Finances

[RadioactiveWaste]

Well probably account the full fee for Lowe and Bogle coming in, but only the first payment on incoming players as going out....

[td_evans]

I thought the way FFP works is that there is a book value of Bogle/Lowe at close to £0 as they are academy players, so booked as a full £10/15m profit.

If we purchase any players, they'll have a residual value assigned so even if we spent £6m on a single player, in this years accounts that won't show as a £6m loss. That'll then be amortised over the length of their contract.

[cheron85]

29 minutes ago, desirelines said:

Anyone else sceptical that we're going spend the money raised from the Bogle-Lowe deal? If rumours about last years financial report are true and we're about to post losses of £30m during the Lampard season, then I can't see us spending that £10-15m from Sheff Utd. 

Cocu stated that he was confident that signings were coming in - Whether we spend all the money or some of the money or none of the money the important thing is that Cocu is getting to bring in new players that he wants - If he can land the talent he wants on a free then happy days - If he can get them for £5m and we close some of our FFP gap then happy days - If he needs to keep digging into the money we make to make signings then so be it

[Gritty]

8 minutes ago, td_evans said:

I thought the way FFP works is that there is a book value of Bogle/Lowe at close to £0 as they are academy players, so booked as a full £10/15m profit.

If we purchase any players, they'll have a residual value assigned so even if we spent £6m on a single player, in this years accounts that won't show as a £6m loss. That'll then be amortised over the length of their contract.

Think we've now agreed to amortise like everyone else. 

[Tamworthram]

3 minutes ago, Gritty said:

Think we've now agreed to amortise like everyone else. 

Where have you heard that?

[td_evans]

3 minutes ago, Gritty said:

Think we've now agreed to amortise like everyone else. 

Well if that's the case it's still amortised over the length of the contract, just linearly. 

[nottingram]

36 minutes ago, desirelines said:

Anyone else sceptical that we're going spend the money raised from the Bogle-Lowe deal? If rumours about last years financial report are true and we're about to post losses of £30m during the Lampard season, then I can't see us spending that £10-15m from Sheff Utd. 

Depends entirely on the cash position, I think. 

As I understand it, purchasing a player doesn’t massively affect P&S immediately, because the asset lost (cash) is replaced by an asset gained in the form of a player, thus no change in profit, but you have lost cash. The players sold have little to no book value so their sale does affect profit (you have lost an asset worth ~nothing but gained assets in cash to the tune of £15m.

So it all depends on whether Mel chooses to invest the cash gained from this sale in to new players or whether he chooses to service the wage bill for a year or so with it. My suspicion is that all £15m or thereabouts won’t be invested in players but that some indeed will be, and that is fine by me. 

(all of the above assumes transfers paid up front, probably not the case either inwards or outwards).

[TheresOnlyWanChope]

17 hours ago, Paul71 said:

Its interesting that there seems to be a 100% positive view of Pickerings time in charge of Derby.

Yes of course we got PP and played our only 'decent' spell in the PL. But even back in the PL despite the first good 3 seasons the second 3 were at times awful and we seemed to be always in a relegation battle.

You cannot argue with Pickerings passion and desire to put Derby at the top, but we were certainly guilty of chasing the PL dream in those last 3 seasons, especially the last with some absolutely shocking signings and decisions.

As this is a Finances thread for me i dont see how there can be any argument the end of Pickerings reign left us in an absolute dire position, you dont put the club into liquidation and panic sell for £3 to people who cleary had no plan to take Derby forward unless the club was totally on its arse, we are not even close to that today.

So while todays issues, if we have them, is not Lionels fault by any stretch, hes certainly responsible for leaving the club as he did and bringing in the 3 amigos.

Today is a different landscape totally, we arent being held back due to lack of funds available, its the shackles the EFL have imposed on us and other clubs with FFP/P&S. Lets face it if FFP/P&S had existed in Lionels day we would probably have been facing all sorts of sanctions after Arthur failed to spend Lionels money wisely and built an expensive flop of a team.

I dont intend to speak Ill, we had some great times and i will always look back on the promotion season and first 3 seasons in the PL with great fondness...

It may have not been Lionel’s decision to make those decisions, he may have only signed off on transfers, supporting Jim Smith and his team. We seemed to go downhill when McClaren left and were replacing players like C Powell with Schnoor or Wanchope with Beck etc. 
I remember Lionel financing a lot of money around 2000 when we looked doomed and we bought Burley, Strupar and Kinkladze and spent almost £10mil. He seemed to always support his managers financially, we seemed to make poorer signings after this time compared with the mid/ late 90s. 

[Ambitious]

15 minutes ago, Gritty said:

Think we've now agreed to amortise like everyone else. 

We haven't - we've argued our method isn't illegal and it's been signed off. 

We will still continue to amortise as we have been doing since 2015, I believe. They've definitely said nothing to contradict that. 

[UTFR]

32 minutes ago, Gritty said:

Think we've now agreed to amortise like everyone else. 

I'd imagine its more likely that some clubs will now switch to a method similar to ours.

[CornwallRam]

26 minutes ago, Ambitious said:

We haven't - we've argued our method isn't illegal and it's been signed off. 

We will still continue to amortise as we have been doing since 2015, I believe. They've definitely said nothing to contradict that. 

I'm pretty sure that some of the coverage mentioned that we've since reverted to straight line amortisation. Whether the coverage was correct is open to question, but I'm 99% sure it was announced that we've switched back.

[Ghost of Clough]

1 hour ago, CornwallRam said:

I'm pretty sure that some of the coverage mentioned that we've since reverted to straight line amortisation. Whether the coverage was correct is open to question, but I'm 99% sure it was announced that we've switched back.

There was some wording in the Decision document which could be interpreted a couple of ways:

1. Either stating they were looking at amortisation over a period in isolation (up to 2018), or
2. We changed amortisation policy in 2018.

I still think it's option 1, and i'll try to dig up the section in the document (unless someone beats me to it)

[Van der MoodHoover]

2 hours ago, td_evans said:

I thought the way FFP works is that there is a book value of Bogle/Lowe at close to £0 as they are academy players, so booked as a full £10/15m profit.

If we purchase any players, they'll have a residual value assigned so even if we spent £6m on a single player, in this years accounts that won't show as a £6m loss. That'll then be amortised over the length of their contract.

Spot on - it's a question of faith in our recruitment and then coaching.

If Mel believed his recruitment team were about to spaff £15m on a few Anyas whose value would be written off to 0 with no fees then he'd surely be forgiven for keeping the cash for himself.

[europia]

7 hours ago, Van der MoodHoover said:

Spot on - it's a question of faith in our recruitment and then coaching.

If Mel believed his recruitment team were about to spaff £15m on a few Anyas whose value would be written off to 0 with no fees then he'd surely be forgiven for keeping the cash for himself.

It's certainly about time the recruitment team earned their keep and spent the clubs (Mr Morris's) money wisely on some decent players, capable of performing consistently in the ch'ship. 

[Rev]

Maybe Mel would let the recruitment team who've just bought in a £10m profit on Bogle pick his replacement?

[SamUltraRam]

In the Brentford game on Sunday, the commentator described their transfer model

Find clubs in Europe who are overperforming in their league and then find the players in those teams who are overperforming

[Ghost of Clough]

On 07/09/2020 at 11:07, CornwallRam said:

I'm pretty sure that some of the coverage mentioned that we've since reverted to straight line amortisation. Whether the coverage was correct is open to question, but I'm 99% sure it was announced that we've switched back.

 

23 hours ago, Ghost of Clough said:

There was some wording in the Decision document which could be interpreted a couple of ways:

1. Either stating they were looking at amortisation over a period in isolation (up to 2018), or
2. We changed amortisation policy in 2018.

I still think it's option 1, and i'll try to dig up the section in the document (unless someone beats me to it)

I think it was this bit...

"Following those discussions the Club decided to adopt a different approach to amortisation of the capitalised cost of player registrations. That ‘different approach’ – which we consider in greater detail below – was implemented by the Club in each of the financial years to which the Second Charge relates, namely the financial years ended 30 June 2016, 30 June 2017 and 30 June 2018."

Someone interpreted it as us using the residual method for those 3 periods, before changing to straight-line for 2019. To me, it's just specifying the relevant 3 years for the P&S charge.

[RandomAccessMemory]

31 minutes ago, Ghost of Clough said:

 

I think it was this bit...

"Following those discussions the Club decided to adopt a different approach to amortisation of the capitalised cost of player registrations. That ‘different approach’ – which we consider in greater detail below – was implemented by the Club in each of the financial years to which the Second Charge relates, namely the financial years ended 30 June 2016, 30 June 2017 and 30 June 2018."

Someone interpreted it as us using the residual method for those 3 periods, before changing to straight-line for 2019. To me, it's just specifying the relevant 3 years for the P&S charge.

That might be me, I'm still not sure which one it's suggesting, it's really not clear.

There was also this tweet from Ryan Conway and I wasn't sure whether he'd got that information from a source, or whether he'd also read the report and came to the conclusion from the wording.

 

[Ghost of Clough]

30 minutes ago, RandomAccessMemory said:

That might be me, I'm still not sure which one it's suggesting, it's really not clear.

There was also this tweet from Ryan Conway and I wasn't sure whether he'd got that information from a source, or whether he'd also read the report and came to the conclusion from the wording.

 

I think that's Ryan's interpretation of the same passage. We should find out when the accounts are eventually released. 

[Longeatonram2020]

Feel like we're in a similar situation to when Clough came in. Difference being we actually have some valuable assets and no massive wage bill taken up by deadwood.