Finances

[Will Hughes Hair]

15 minutes ago, Carnero said:

How would they have known the amortisation charge for the year ended 30 June 2020 was £25m when the dialogue took place in April & May 2019?

Beat me to it.  No surprises that the EFL didn't know what day of the week (or which season) it was.

[Will Hughes Hair]

Next question...

In our first PS1 submission for 2017/18 we declared the loss After Earnings Before Tax in 2016 (T-2) to be 9.0m.  A couple of months later we revised the submission and that figure became a 15.3m loss.  How's that possible?

(page 32 and page 38 if it helps)

[RamNut]

1 minute ago, Will Hughes Hair said:

Next question...

In our first PS1 submission for 2017/18 we declared the loss After Earnings Before Tax in 2016 (T-2) to be 9.0m.  A couple of months later we revised the submission and that figure became a 15.3m loss.  How's that possible?

(page 32 and page 38 if it helps)

Adding up wrong?

[Ghost of Clough]

2 minutes ago, Will Hughes Hair said:

Next question...

In our first PS1 submission for 2017/18 we declared the loss After Earnings Before Tax in 2016 (T-2) to be 9.0m.  A couple of months later we revised the submission and that figure became a 15.3m loss.  How's that possible?

(page 32 and page 38 if it helps)

Change of rules from FFP to P&S with different inclusions/exclusions. 

[Will Hughes Hair]

I've also noted the Profit / Loss After Earnings Before Tax can vary widely between PS1 submissions.  That for 2018 figure was at various times 24.0m, (6.7m)*, 0.3m and (7.2m).  Even in 2017 (when there was no stadium sale muddying waters) it went from 4.7m to 13.9m to 13.4m.

I'm going to guess the 31.5m could alter too.

So in short lets not panic.

[U.M.]

Sorry if this has been covered already, but I'm a bit(?) confused about what happens to the surplus on the stadium sale.

(long question)

If we ignore 'allowable losses' for this example (easier for me to explain my question). Imagine we are a perfectly run club, making exactly £0 every year - break-even, as allowed.

In year x1 we make a £30m profit (winning the Champions league/selling a Youth player/selling the ground).

Year x2 we spend half of the gain (£15m - bonuses/loan fees etc.) creating a loss.

Year x3 we spend the rest of the gains (£15m) - another loss.

Our ffp for x1, x2 & x3 is nill (+30 -15 -15) : perfect.

Year x4 we are back to breaking even.

Our ffp for x2, x3 & x4 is a loss of £30m (-15 -15 +0). oops.

 

The question : how is this right, if all we have done is spend our (legally) acquired profits?

 

Doesn't the gain in x1 offset future losses, i.e. remove £30m of future spending ? 

[Ghost of Clough]

2 minutes ago, U.M. said:

Sorry if this has been covered already, but I'm a bit(?) confused about what happens to the surplus on the stadium sale.

(long question)

If we ignore 'allowable losses' for this example (easier for me to explain my question). Imagine we are a perfectly run club, making exactly £0 every year - break-even, as allowed.

In year x1 we make a £30m profit (winning the Champions league/selling a Youth player/selling the ground).

Year x2 we spend half of the gain (£15m - bonuses/loan fees etc.) creating a loss.

Year x3 we spend the rest of the gains (£15m) - another loss.

Our ffp for x1, x2 & x3 is nill (+30 -15 -15) : perfect.

Year x4 we are back to breaking even.

Our ffp for x2, x3 & x4 is a loss of £30m (-15 -15 +0). oops.

 

The question : how is this right, if all we have done is spend our (legally) acquired profits?

 

Doesn't the gain in x1 offset future losses, i.e. remove £30m of future spending ? 

Despite having a net spend of £0, you’ve just earned yourself a 12 point penalty. 

[SamUltraRam]

Maybe the number crunchers amongst you can work out from the following buys/sales since Mel Morris took over, how can this add up to such serious amortization figures ??

**Don't get me on some of the figures being wrong - I did my best - & i've probably missed one or two

Significant transfer activity since 2014/15 :-

 

 

[Barney1991]

Won't this loan go in as money into the club aswell maybe we have done it to counteract the losses again 

[Ghost of Clough]

10 minutes ago, SamUltraRam said:

Maybe the number crunchers amongst you can work out from the following buys/sales since Mel Morris took over, how can this add up to such serious amortization figures ??

**Don't get me on some of the figures being wrong - I did my best - & i've probably missed one or two

Significant transfer activity since 2014/15 :-

 

 

Player sales don’t fall under the amortisation bracket. In fact, any player we sold for a fee probably didn’t have much amortisation under their name. For example, Vydra bought for £8m probably only had a few £100k amortisation. When sold for £11m, that would go down under a separate bracket (profit on disposal of players) of just over £3m. 

Assuming the majority of a player’s fee (and associated costs) are amortised in the final year, add up Johnson, Butterfield, Blackman, Thorne, Anya (impaired) and we’re fast approaching £25m.

[SamUltraRam]

7 minutes ago, Ghost of Clough said:

Player sales don’t fall under the amortisation bracket. In fact, any player we sold for a fee probably didn’t have much amortisation under their name. For example, Vydra bought for £8m probably only had a few £100k amortisation. When sold for £11m, that would go down under a separate bracket (profit on disposal of players) of just over £3m. 

Assuming the majority of a player’s fee (and associated costs) are amortised in the final year, add up Johnson, Butterfield, Blackman, Thorne, Anya (impaired) and we’re fast approaching £25m.

Blimey, confusing for me !!!

So sales mainly just help in the general profit & loss side of accounting ?? along with wages paid out & income/revenue received from other sources

[Gisby]

[Carnero]

3 hours ago, Will Hughes Hair said:

Next question...

In our first PS1 submission for 2017/18 we declared the loss After Earnings Before Tax in 2016 (T-2) to be 9.0m.  A couple of months later we revised the submission and that figure became a 15.3m loss.  How's that possible?

(page 32 and page 38 if it helps)

We forgot to us the add on the other fag packet.

[Carnero]

1 hour ago, SamUltraRam said:

Blimey, confusing for me !!!

So sales mainly just help in the general profit & loss side of accounting ?? along with wages paid out & income/revenue received from other sources

Of course if you sell an academy product or a cheapo signing for a large fee, it's basically all profit.

E.g. Hendrick 

[cannable]

3 hours ago, SamUltraRam said:

Maybe the number crunchers amongst you can work out from the following buys/sales since Mel Morris took over, how can this add up to such serious amortization figures ??

**Don't get me on some of the figures being wrong - I did my best - & i've probably missed one or two

Significant transfer activity since 2014/15 :-

 

 

Warnock was free, Carson was minimal, Olsson was only 500k, Butterfield and Johnson were a million more each, Lawrence was only 5m with all clauses activated, we sold Jerome for what we bought him for, Lampard was five million 

 

Christ all of that was off the top of my head, I need some Fanny 

[Van der MoodHoover]

So when you buy a player - let's say Bielik, the package is announced as 10m, which is really say 4m up front then a load of contingent payments. 

In that scenario, is the day 1 value of the player for amortisation the 10m  or the day 1 cost,  I assume it has to be the latter?

[G STAR RAM]

3 minutes ago, Van der MoodHoover said:

So when you buy a player - let's say Bielik, the package is announced as 10m, which is really say 4m up front then a load of contingent payments. 

In that scenario, is the day 1 value of the player for amortisation the 10m  or the day 1 cost,  I assume it has to be the latter?

Day 1 cost. You wouldnt amortise something that is not on your balance sheet.

[Ghost of Clough]

1 minute ago, Van der MoodHoover said:

So when you buy a player - let's say Bielik, the package is announced as 10m, which is really say 4m up front then a load of contingent payments. 

In that scenario, is the day 1 value of the player for amortisation the 10m  or the day 1 cost,  I assume it has to be the latter?

Depends on the structure of the deal. Initial book value will be the guaranteed fee.

Scenario 1: £4m upfront, £3m after 100 games, £3m after promotion. Initial book value = £4m

Scenario 2: £4m upfront, £3m in instalments over 4 years, £3m on promotion. Initial book value = £7m

[europia]

Football was once the peoples game, but the action on the field is playing second fiddle to clubs finances. It's no secret that accountancy is the most dull and boring profession, pity if it ends up taking football in that direction.....

[G STAR RAM]

12 hours ago, europia said:

Football was once the peoples game, but the action on the field is playing second fiddle to clubs finances. It's no secret that accountancy is the most dull and boring profession, pity if it ends up taking football in that direction.....

Let's be honest, what happens on the field plays second fiddle to what is on peoples mobile phone in many cases these days.

It certainly isnt finances that is changing football beyond recognition.