Football Finance
- Thread starter King Binny
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@Beamrider how perilous do Man U look? Which ever lender decides to refinance this £200m, the fees and rates will be high.
They're totally fine, for now. Per their last accounts they had £200m of bank facility undrawn and around £60m in the bank. So these instalments are covered, but they will need to raise cash for the next ones. Normally clubs try to match spending with incomings from sales, but they did't have much income coming in per those accounts.
Long-term they need to get a handle on their cash flows, but they've got facilities to cover this, which I'm sure they knew before they committed to the spending.
But we can see them starting to tighten the purse strings:
- Redundancies
- Taking a load of flak for a relatively minor (for the club, anyway) ticket price increase
- Playing a cagey game over committing to their stadium plans (they can fuck right off if they think they won't be paying for that themselves).
Point is that they're not spending with abandon any more.
But they need to shift a lot of dead wood.
I thought I read somewhere recently that clubs had voted NOT to outlaw this tactic (presumably because it'll act as a get-out for some of them). That said, I can't find the article so I may have imagined it. The only challenge on the car parks and hotels was to the valuation, using the APT rules to try to reduce the profit, but it was held that the valuation was OK, which I thought it would be. The rumours this time were of a transfer of the women's team, and the valuation question will be different there as there's little to no value in women's football at present (and indeed I'd argue men's teams are essentially worthless as they don't consistently make any money).
But this tactic isn't against the Premier League's rules.
However, UEFA has ruled against it in the past (they censured City for doing it) and it doesn't affect their new football costs ratio so the point is now moot.
And on that latter point, as I've posted previously, on a strict application of the rules Chelsea should be looking at huge fines for breaches of the UEFA rules (10s of millions of €s) so it'll be interesting whether UEFA stick to their guns.
Just to add a bit of detail on football costs ratio, I did a rough estimate of Chelsea's trend which showed they were consistently in low 90s (in percentage terms). This was for accounts to 2023 so it's hard to know the current ratio (and it's always going to be a guess as the accounts don't give the level of detail needed, plus the ratio is for the calendar year, so there is a mis-match on the dates too).
However, the target for 2024-25 season is 80%, which suggests Chelsea are over by 12-15%. For that kind of breach, the fine level is set at 25-50% of the excess for a first offence.
Rough estimate is that would be a fine of something like £18-36m. Which is more than they will earn by being in Europe in the first place.
Villa could be in even more trouble - £30-45m - they were over 100% by my last estimate.
Honestly, my figures could be a fair bit out because I've had to estimate and exclude costs for the general staff base, but the trend is likely to be there or thereabouts.
Like I say, presented with those kinds of numbers, I think UEFA will bottle it.
And just to add, if Chelsea are having to pump in £270m of share capital to keep the company solvent, there's no way they aren't burning shit-loads in wages and amortisation which will put their football costs ratio up the creek. Just because some people have suggested that their strategy was all about paying low wages to all these players they've been signing - I just don't see that at all.
However, the target for 2024-25 season is 80%, which suggests Chelsea are over by 12-15%. For that kind of breach, the fine level is set at 25-50% of the excess for a first offence.
Rough estimate is that would be a fine of something like £18-36m. Which is more than they will earn by being in Europe in the first place.
Villa could be in even more trouble - £30-45m - they were over 100% by my last estimate.
Honestly, my figures could be a fair bit out because I've had to estimate and exclude costs for the general staff base, but the trend is likely to be there or thereabouts.
Like I say, presented with those kinds of numbers, I think UEFA will bottle it.
And just to add, if Chelsea are having to pump in £270m of share capital to keep the company solvent, there's no way they aren't burning shit-loads in wages and amortisation which will put their football costs ratio up the creek. Just because some people have suggested that their strategy was all about paying low wages to all these players they've been signing - I just don't see that at all.
Needs to swap to Cheesy’s. Although to be fair, £4.5m/year to warm the bench most weeks is more than adequate!
he’s due his hendo contract, the one where he gets more than he should because he’s a good influence with a lot of experience. unfortunately for him i don’t think we’re as generous these days
Our base salary is more than he could expect at a lot of clubs, especially Celtic. It’s up to him whether he would take such a cut with limited game time but still get some silverwear along the way. It’s all hypothetical as I have no idea on what our actual plan is for him.
it’ll be stats driven i’m sure and no kloppo to fight his corner but i’m sure he’d like to stay
Yeah can see it already - Jude gets Trent - Trent then gets Arne for RM
Regular posters will know I'm always wary of these salary lists on the internet.
So for context, the last salary figures per published club accounts (i.e. May / June 2023) were:
LFC £373m
Chelsea £404m
Man City £354m (this excludes the in-house functions they transferred out which add another £15m)
Man Utd £331m
Arsenal £225m
This includes staff, and for those clubs that do retail, catering etc. in-house those numbers will be higher. On average you can expect that 80-85% of the accounts figure will be players and coaching staff. These figures will also include bonuses, player share of agent fees etc.
That Chelsea's numbers were the highest when they were still spending should tell you that they will still be top of the pile now.
So for context, the last salary figures per published club accounts (i.e. May / June 2023) were:
LFC £373m
Chelsea £404m
Man City £354m (this excludes the in-house functions they transferred out which add another £15m)
Man Utd £331m
Arsenal £225m
This includes staff, and for those clubs that do retail, catering etc. in-house those numbers will be higher. On average you can expect that 80-85% of the accounts figure will be players and coaching staff. These figures will also include bonuses, player share of agent fees etc.
That Chelsea's numbers were the highest when they were still spending should tell you that they will still be top of the pile now.
£404m has to be near 100% turnover.
Nope. Turnover was £543m - 74%.
How the hell is Arsenal's wage bill so much lower than the others?
What was our %?
Everything is cheaper in Laaaandan
