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Football Finance
- Thread starter King Binny
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Thanks for this. No surprises re Everton - I think 777 will get waved through eventually and will be disastrous for them. All large companies have their legal controversies but these guys either have a lot more than most or don't know how to manage them.
We should know later this month if Chelsea will be in trouble for PSR, but we already know they're under investigation for off-book payments during the Abramovich era. On PSR, I think the key point in the article is the Swiss Ramble analysis - Swiss is thorough and knows his stuff. He reckons they'll get away with it by the seat of their pants but will be fucked next year. So it's touch and go this year (there will be a margin of error in Swiss's calculations, but he must be fairly sure to come down off the fence), but they have a mountain to climb, financially speaking, between now and the end of June. And regardless of all that, we're talking about the £105m limit for the Premier League - they are stuffed for UEFA's rules, even if they do qualify, and that must surely be the least of their ambitions to make their business plan work.
On Villa, and also rumours about Forest being in a spot of bother, it just feels like we could end up with massive changes to the table post season-end with points deductions being handed out to loads of teams and a huge litigation burden for the Premier League to address. They're right to try to accelerate proceedings, but I think they need to move to an automatic penalty system, with heavier penalties for clubs that mis-report their figures and are found to have done so on further investigation (so there is an incentive to be honest in the first place).
Failing that, to give sporting certainty, they need to come up with another system that is less open to manipulation. And rather than having fluffy and subjective rules about valuing connected party transactions, they just need to discount them altogether in the PSR calculations. If a club is saying they can get the same money from a third party sponsor then why wouldn't they just save their owner some money and go out and do that? Answer - because they can't.
@Beamrider a question regarding amortizing the transfer fee. How do clubs treat the add-onns? Is it booked in the year it gets triggered / payable?
Yes, and then amortised over whatever remains of the player's contract. So if he signs on a five year deal and an add on is triggered after two years, it is booked after 2 years and written off over the remaining 3 years of his contract.
Only exception to this would be in group accounts if the club were to be bought ought after the initial signing - in that case, an estimated value would be recognised in the group accounts only. In the club's books (the ones used for FFP), it would only be accounted for once it's triggered.
I mean if the clubs were prudent, they'd have booked it as a liability at the purchase date, no? With some sort of balance sheet accounting.
In accountancy speak it's referred to as a contingent liability and would only be recognised when triggered. There is usually a note in the accounts that gives details of liabilities (and additional income) that could be triggered (which covers off your "prudent" point), but there is no obligation to record them, nor is it even permitted, as companies could artificially depress their profits (usually done for tax reasons) if it were to be allowed.
It wouldn't be right to recognise it up-front as it might never be triggered - eg think about Everton and the fees for Dele Alli. They're never going to trigger them, so it would be nonsense to record them up front.
No I agree re: Profit. I was talking about balance sheet accounting which you alluded to in your contingent liabilities.
That would be so hilarious if the Ev got a second fine. Heads will explode.
I’m doing my food shopping in the morning, I must add popcorn to my list.
salty or sweet?
Sweet. What do you think I am, a psychopath?
*puts the salted popcorn back in the basket with the ice Hockey Mask, meat cleaver and assorted body parts…*
I know we are not in danger of breaching PSR but are we close and if so, how does it impact future transfer windows?
@Beamrider
Thanks in advance!
@Beamrider
Thanks in advance!
Is it likely, or even legal, to get a points deduction twice in the one season? If the first one was for the 3 years to 2022 (I ave no idea what is was for), then surely a breach of the 3 years to 2023 should be punished the following season to the first punishment?
Don't get me wrong, it would be funnier than fuck if the blueshite get a second deduction this season, just wondering on how it might work...
Is it to do with the current fine effectively being for last year and any new one being for this year?
Would be funny as fuck like.
Not so funny when City & Chelsea make bigger breaches and get away with it mind…
From what I read, its more to do with clubs were not happy at the length of time it was taking to investigate. And subsequent punishments were handed out (think City)...
Therefore they passed a rule which meant that all clubs must submit annual accounts to year ending 31st December. Which kicked in this year.
The thinking was, it'd give the Premier League 14 days to review the accounts at a high level to determine whether PSR had been adhered to or breached.
Clubs would then be punished in plenty of time for the end of the season.
Obviously, now the reality is hitting, clubs are looking to delay the punishments.
If Newcastle did have to have a fire sale, is there anyone we think they'd realistically sell to us?
In that squad I'd be all over their CMs Guimares and Joelinton. I think the latter would be such a Klopp player in the middle, although we have a crowded roster at LCM.
Elsewhere on the pitch I'd have Livramento as a versatile back up full back, and I wonder if we'd reconsider our interest in Botman who we had seriously strong links with before he moved there.
I imagine that if they were forced to sell they'd look to Saudi (for obvious reasons) or non PL leagues.
In that squad I'd be all over their CMs Guimares and Joelinton. I think the latter would be such a Klopp player in the middle, although we have a crowded roster at LCM.
Elsewhere on the pitch I'd have Livramento as a versatile back up full back, and I wonder if we'd reconsider our interest in Botman who we had seriously strong links with before he moved there.
I imagine that if they were forced to sell they'd look to Saudi (for obvious reasons) or non PL leagues.
Bruno G, livra and isak I'd like
I’d say the first they’ll try and sell are home grown or ones who’ve been there for a while.
Basically - all the players Dreamie would sign in a heartbeat.
We might get a bargain on Ryan Fraser!!!!
Profit-wise we’re not even close on the available results, but we’ll take a dip this year with no Champions League revenue. Shouldn’t be enough to cause any problems.
As far as future windows are concerned, the issue is going to be the new measure of wages/amortisation to turnover. We’ll be fine during the transition period where the target ratio is more relaxed, but as it starts to come down we will need to get a grip on our wage costs and transfer spend, so we may need to make a few sales here and there to meet the longer-term targets. Practically speaking, it’ll be easier to drive the costs down than to just ramp up commercial revenue - I’m sure we’re constantly trying to do that but it‘s easier said than done, especially if the big properties (kit deal, shirt sponsosrhip) are already sewn up.
At the risk of starting up the debate again, a sale of Salah (which I would be completely against on footballing terms) would give us loads of headroom as the profit would count as a reduction in the footballing costs and the wage reduction would have a massive impact too. It’s the sort of move we may start to see more of in future, hence Newcastle talking about selling Guimaraes.
I can run some numbers but tied up most of the day today, and there will inevitably be some inaccuracies given the level of detail available publicly.
It’s an interesting question because it would make relegation almost inevitable if it happened. Reality is the current 10 points should have gone through last year but the panel ruled it was unfair to fast-track the decision which is why it happened this year. The rules changed in the mean time to take that power away from the panel (and probably because the PL thought Everton were fannying around too much).
In one sense, it would feel harsh since some of the offence is basically because of legacy losses from earlier years causing a repeat problem, but on the other hand when I looked at Everton’s results I didn’t think they’d have a problem this time (and I’ve said so previously) because they’d have to really go for it to match the losses they made for the old year that dropped out. So the trend would not be towards compliance and that’s not a good look. If they have lost enough to be in trouble again then a large part of me says fuck ‘em, they don’t give a shit about the rules, why should the rules give a shot about them.
Shame they don't sell bitter, they'd sell a lorry load today.
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