt repayments needed to various people which if there’s an average billionaire in charge, would find very challenging. 

[macphisto]

3 hours ago, r0cafella said:

Yeah I get all of that, the issue is the amount they've spent already and the amount they will spend in the future. I don't see how they make money in the long run especially considering the opportunity cost. 

I could easily see clubs making a lot of money when broadcasting is brought in-house and they launch a Premier League "Netflix" for fans all over the world. Only issues there will be how you distribute the income and if the money will go straight through the clubs to players and agents. 

[Teasy]

7 hours ago, TheBrownBottle said:

By way of example, here’s the income figures for last season:

 

Man Utd: £662m

Spurs: £528m

NUFC: £320m

 

Our income last season was closer to your local pub team than to Man Utd’s.  Man Utd’s wage bill was higher than our turnover - they’ll be back, because ultimately money talks 

 

That local pub team will be challenging as well considering they're closer to us financially apparently, wonder how PSR effects them? 🤔

[TheBrownBottle]

4 minutes ago, Teasy said:

 

That local pub team will be challenging as well considering they're closer to us financially apparently, wonder how PSR effects them? 🤔

The point of course to illustrate just how vast the gulf is between the two clubs, not to be taken literally.  I think there will be those who’ll see Man Utd’s plight and think we’ve overtaken them - we haven’t, and they’ll be back at some point.  They’re too big not to. 

[TheBrownBottle]

15 minutes ago, Sibierski said:

Don’t think anyone knows what the future financial landscape can end up as trends change. 
 

But say Man Utd don’t challenge Premier League in next 10 years, their finances may stay high, but everyone else will close in and overtake and theirs could be like 6th highest in Prem. 

 

Only way they mess up financially and do harm long term, is they have more seasons of wrong investment than have to take on a sizeable chunk of stadium debt. Ratcliffe won’t be there long term, and football clubs to be bought for say £3bn are not logical investments because of how much they cost to run to be competitive. So it’s then all the debt repayments needed to various people which if there’s an average billionaire in charge, would find very challenging. 

Man Utd were still England’s biggest club when they went 27 years without a league title.  They’re one of those clubs where they’re effectively failure-proof.  
 

With or without FFP, Man Utd are not going to fall away in wealth terms.  And their wealth more or less guarantees they’ll be back - remember, they have to make the wrong calls constantly every season for many, many years to get to where you’re talking; at some point they’ll get lucky even if not by design due to the wealth and lure of the club

[TheBrownBottle]

28 minutes ago, Sibierski said:

Consistently stays like that for a bit, every chance the 18 Prem league may get voted through (with two down), because more sides will fancy their chances of never going down due to gulf in finances, and 18 sides means more wealth for them as there’s 2 less sides to give money too.

No chance they vote for it - the PL was established to reduce the top division to 18 clubs 33 years ago; they didn’t do it then due to money, and it’s even less likely it happens now.  There are 17 clubs who have to seriously cock up to go down; why would they vote to guarantee at least one of them going down?

[Ghandis Flip-Flop]

3 minutes ago, TheBrownBottle said:

The point of course to illustrate just how vast the gulf is between the two clubs, not to be taken literally.  I think there will be those who’ll see Man Utd’s plight and think we’ve overtaken them - we haven’t, and they’ll be back at some point.  They’re too big not to. 

That’s on the proviso they start buying well and are ever ran properly again. I’m sure these exact arguments have been made for that past decade and if anything they've continued to regress.

 

its all very well saying they have more money, but they still have to invest it effectively. Their recent actions don’t suggest that is something they’re about to suddenly achieve.

[Pixelphish]

8 hours ago, TheBrownBottle said:

By way of example, here’s the income figures for last season:

 

Man Utd: £662m

Spurs: £528m

NUFC: £320m

 

Our income last season was closer to your local pub team than to Man Utd’s.  Man Utd’s wage bill was higher than our turnover - they’ll be back, because ultimately money talks 

 

Absolutely sickening.

[tarie4]

2 hours ago, TheBrownBottle said:

Spurs' income was over 200m more than ours when we had CL football and they didn't.  The gulf is absolutely massive - and yes, they're losing money, in Spurs' case in part due to stadium costs.

 

Man Utd are going absolutely nowhere when it comes to income - I think some are genuinely deluded if they think that Man Utd are going to suffer significant financial harm in the long run.  They're a monster of a club, they have huge global reach - they'll be England's biggest club in 50 years time, never mind right now.  Man Utd and Spurs are absolutely not dependent on European football - they aren't Leeds c.2002

You're missing the point, mate. Nobody said Man U's revenue will drop. I'm saying constantly missing the Champions League will hurt them because other clubs will catch up, making it tougher to grab one of the 4 or 5 CL spots, maybe even 8 or 9 teams competing.

 

Their massive debts mean they'll need cash injections, and the owners might not be keen on that.

 

It's totally wrong to say Spurs and Man U don't need European football. If they miss out, other teams will get richer and closer, forcing them to spend even more – they can't keep that up.

Plus top players want to play CL how do you convince players with no CL. 

[Sibierski]

43 minutes ago, TheBrownBottle said:

Man Utd were still England’s biggest club when they went 27 years without a league title.  They’re one of those clubs where they’re effectively failure-proof.  
 

With or without FFP, Man Utd are not going to fall away in wealth terms.  And their wealth more or less guarantees they’ll be back - remember, they have to make the wrong calls constantly every season for many, many years to get to where you’re talking; at some point they’ll get lucky even if not by design due to the wealth and lure of the club

But the football landscape is miles apart to the 80s, where domestic attendances were one of the primary driving factors and exposure to other clubs.

 

Just so different now, with many competing clubs and other destination venues / things to do. They won’t ever fall away to levels of being relegated, unless TV deal blew up where every club would be fucked, but falling to like 6th largest is feasible because of how football is now days. 
 

One thing that’s helped Man Utd, because of their current wealthy over others, they’ve been able to consistently qualify for Europe, spend beyond levels they should be, and keep picking up odd trophy. Means the sponsors etc still happy to be associated for big value as they’re regularly in the main comps and ‘successful’. 

[Sibierski]

Probably can’t be underestimated how just falling to like 3rd or 4th behind Man City / Liverpool / Arsenal would hurt Ratcliffe. They’ve likely been brought with future target of being number 1 leading club, not 3rd or 4th. 

[tarie4]

 

2 hours ago, TheBrownBottle said:

The question would be 'where are the buyers?'.  We're already at the point of nation states buying clubs.  Who is going to pay 4bn for Chelsea?  The club that Abramovich sold was English football's most successful club of the century to date, but they aren't Man Utd.  4bn is the purchase cost + what Boehly and co. has poured in to date.  I'm just not seeing that happen - football clubs have tiny revenue streams (and profit potential) against their 'value'.  Football clubs are not good investments at all.

It's crazy when people say "I can't see that happening" about billionaires and football clubs, right? These guys are billionaires for a reason; they see things we don't. Especially a fund like Clearlake.

 

Nobody thought a club would be worth $100 million, let alone a billion, 50 years ago! Fenway bought Liverpool for $300 million – what's it worth now? Four or five billion in just 15 years! Maybe ten times that in the next 15. Don't be short-sighted; even Mike Ashley profited from Newcastle despite relegations.

 

These guys are billionaires for a reason

 

 

Edited 2 hours ago by tarie4

[Sibierski]

They’re billionaires mostly because they inherit wealth to have a head start, manipulate things, hostile takeovers, exploit the less well off etc. With a small bit of ‘business acumen’.

 

Why so many of them would love Premier League to have no relegation, because yes that would then see club values sky rocket. That’s not being business smart, that would be one of the other points. 

[The College Dropout]

Our biggest advantage we have over spurs and Man U is that our owners aren’t really in it for money. Same goes for any American owners. 
 

None of them want to max PSR headroom.

 

Yeh Liverpool have won the league but they managed to do so by bringing in a new manager and not backing him at all. 

[Boey_Jarton]

Man United's profit and loss account makes for interesting reading. 

 

Their healthy revenue somewhat mitigates their clusterfuck of decisions which have led to high wages/amortisation, bloated operating expenses and a need to service debt.