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Football Finance


The PL is looking to move to the football costs ratio that UEFA is now using, albeit with a higher allowance. These kinds of transactions won’t impact the ratio, so I think they are less inclined to change the rules as it will only be a short-term fix. Given the backlash over the teams that have been punished, I wonder whether they’ve effectively given the nod to this kind of stuff to keep the clubs from getting restless.
As regards Chelsea, the more they take the piss, and the more public opinion goes against them, the more likely it is that the PL will do them for the historic stuff, which will be a bigger problem for them, as it involves rule-breaking, as well as financial offences.
And on the women’s team, it’ll be worth fuck all. Despite the boost post the women’s Euros win, women’s football still attracts little in the way of sponsorship, and is loss-making. Chelsea Women lost £4m on £9m turnover last year. I wouldn’t give you a pound for it. If they’ve put a huge figure on it to solve PSR then a tribunal will be able to knock that down, no problem. It was different last time with the hotels and car park as they probably were worth what they “sold” them for.
 
Interesting that the statement says that "The Friedkin Group will remain a lender to the Club and is proud to have played a key role in enabling the new stadium to be built". So even in the period of the year when they should be most cash rich, they still needed to borrow money from Friedkin. And I suspect that "will remain a lender" means that they won't be demanding repayment of the money they lent to Everton, rather than that they will continue to bankroll them. They're probably not able to demand repayment under the terms of their loan, meaning they can't even if they want to. which they probably do want.
The Ev are going to run out of money very soon if they don't get a deal done, and if a responsible investor has decided to walk away, leaving loaned funds at risk, then they're going to need an irresponsible investor (or a debt reduction via administration) to get a deal done.
This is just a reaction to the limited information that's out there and no doubt more detail will emerge over the next few days.
Not good at all for the Blues.
EDIT:
Trying to think about what the "legal risk" may be re 777 and I'm wondering, given rumours about them, whether Friedkin may have concluded that they are not a legitimate organisation, and therefore any payment to them, including repayment of debt, might be illegal.
 
This from the BBC gives a bit more detail (apparently the Friedkin loan was mostly to refinance existing debt):

The Friedkin Group seemed like being the latest saviours of the Toffees but talks have fallen apart and they informed owner Farhad Moshiri of their desire to pull the plug on the deal on Thursday.

BBC Sport understands the major stumbling block has been the situation with another former prospective buyer in 777 Partners/A-Cap.

They lent the club £200m during their attempted takeover and the issue was not paying that off but the serious legal action they are mired in in the US.

Friedkin Group did not know how long this would last for and there would be too much risk involved in continuing, so, instead of waiting a number of months for those issues to be resolved, they have decided to walk away.

Now The Friedkin Group have become the latest creditor to the club after lending them £200m during their short period in trying to purchase Everton.

For Moshiri, it's back to square one as be seeks to find another buyer.

EDIT - obviously the BBC didn't say "BlueShite", that was @dee. 🙄
 
Maybe we should help them out and buy Bramley-Moore Dock for a pittance. The Liverpool Womens team need a new stadium.
 
Maybe we should help them out and buy Bramley-Moore Dock for a pittance. The Liverpool Womens team need a new stadium.
If they don't get their shit together soon, there's a very real risk that place could just sit there, unfinished, for a few years, like the new Royal Hospital did.
 

I think some sort of ban is necessary, assuming the charges stand up. Chelsea would have got some mitigation, or even suspension of that ban for self-reporting (although I think the journos were on to them so they might not have done this if it wasn't going to come out anyway).
But this is where their piss-taking on their financials may bite them (selling the car parks etc). If I were deciding on the length of the ban, I'd be included to give less mitigation because of their recklessness and piss-taking over the last few years.
Popcorn at the ready...
 
Just hit them with a relegation and an extended ban from European Football - the reduction in funds and removal from comps will ruin them for a generation.
 
That's completely insane.

I guess. I mean, let's say our guys really do know how to pick winners in the transfer market, at least times to come out ahead?

As they themselves say, they are limited to the winners they pick that also fit our team.

But what if they weren't? What if they could buy several teams worth of talent, on a low enough wage that they could be loaned out without realizing a loss. What if those players were fine with it because it represented some degree of security due to contract lengths.

They're pimps. So long as players as a whole continue to increase in price beyond inflation, then they will be able to realize profits on their holdings, even if they aren't that well chosen. They don't need to worry about whether they work that well as a team or not. For the last many years this has been true. I mean, look at Sepp. He's a pretty average footballer and we're going to make money on him, and he's barely played for us.

Sure, sometimes it won't work, but it also can work out much better than Sepp too. Plus, you have a pool of talent that you're preventing anyone else from having.

It won't make for a title winning team, but there's no evidence that's what they're trying to build. If they did it the responsible way, they probably wouldn't get there either.
 
Some thoughts on Chelsea's business model and how things will go for them this year.
Firstly, I've done some estimates on the impact of their spending under FFP rules (i.e. 5-year contract limits). I reckon their amortisation charge will be in excess of £260m next year, as things stand. For comparison, ours, per our last filed accounts (2023), was £106m.
So if we were to assume all other figures stay the same as Chelsea's 2023 accounts, they're on track to make a loss this year (before sales) somewhere north of £300m.
With a squad as bloated as theirs, their wage bill must surely be higher than the last reported one in 2023 (£373m), but other costs were likely impacted by the sanctions on the Russian at the end of the 2022-23 season, so may have seen some improvement.
So they need significant player sales to save them for Premier League PSR rules, or else they'll be selling shit to themselves again this year.
However, for UEFA purposes, the test is based on the football costs ratio. Broadly this is wages + amortisation divided by revenue plus player sales (the latter on a 3-year average).
I reckon they've raised about £90m profit on player sales so far this window, but only 1/3 of that counts towards their ratio (plus 1/3 of player profits from each of the last two years).
The target ratio is 80% (which is generous IMHO). I reckon they're at about 117%.
They only need to make about £0.7bn profit on player sales to get into compliance.
Something tells me they're not going to get there.
 
Some thoughts on Chelsea's business model and how things will go for them this year.
Firstly, I've done some estimates on the impact of their spending under FFP rules (i.e. 5-year contract limits). I reckon their amortisation charge will be in excess of £260m next year, as things stand. For comparison, ours, per our last filed accounts (2023), was £106m.
So if we were to assume all other figures stay the same as Chelsea's 2023 accounts, they're on track to make a loss this year (before sales) somewhere north of £300m.
With a squad as bloated as theirs, their wage bill must surely be higher than the last reported one in 2023 (£373m), but other costs were likely impacted by the sanctions on the Russian at the end of the 2022-23 season, so may have seen some improvement.
So they need significant player sales to save them for Premier League PSR rules, or else they'll be selling shit to themselves again this year.
However, for UEFA purposes, the test is based on the football costs ratio. Broadly this is wages + amortisation divided by revenue plus player sales (the latter on a 3-year average).
I reckon they've raised about £90m profit on player sales so far this window, but only 1/3 of that counts towards their ratio (plus 1/3 of player profits from each of the last two years).
The target ratio is 80% (which is generous IMHO). I reckon they're at about 117%.
They only need to make about £0.7bn profit on player sales to get into compliance.
Something tells me they're not going to get there.
i cant wait till they also get banned from transfering players by the PL for Roman's indiscretions
 
i cant wait till they also get banned from transfering players by the PL for Roman's indiscretions
I keep hearing people talking about how they've created this unique trading environment, and then you look at them getting profits for the likes of Maatsen or Gallagher. It's briefly possible to get caught up in it and think that maybe it does make some sense. Basically they're profiting by hoarding a load of players and relying on inflationary pressures to get huge sums for average to good players (as we're doing this window). Maybe I got it all wrong and Boehly is just ahead of the game and spotted something everyone else missed, even if it is against the spirit of the sport. Maybe they'll make a film about his genius in the few years and have Christian Bale or Steve Carell play him, while Margot Robbie lies in the bath and explains the transfer market to us. They could call it The Big Shirt.
So I went away and ran some numbers, and it's still absolutely bat-shit.
 
If what Chelsea is doing leads to a film featuring Margot Robbie in a bath then I can safely say Boehly has our full support.

There's also a film to be made about being in Chelsea's B / Bomb Squad; Turning up each week, knowing 20 of them have zero chance of selection, and just turning up for the vibes. Gary Oldman would be the perfect coach, nobody calls someone a useless shit cunt better than Gary. Essentially it's Slow Horses + football.
 
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