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Financial Fair Play / Profit & Sustainability


Mattoon

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Just now, Fezzle said:

It will include a month as they have sold a fuck load of gear the last three weeks so no chance we haven't started the deal this year. There's also said to be bonuses based on sales we might hit

Yeah true enough 

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35 minutes ago, NSG said:


21/22 had Bruno, Trippier, Wood etc.

 

Isak would have fallen into 22/23.

Botman was 21/22  as well I think.

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4 minutes ago, TheBrownBottle said:

Yeah true enough 

No idea what sort of markup we get from the club shop or that exclusive JD deal but got to think it's another £3m at least including the Adidas month. 

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19 minutes ago, TheBrownBottle said:

This season will not include the adidas deal


I was referring to it hitting from 24/25 onwards, sorry for not being clear 

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27 minutes ago, The College Dropout said:

Transfers are amortised over the length of the contract. So we are still paying for Bruno (amortisation reduced due to contract extension), Burn etc.   

 

What reduced amortisation is extending contracts.  So you need long serving players. And also academy grads because there’s no amortisation cost.  
 

We can’t do that.  So we need to increase revenues. 

Might be wrong but I think they set a limit of 5 years amortisation for a transfer. After Chelsea pulled the 8-year contracts trick

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44 minutes ago, RUHRLYASLEEVESUP said:

Is it too simplistic to cap spend as a %age of companies worth ? 
 

 

 

Would be easy for minted owners to find a way "around" this as well. Hypothetically, if £1bn is introduced to NUFC's bank account, the paper value of the club has just risen by £1bn (unless it is in the form of a loan of course.) Would actually be a great idea if the aim of the rules was to prevent owners spending beyond their means and then pulling the plug, but we all know that's not what these rules are there for.

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59 minutes ago, madras said:

Botman was 21/22  as well I think.

 

Pope £10m drops off, was bought June '22 so there's a few quid more. 

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49 minutes ago, geordiesteve710 said:

Might be wrong but I think they set a limit of 5 years amortisation for a transfer. After Chelsea pulled the 8-year contracts trick

Amortisation continues until the player is sold, released.  Chelsea were signing players and spreading the amortisation over 8 years from the start. Nah it’s limited to 5 from the start. 
 

But amortisation continues to spread over every new contract. Eg KDB still has an amortisation cost. It’s just very small now. The longer you keep a player and he renews contracts the less his book value. 

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Just now, Optimistic Nut said:

 

Pope £10m drops off, was bought June '22 so there's a few quid more. 

It doesn’t drop off. That’s not how it works. 
 

Nick Pope signed a 4 year deal in 22. He costs 2.5m per year until 2026 in FFP language. Unless he signs a contract extension and then the remaining amount is extended over that duration.  His £10m does not ‘drop off’. 

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Just now, Optimistic Nut said:

 

Pope £10m drops off, was bought June '22 so there's a few quid more. 

 

It doesn't work like that, for example Pope's fee will be amortised at £2m per year for 5 years beginning 21/22.

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What’s important that drops off is the  PSR limit is a max 105m loss over a 3 year period. That’s why the drop off of 21/22 is important - the club lost 70m that year, which meant 23/24 was highly constrained (the club also lost 70m in 22/23, meaning the club has to turn a 35m profit in 23/24, hence the sales)

 

24/25 will be easier as the club can run up another 70m loss and be within the spending limits.

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other than the 105m loss requirement, is there also a total spending cap as a % of revenue requirement that we need to comply with?

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Aye. But it seems our forecasted losses are already significant. We need to raise revenues to continue to invest seemingly. 

3 minutes ago, WilliamPS said:

What’s important that drops off is the  PSR limit is a max 105m loss over a 3 year period. That’s why the drop off of 21/22 is important - the club lost 70m that year, which meant 23/24 was highly constrained (the club also lost 70m in 22/23, meaning the club has to turn a 35m profit in 23/24, hence the sales)

 

24/25 will be easier as the club can run up another 70m loss and be within the spending limits.

 

3 minutes ago, WilliamPS said:

What’s important that drops off is the  PSR limit is a max 105m loss over a 3 year period. That’s why the drop off of 21/22 is important - the club lost 70m that year, which meant 23/24 was highly constrained (the club also lost 70m in 22/23, meaning the club has to turn a 35m profit in 23/24, hence the sales)

 

24/25 will be easier as the club can run up another 70m loss and be within the spending limits.

 

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3 minutes ago, The College Dropout said:

Aye. But it seems our forecasted losses are already significant. We need to raise revenues to continue to invest seemingly. 

 

 

It absolutely critical aye squad cost rules are going to kill us. 

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So is it likely true we were £60m or thereabouts short before these sales? Seems crazy that and now makes sense that they were trying to get takers for Gordon, Isak, Bruno potentially if we were that deep.

 

On one hand they have seemingly done well to sell two less established players for the amounts they needed, on the other, it feels a little like something must have gone seriously wrong in their forecasting of last season to be that far off. Even the most optimistic fan would probably have predicted a bit of a drop off last season compared to the one previous. So if they didn't plan for the worst case scenario to cover themselves then someone has messed up. 

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6 minutes ago, alexf said:

So is it likely true we were £60m or thereabouts short before these sales? Seems crazy that and now makes sense that they were trying to get takers for Gordon, Isak, Bruno potentially if we were that deep.

 

On one hand they have seemingly done well to sell two less established players for the amounts they needed, on the other, it feels a little like something must have gone seriously wrong in their forecasting of last season to be that far off. Even the most optimistic fan would probably have predicted a bit of a drop off last season compared to the one previous. So if they didn't plan for the worst case scenario to cover themselves then someone has messed up. 

Bruno transfer makes the most sense. And then selling Miggy and co as a plan B. We’ve had to go plan C but survived. 

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I think we can spend this summer now, but what seems clear, is if we don't over achieve and get maybe top 4 again or get some really good sponsorship deals to add in, we likely need to sell someone important next summer.

 

However, if we don't get Europe, we likely will have Bruno, Isak and even Gordon agitating for a move away anyways. 

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5 minutes ago, alexf said:

I think we can spend this summer now, but what seems clear, is if we don't over achieve and get maybe top 4 again or get some really good sponsorship deals to add in, we likely need to sell someone important next summer.

 

However, if we don't get Europe, we likely will have Bruno, Isak and even Gordon agitating for a move away anyways. 

 

Howe will be gone too imo... never happening, surely.

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39 minutes ago, The College Dropout said:

Amortisation continues until the player is sold, released.  Chelsea were signing players and spreading the amortisation over 8 years from the start. Nah it’s limited to 5 from the start. 
 

But amortisation continues to spread over every new contract. Eg KDB still has an amortisation cost. It’s just very small now. The longer you keep a player and he renews contracts the less his book value. 

From an accountancy perspective definitely, but I thought there were different rules on amortisation for the purposes of PSR.

 

They definitely did *something* after Chelsea handed out those 8 year contracts.

 

https://www.google.com/amp/s/www.skysports.com/amp/football/news/11661/13028764/premier-league-clubs-vote-for-five-year-maximum-player-contracts

 

Found this on a quick google. Doesn't give any detail on whether contract extensions impact the psr calculation. Would seem a little counter-intuitive to me that if the fee has been paid it's still impacting on the psr but a lot of psr seems daft to me.

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1 minute ago, The College Dropout said:

We need to increase revenues. 

This!!

 

And a coherent longterm strategy.

 

Otherwise there's a trap of spending big each July the panicking into sales the next June, rinse and repeat.

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