NUFC specific FFP/PSR discussion

[NWMag]

With a disappointing window behind us, does anyone know what our position is looking like post June 2025? 
 

I am assuming we will have more wiggle room but I don’t have a clue about the figures to be honest.

[timeEd32]

10 minutes ago, NWMag said:

With a disappointing window behind us, does anyone know what our position is looking like post June 2025? 
 

I am assuming we will have more wiggle room but I don’t have a clue about the figures to be honest.

We don’t know what the rules will be though likely either what they are now or something more like UEFA’s. There’s some calculations in the OP (see UEFA section), but we also have a lot of expiring contracts in June that give us more options than the last couple seasons.
 

Who gets extensions and what sponsorships we announce in the coming months will be key things to watch. 

[Stifler]

7 minutes ago, timeEd32 said:

We don’t know what the rules will be though likely either what they are now or something more like UEFA’s. There’s some calculations in the OP (see UEFA section), but we also have a lot of expiring contracts in June that give us more options than the last couple seasons.
 

Who gets extensions and what sponsorships we announce in the coming months will be key things to watch. 

This very much. Going into the transfer window after we sold Minteh, and Anderson, we were told that we had to make something like a £15m profit on players this year, however we made a £60m bid for Guehi, so that is £12m more on top of that. We know that we have no players to sell, unless we sold someone like Bruno, Isak, or Gordon, which would then put us a step back regardless.

[Turnbull2000]

https://www.forbes.com/sites/zakgarnerpurkis/2024/08/31/the-rigged-system-stopping-newcastle-united-mounting-a-challenge/

Quote

 

Meanwhile, Chelsea built on a distinctly average campaign last year by spending as lavishly as ever and Manchester United celebrated one of its worst seasons in the past three decades with another $150 million net spend.

 

Had these clubs earned the right to have a better crack at Champions League qualification than Newcastle United and Aston Villa? No, they benefited from being part of an existing hierarchy that has brought in rules that limit the investment of challengers.

 

We are now seeing the full impact of these ‘financial fair play’ regulations: The established order is allowed to underperform and invest heavily while newcomers that dare to outperform them cannot build on their achievements.

 

There’s a way to describe this situation it’s called a rigged system.

 

 

Trying not to feel angry about it all. Aston Villa will probably experience similar soon - the rules that the cartel clubs demanded will yank them off their upward trajectory.

 

 

Edited August 31 by Turnbull2000

[timeEd32]

3 minutes ago, Stifler said:

This very much. Going into the transfer window after we sold Minteh, and Anderson, we were told that we had to make something like a £15m profit on players this year, however we made a £60m bid for Guehi, so that is £12m more on top of that. We know that we have no players to sell, unless we sold someone like Bruno, Isak, or Gordon, which would then put us a step back regardless.

The £15m profit was for 2023/24. We’re allowed a healthy loss this season, but because of previous purchases and wages we entered the financial year using much of that room.

[80]

Sticking this in here for the more hardcore PSR people. 

 

Does anyone know for sure how fee amortisation works? I've heard a couple of assumptions, but nothing really concrete. What I'm asking is is it worked out on a daily basis, or some other way? 

 

In other words - a £50m fee amortised over 5 years, £10m p/a. Does that mean it counts as approx £27k for each day that passes from the moment of purchase? So if you buy that player 3 days before the June deadline, it goes down as approx £80k on that year's PSR?

 

Was wondering just how advantageous having a little money to spend in June is.

 

I've also heard suggestions you can move the weight of a deal around i.e. even though you bought with three days of the PSR window left, you can absorb a full year's worth of amortisation for that current year if you want to use up some slack you have. Is this true?

 

Finally, another question on a similar note: if elements of a fee are conditional, how are the additional sums factored in once they're triggered?

 

Going back to our £50m player, let's say an extra £10m is due if he wins the CL. It happens in year 2 of the 5 year contract, paid at the beginning of year 3. Would that sum amortise over the shortened tail of the contract? I.e. £10m p/a becomes £13.33m for the remaining 3 years of his contract? Or something else?

 

No complaints if no one knows, by the way...

[Zero]

From an accounting POV the amortization should be based on the player’s contract. If the player we bought has his contract beginning at Jul, then the first part of amortization expense should hit Jul, even if we completed the deal at Jun.

 

Whether it’s down to months or days I ain’t sure, there may be special rules under FFP/PSR. Same goes for the conditional cost. If it’s normal business then yes it should be amortised by the remaining length of contract (say 10m extra, 2 years left, then 5m extra amortization per year once the conditions are met)

 

 

Edited September 4 by Zero

[Abacus]

7 hours ago, 80 said:

Sticking this in here for the more hardcore PSR people. 

 

Does anyone know for sure how fee amortisation works? I've heard a couple of assumptions, but nothing really concrete. What I'm asking is is it worked out on a daily basis, or some other way? 

 

In other words - a £50m fee amortised over 5 years, £10m p/a. Does that mean it counts as approx £27k for each day that passes from the moment of purchase? So if you buy that player 3 days before the June deadline, it goes down as approx £80k on that year's PSR?

 

Was wondering just how advantageous having a little money to spend in June is.

 

I've also heard suggestions you can move the weight of a deal around i.e. even though you bought with three days of the PSR window left, you can absorb a full year's worth of amortisation for that current year if you want to use up some slack you have. Is this true?

 

Finally, another question on a similar note: if elements of a fee are conditional, how are the additional sums factored in once they're triggered?

 

Going back to our £50m player, let's say an extra £10m is due if he wins the CL. It happens in year 2 of the 5 year contract, paid at the beginning of year 3. Would that sum amortise over the shortened tail of the contract? I.e. £10m p/a becomes £13.33m for the remaining 3 years of his contract? Or something else?

 

No complaints if no one knows, by the way...

 

Pretty sure Swiss Ramble was asked this exact thing about the granularity of amortisation, and he seemed to think it went by day (none of the accounts state this clearly, but it would make sense). So a player bought on PSR deadline day costs you virtually nothing for that period, as it's just one day's worth you are paying for.

 

I can't quite see how you could shift the weight of a deal around per point 2. But I suppose that you could assuming that's how you had always treated player contracts. I.e., you couldn't take a years worth of amortisation for one player and only 3 days worth in the same period for a different one. That said, I'm not sure the PSR rules are clear enough to make it clear if there's a prescribed treatment either way there as they have somehow created an entire shadow financial system.

 

On the conditional elements, the only way that could work is as you described - i.e. the minute they are triggered (regardless of when they are paid) and then being amortised over the remaining contract length at that point. They are, after all, part of the original sale contract and the conditions would or should be tied to that.

 

I guess the option there would be to treat it like a one-off bonus payment to the selling club and write it off in one go at the point it's triggered. But I can't see that being allowed as it was essentially always part of the original purchase price.

[Keegans Export]

You can't shift the rate of amortisation, aside from contract length/extensions.

 

It's one of the things that got Derby in bother. They basically backloaded the amortisation by arguing that a players value decreased more going into the last year of his contract than going (for example) four years left to three. That's probably fair but it meant they were creating a huge black hole down the line and the EFL banned it. I'm assuming the PL will have done the same.

 

 

Edited September 4 by Keegans Export

[timeEd32]

We'll know more in a couple months when the accounts come out, but all signs pointing to the math in this thread being quite accurate...

 

 From Hope:

 

Quote

It is not the news Newcastle supporters want to hear, but everything I’m told leading into January is that the parameters of PSR remain tight ahead of June’s accounting deadline.

 

Indeed, Newcastle Confidential has been told by multiple sources that there will need to be player outgoings before the summer, if there are to be incomings in the winter window.

 

Fans will point to the club chasing a deal worth up to £60million in August for Crystal Palace defender Marc Guehi as evidence as to there being money to spend. But even if the Guehi transfer had happened, Newcastle would have then needed to sell to balance the PSR deficit in January or June.

 

[Erikse]

I was never really convinced that we would go ham in january despite the summer window, we only did it once, and everything was on the line back then. Can't expect miracles from Mitchell if we don't have money to spend, but there might be a sale still that can help us. 

 

 

Edited Thursday at 20:57 by Erikse

[Keegans Export]

29 minutes ago, timeEd32 said:

We'll know more in a couple months when the accounts come out, but all signs pointing to the math in this thread being quite accurate...

 

 From Hope:

 

 

If we were really going to drop £50m+ on Guehi just weeks after the scramble on 30th June, knowing it would put us in exactly the same position a year later...

[Sibierski]

Thought the sponsors would flow in by now, but I can only assume it’s being held off to end of season to see if we’re in Europe to get a boost. 
 

Find it hard to believe we would buy Guehi and need to sell, when we have fuck all assets to sell without it being a signing we’ve made under new owners. 

[gjohnson]

So the long and short of it is that we're probably pretty much skint.

 

Would a Monopoly analogy work here...

 

We've got no cash left, but have 3 hotels (Isak, Gordon, Bruno) a couple of utilities (Joelinton, Botman) and a few houses (Hall, Livramento, Willock). We've landed on a chance square that says pay property maintenance or whatever and the only way to realistically get out of it is to sell a hotel as the rest won't bring in enough to pay it, let alone help buy more hotels.

 

Sell a hotel....worked for Chelsea

 

 

Edited Thursday at 21:40 by gjohnson

[80]

1 hour ago, Keegans Export said:

If we were really going to drop £50m+ on Guehi just weeks after the scramble on 30th June, knowing it would put us in exactly the same position a year later...

It depends on your tolerance for risk, to be fair. Getting a good player now and losing a makeweight later can be a great deal... But if something goes wrong you're in trouble, obviously.

 

There's a big piece of me that would be happy if we keep our powder dry in January.

 

 

Edited Thursday at 22:52 by 80

[TheBrownBottle]

3 hours ago, timeEd32 said:

We'll know more in a couple months when the accounts come out, but all signs pointing to the math in this thread being quite accurate...

 

 From Hope:

 

 

Yep, we have very little headroom, and revenues won’t have grown in any significant way this year.  We’re in a sell to buy position. 

[TheBrownBottle]

2 hours ago, Sibierski said:

Thought the sponsors would flow in by now, but I can only assume it’s being held off to end of season to see if we’re in Europe to get a boost. 
 

Find it hard to believe we would buy Guehi and need to sell, when we have fuck all assets to sell without it being a signing we’ve made under new owners. 

Sponsors don’t need to sign up to long term deals - besides, the owners have been in for three years; that’s three years of lost revenue re sponsors.

 

They aren’t coming is my view at this point. 
 

Re Guehi - we would definitely have needed to sell before the end of June to sign him.  But that does mean that we could have waited until the end of the season - which would have been less of a problem squad-wise.  We don’t have any financial headroom left. 

 

 

Edited Thursday at 23:36 by TheBrownBottle

[Erikse]

8 minutes ago, TheBrownBottle said:

Yep, we have very little headroom, and revenues won’t have grown in any significant way this year.  We’re in a sell to buy position. 

 

PSR is crazy. In the last 2 windows we've signed Hall, Vlachodimos, Kelly and Osula for around £70m. Sold Minteh and Anderson for like £75m. So basically net spent is -£5m last 2 windows, and we need to sell to be able to spend? I didn't think our wage budget was all that crazy, but I guess it has gotten a lot bigger with new contracts, Kelly(?), Tonali and so on. I know there's amortization from older signings, but overall our spending hasn't been that crazy since takeover.

 

 

Edited Thursday at 23:40 by Erikse

[r0cafella]

5 minutes ago, Erikse said:

 

PSR is crazy. In the last 2 windows we've signed Hall, Vlachodimos, Kelly and Osula for around £70m. Sold Minteh and Anderson for like £75m. So basically net spent is -£5m last 2 windows, and we need to sell to be able to spend? I didn't think our wage budget was all that crazy, but I guess it has gotten a lot bigger with new contracts, Kelly(?), Tonali and so on. I know there's amortization from older signings, but overall our spending hasn't been that crazy since takeover.

 

 

 

Remember it's a 3 year rolling period we've balanced to nothing over the last 12 months because we had to. 

 

And no our spending hasn't been crazy, but this is rules working as designed. We are plebs have been told to stay in our place. 

[TheBrownBottle]

2 minutes ago, Erikse said:

 

PSR is crazy. In the last 2 windows we've signed Hall, Vlachodimos, Kelly and Osula for around £70m. Sold Minteh and Anderson for like £75m. So basically net spent is -£5m last 2 windows, and we need to sell to be able to spend? I didn't think our wage budget was all that crazy, but I guess it has gotten a lot bigger with new contracts, Kelly(?), Tonali and so on.

Our amortized transfers + salaries are pretty much in line with anticipated turnover, and our turnover this year will be pretty much the same as last year’s.  We needed a financial boost to be able to sign players without selling, but we haven’t brought in any new significant commercial revenues this year.  

[Erikse]

1 hour ago, r0cafella said:

Remember it's a 3 year rolling period we've balanced to nothing over the last 12 months because we had to. 

 

And no our spending hasn't been crazy, but this is rules working as designed. We are plebs have been told to stay in our place. 

 

I remember something about last deadline getting rid of that first january window, and how that would give us more room. Seems like getting rid of that first january is only good for keeping us out if trouble..

 

 

Edited Friday at 00:48 by Erikse

[r0cafella]

4 minutes ago, Erikse said:

 

I remember something about last deadline getting rid of that first january window, and how that would give us more room. Seems like it didn't, at all.

 

 

 

 

Our firesale wasn't about giving us headroom, it was purely about bringing our ffp deficit down. We were way over and that's with the fantastic growth we experienced. 

 

Now imagine if Ashley hadn't been a tight a cunt and our revenue didn't grow. We wouldn't have been able to do anything

 

Ffp/PSR is such a clever bit of manipulation I've got to admire it. 

[Erikse]

10 minutes ago, r0cafella said:

Our firesale wasn't about giving us headroom, it was purely about bringing our ffp deficit down. We were way over and that's with the fantastic growth we experienced. 

 

Now imagine if Ashley hadn't been a tight a cunt and our revenue didn't grow. We wouldn't have been able to do anything

 

Ffp/PSR is such a clever bit of manipulation I've got to admire it. 

 

Yeah, I was thinking about some talk on the forum prior to last deadline, about how we can finally spend some more come july with that first season (21/22) being replaced from the equation for the next period. That clearly wasn't the case if we still can't spend.

 

I agree, everything about FPL has been carefully calculated by the PL. Even the fact that the gap from midtable teams to bottom is getting bigger is great for keeping enough clubs on board for rule changes that suits their needs. But with what the latest court cases has revealed and how PL has reacted to them, it's finally becoming obvious to more and more people what the PSR stuff is really about. PL is acting desperate after our takeover, and it's starting to peel their mask off.

 

 

Edited Friday at 00:58 by Erikse

[TheBrownBottle]

43 minutes ago, r0cafella said:

Our firesale wasn't about giving us headroom, it was purely about bringing our ffp deficit down. We were way over and that's with the fantastic growth we experienced. 

 

Now imagine if Ashley hadn't been a tight a cunt and our revenue didn't grow. We wouldn't have been able to do anything

 

Ffp/PSR is such a clever bit of manipulation I've got to admire it. 

100%.  Which was why no-one should listen to that daft cunt Simon Jordan, who still seems to think that we should thank Ashley because the way he ran us gave PIF headroom to spend.  It was the exact opposite. 

[timeEd32]

1 hour ago, Erikse said:

 

Yeah, I was thinking about some talk on the forum prior to last deadline, about how we can finally spend some more come july with that first season (21/22) being replaced from the equation for the next period. That clearly wasn't the case if we still can't spend.

 

In January I was definitely more optimistic about the summer. I thought the revenue growth in 23/24 from Sela + CL, plus Adidas this summer and an expectation of more coming would suitably offset our amortisation + wage bill. And our behavior gave the appearance of being fine -- bringing in Hall at the deadline, not selling anyone in January. June was a wakeup call.