Financial Fair Play / Profit & Sustainability

[The College Dropout]

4 minutes ago, TheBrownBottle said:

Many of the rules were already in place - it wasn’t possible to ‘do a Man City’ when PIF bought the club.  The football press misled an excited fanbase tbh. 

Am I wrong in thinking they could’ve announced a £100m stadium sponsor day one of the takeover?

 

The APT rules came in 2 weeks after the takeover iirc. 

 

 

Edited Wednesday at 12:29 by The College Dropout

[r0cafella]

1 minute ago, The College Dropout said:

Am I wrong in thinking they could’ve announced a £100m stadium sponsor day one of the takeover?

 

The APT rules came in 2 weeks after the takeover iirc. 

 

 

 

Iirc as soon as the takeover went through they put a block on all sponsorship deals pending urgent review of the rules. 

[Chris_R]

1 hour ago, JT24 said:

Blimey, how did their revenue jump up to 616m?

 

Because, unlike us, they're allowed to grow their revenue.

[TheBrownBottle]

5 minutes ago, TRon said:

 

Why did the PL rush through amendments to their rules then?

 

 

To close any remaining gaps - but FMV already existed.  It was the APT rules which closed the remaining gaps.  It was never possible for PIF to come in and chuck huge sums of money about.  If they (or Staveley) thought that it was, then they were guilty of doing the same amount of due diligence as Mike Ashley did. 

[The College Dropout]

From our collective memory - if they had seen this coming and put in sponsorships day 1, things could’ve been different.  
 

 

I guess everyone was just so keen to get the sale over the line. 
 

In retrospect, how this has all panned out was obvious. 
 

I also think significant relaxation of the rules is inevitable. But the PL will try and kick it down the road for as long as possible.  May end up being years still.  

[r0cafella]

Just now, The College Dropout said:

From our collective memory - if they had seen this coming and put in sponsorships day 1, things could’ve been different.  
 

 

I guess everyone was just so keen to get the sale over the line. 
 

In retrospect, how this has all panned out was obvious. 
 

I also think significant relaxation of the rules is inevitable. But the PL will try and kick it down the road for as long as possible.  May end up being years still.  

Why do you think the rules will be significantly relaxed? 

[The College Dropout]

1 minute ago, TheBrownBottle said:

To close any remaining gaps - but FMV already existed.  It was the APT rules which closed the remaining gaps.  It was never possible for PIF to come in and chuck huge sums of money about.  If they (or Staveley) thought that it was, then they were guilty of doing the same amount of due diligence as Mike Ashley did. 

It sounds like Staveley and the club thought we could secure multiple deals at a price point higher than the PL allowed.  That seems to be a fact at this point. And this is with APT in place. You would assume they thought higher was possible prior. 

[The College Dropout]

1 minute ago, r0cafella said:

Why do you think the rules will be significantly relaxed? 

I think the APT stuff is illegal and the only amendments that will stick  will allow us deals 10-30% higher than what would’ve otherwise been approved.  Maybe more.  

[Kid Icarus]

I've been thinking this for a while but haven't posted about it. You know how there's often talk around sportswashing, greenwashing, this-that-and-the-other-washing?

I'm not saying it's been done by design or anything, but to what extent do you think all of this absolute bollocks around legalities, regulations, loophole finding and so on within football is creating these little armies of fans who now champion 'gaming the system' for their football team, who otherwise would have looked down on it?

 

Not sure I've articulated that well tbh, it's hard to explain what I mean. 

[TheBrownBottle]

15 minutes ago, The College Dropout said:

Am I wrong in thinking they could’ve announced a £100m stadium sponsor day one of the takeover?

 

The APT rules came in 2 weeks after the takeover iirc. 

 

 

 

Yeah, on this one, you’d be wrong - unless of course FMV could be proved.

 

Man City are up on charges for manipulation and breaching the FFP rules and regs - including potentially illegal actions to circumnavigate them.  Of course just as today the club could bank the money, but it wouldn’t ‘Hit the books’ for FFP purposes.

 

Here’s an extract from the PL Handbook for 20/21 - the season before the takeover (rule E.46):

 

[The College Dropout]

1 minute ago, Kid Icarus said:

I've been thinking this for a while but haven't posted about it. You know how there's often talk around sportswashing, greenwashing, this-that-and-the-other-washing?

I'm not saying it's been done by design or anything, but to what extent do you think all of this absolute bollocks around legalities, regulations, loophole finding and so on within football is creating these little armies of fans who now champion 'gaming the system' for their football team, who otherwise would have looked down on it?

 

Not sure I've articulated that well tbh, it's hard to explain what I mean. 

I don't think most fans know enough or care enough about it. Especially non-NUFC fans.

 

If you're an Arsenal fan. You're a bigger club than Newcastle, they should be able to buy any Newcastle player. Financial Fair Play means Newcastle rich-Owners don't matter that much. Tough luck Geordies. Get us Isak. They don't care about the details. Just "111 charges", "Financial Fair Play". Madrid will take their best players. No need to take sides in a status quo.

[TheBrownBottle]

6 minutes ago, Kid Icarus said:

I've been thinking this for a while but haven't posted about it. You know how there's often talk around sportswashing, greenwashing, this-that-and-the-other-washing?

I'm not saying it's been done by design or anything, but to what extent do you think all of this absolute bollocks around legalities, regulations, loophole finding and so on within football is creating these little armies of fans who now champion 'gaming the system' for their football team, who otherwise would have looked down on it?

 

Not sure I've articulated that well tbh, it's hard to explain what I mean. 

Do you mean the sportswashing that’s usually pointed at fans of clubs who end up defending the indefensible because the indefensible are funding their favourite football club?

 

Not sure, but it’s at the very least a positive externality for the club’s owners. 

[The College Dropout]

10 minutes ago, TheBrownBottle said:

Yeah, on this one, you’d be wrong - unless of course FMV could be proved.

 

Man City are up on charges for manipulation and breaching the FFP rules and regs - including potentially illegal actions to circumnavigate them.  Of course just as today the club could bank the money, but it wouldn’t ‘Hit the books’ for FFP purposes.

 

Here’s an extract from the PL Handbook for 20/21 - the season before the takeover (rule E.46):

 

Not knowledgeable here at all. But related parties are different to associated parties. A material difference that we could've exploited which is why it was closed.

 

This is reductive. But if it wouldn't have a material impact, they wouldn't have changed it,

 

 

Edited Wednesday at 13:00 by The College Dropout

[Kid Icarus]

1 minute ago, TheBrownBottle said:

Do you mean the sportswashing that’s usually pointed at fans of clubs who end up defending the indefensible because the indefensible are funding their favourite football club?

 

Not sure, but it’s at the very least a positive externality for the club’s owners. 

 

Pretty much yeah, like all of these cults of [personality/fandom/brand here] that are an online phenomenon. 

 

Look at Man City's fanbase now and there's like a dedicated group of fanatics who are out there batting for Man City not just on a human rights front, but on a legal front too, gathering any information they can use and every argument available to them. All because it's tied to the club they support.

[TheBrownBottle]

3 minutes ago, The College Dropout said:

Not knowledgeable here at all. But related parties are different to associated parties. A material difference that we could've exploited which is why it was closed.

There’s no difference - related party transactions is a standard term in commercial procurement; any second company which had links to PIF would under an FMV test.  It has no difference to what was meant by associated party.

 

The rules were tightened and made less opaque in 2021, but FMV was already in place.  We couldn’t just get a £100m ground sponsor - which is why Man City didn’t. 

[TheBrownBottle]

1 minute ago, Kid Icarus said:

 

Pretty much yeah, like all of these cults of [personality/fandom/brand here] that are an online phenomenon. 

 

Look at Man City's fanbase now and there's like a dedicated group of fanatics who are out there batting for Man City not just on a human rights front, but on a legal front too, gathering any information they can use and every argument available to them. All because it's tied to the club they support.

I think there’s something in that, personally.  Look at the divvies who turned up at Staveley’s Barclays case to offer support - and the numbers in ours who’ll bend over backwards to blow smoke up the arse of PIF, despite what they are.  You buy yourself a horde of loyal, angry and unquestioning nutters online. 

[TRon]

1 hour ago, TheBrownBottle said:

To close any remaining gaps - but FMV already existed.  It was the APT rules which closed the remaining gaps.  It was never possible for PIF to come in and chuck huge sums of money about.  If they (or Staveley) thought that it was, then they were guilty of doing the same amount of due diligence as Mike Ashley did. 

 

The Saudis don't strike me as being the type to bother much with due diligence, they probably wanted a club and left it up to Staveley to deliver. But if there really is no way to close the gap using your wealth as an advantage, I can only assume that they will run the club as an investment only, and tbh they can use the PSR/FFP stuff to do that without risking any of their own money. A sort of souped up Mike Ashley plan.

 

If they really want a top club, then they might consider selling us and buying one of the cartel clubs at some point. I don't think this will happen fWIW, but I wouldn't rule it out either. They can probably afford it more readily than anyone else.

[LFEE]

2 hours ago, JT24 said:

Blimey, how did their revenue jump up to 616m?

Yet they made a loss of £17.7m still.

[Unbelievable]

1 hour ago, TheBrownBottle said:

Arsenal’s revenues have grown more in one season than ours have in total since the takeover - this is the problem NUFC has, the increases we’ve had are not seeing us substantively gain ground on the ‘Big Six’. 

“Commercial performance, in the second year of a new commercial strategy, was strong across the board and revenues

were significantly improved to £218.3 million (2023 - £169.3 million).”

 

A 28,9% increase. Not to be sniffed at, but ours has grown more (40%) year on year since the takeover.

 

The other avenues of revenue increase are matchday, TV revenue and prize money. The former we probably wouldn’t want PIF to increase too much (who wants higher ticket prices) and the latter two are pretty much outside of PIF’s control.

[r0cafella]

24 minutes ago, Unbelievable said:

“Commercial performance, in the second year of a new commercial strategy, was strong across the board and revenues

were significantly improved to £218.3 million (2023 - £169.3 million).”

 

A 28,9% increase. Not to be sniffed at, but ours has grown more (40%) year on year since the takeover.

 

The other avenues of revenue increase are matchday, TV revenue and prize money. The former we probably wouldn’t want PIF to increase too much (who wants higher ticket prices) and the latter two are pretty much outside of PIF’s control.

Again as has been said repeatedly the % increase is totally irrelevant. What matters is the gap which is increasing. 

[Unbelievable]

8 minutes ago, r0cafella said:

Again as has been said repeatedly the % increase is totally irrelevant. What matters is the gap which is increasing. 

Basic mathematics says that we are catching up with a higher (commercial) revenue growth rate. At current growth rates we overtake them in five years from now.

[Stifler]

1 hour ago, TRon said:

 

The Saudis don't strike me as being the type to bother much with due diligence, they probably wanted a club and left it up to Staveley to deliver. But if there really is no way to close the gap using your wealth as an advantage, I can only assume that they will run the club as an investment only, and tbh they can use the PSR/FFP stuff to do that without risking any of their own money. A sort of souped up Mike Ashley plan.

 

If they really want a top club, then they might consider selling us and buying one of the cartel clubs at some point. I don't think this will happen fWIW, but I wouldn't rule it out either. They can probably afford it more readily than anyone else.

Staveley did 3 years of due diligence between her first visit to the club and the Saudi bid, and 4 years by the time she bought us.

[Keegans Export]

10 minutes ago, Unbelievable said:

Basic mathematics says that we are catching up with a higher (commercial) revenue growth rate. At current growth rates we overtake them in five years from now.

This has been explained before though - we've already signed off the big deals.

 

The amount required for that 40% growth increases each time, where is it all coming from?

 

40% on £150m = £60m

40% on £210m = £84m

40% on £294m = £118m 

...and so on

[The Prophet]

2 minutes ago, Keegans Export said:

This has been explained before though - we've already signed off the big deals.

 

The amount required for that 40% growth increases each time, where is it all coming from?

 

40% on £150m = £60m

40% on £210m = £84m

40% on £294m = £118m 

...and so on

 

The rate will slow down eventually, once we exhaust our commercial sponsorship opportunities.

 

We don't need to catch them in my view, not at first anyway. Once you reach a certain amount of annual revenue, you can be very competitive if you're ran well, with smart recruitment and a solid academy.

 

The biggest leaps after that will come with on-field success.

[TRon]

21 minutes ago, Stifler said:

Staveley did 3 years of due diligence between her first visit to the club and the Saudi bid, and 4 years by the time she bought us.

 

I'm sure she did tbh. Newcastle was a very big club being run on a shoestring to give Mike Ashley free brand awareness for SD and profits on top as a bonus. There was always potential to maximise it as an investment, and PIF have realised that in a very short space of time. The question now is how much money they will continue to pump in, and whether that will be considered worthwhile from a ROI perspective.

 

If we can ignore the illegal APT rules for example, we could quickly set up sponsorships to buy 2-3 top class players and a new contract for Isak in the summer. The alternative which we are being nudged towards would be to sell Isak and try and buy a replacement with the proceeds.