Roger Red Hat Posted August 15, 2023 Report Share Posted August 15, 2023 I see Chelsea are signing yet another player, anyone know how they manage this? Quote Link to comment Share on other sites More sharing options...
Lrrr Posted August 15, 2023 Report Share Posted August 15, 2023 I'm guessing length of contract to divide the fees by and then how much they've raised by selling players this summer as it'll go in the next accounts vs 1 years worth of buying players value 1 Quote Link to comment Share on other sites More sharing options...
pl00peh91 Posted August 15, 2023 Report Share Posted August 15, 2023 Signing players on 8 year contracts will do that for you, so much so that the rules are being changed to only allow teams to spread the amortisation cost over 5 years to close the “loophole” being exploited by Chelsea. It’s risky though because if a player suffers long term injury issues or just isn’t as good as they thought they’re lumbered with the player on a lengthy contract which may make the player difficult to sell 1 Quote Link to comment Share on other sites More sharing options...
Simon bristol Posted August 15, 2023 Report Share Posted August 15, 2023 7 minutes ago, pl00peh91 said: Signing players on 8 year contracts will do that for you, so much so that the rules are being changed to only allow teams to spread the amortisation cost over 5 years to close the “loophole” being exploited by Chelsea. It’s risky though because if a player suffers long term injury issues or just isn’t as good as they thought they’re lumbered with the player on a lengthy contract which may make the player difficult to sell Yep, simon jordan was discussing this on talksport the other day.. and i think in theory all the sales made are all accounted for when the deal is announced, so in the short term they are actually in a good position?! Quote Link to comment Share on other sites More sharing options...
awbb Posted August 15, 2023 Report Share Posted August 15, 2023 15 minutes ago, pl00peh91 said: It’s risky though because if a player suffers long term injury issues or just isn’t as good as they thought they’re lumbered with the player on a lengthy contract which may make the player difficult to sell Saudi to the rescue! Again! Quote Link to comment Share on other sites More sharing options...
chinapig Posted August 15, 2023 Report Share Posted August 15, 2023 8 minutes ago, Simon bristol said: Yep, simon jordan was discussing this on talksport the other day.. and i think in theory all the sales made are all accounted for when the deal is announced, so in the short term they are actually in a good position?! Yes, the money from sales is booked to the current accounting period while the cost of fees is spread over the period of the contract. Though their wage bill may increase of course. 2 Quote Link to comment Share on other sites More sharing options...
downendcity Posted August 15, 2023 Report Share Posted August 15, 2023 I heard/read the other day that the new owner has spent £800m+ in the last year. He's spent over £200m on players and manager from Brighton alone!!! Quote Link to comment Share on other sites More sharing options...
Sir Geoff Posted August 15, 2023 Report Share Posted August 15, 2023 They've also sold gazillion players recently so net spend isn't actually that much. Quote Link to comment Share on other sites More sharing options...
pl00peh91 Posted August 15, 2023 Report Share Posted August 15, 2023 30 minutes ago, awbb said: Saudi to the rescue! Again! It would be Chelsea equivalent of being stuck with Gustav Engvall until 2031 with the option to extend until 2032….. 1 Quote Link to comment Share on other sites More sharing options...
Admin phantom Posted August 15, 2023 Admin Report Share Posted August 15, 2023 30 minutes ago, awbb said: Saudi to the rescue! Again! Surprisingly it's not like that, just a very clever way of how they work their contracts Quote Link to comment Share on other sites More sharing options...
Engvall’s Splinter Posted August 15, 2023 Report Share Posted August 15, 2023 4 minutes ago, Porto Red said: Shit. I'm so sorry, I didn't even realise I'd posted this here. Yeah no I mean I'm not oh but I've been this not ok for several decades now so I guess I'll be ok. Didn't mean to alarm anyone. I took an awful lot of drugs as a kid so at least I can be used as a cautionary tale. I've embarrassed myself enough now I suppose Nothing to be embarrassed about fella. Hope you are okay. Quote Link to comment Share on other sites More sharing options...
Admin phantom Posted August 15, 2023 Admin Report Share Posted August 15, 2023 1 hour ago, Roger Red Hat said: I see Chelsea are signing yet another player, anyone know how they manage this? Explained very well here Quote Link to comment Share on other sites More sharing options...
James54De Posted August 15, 2023 Report Share Posted August 15, 2023 1 minute ago, phantom said: Surprisingly it's not like that, just a very clever way of how they work their contracts Sort of. There is however a potentially dodgy link between Saudi and Chelsea. The sales of Chelsea players to Saudi may have been hugely over valued. This would of course help massively with FFP. Quote Link to comment Share on other sites More sharing options...
Admin phantom Posted August 15, 2023 Admin Report Share Posted August 15, 2023 3 minutes ago, James54De said: Sort of. There is however a potentially dodgy link between Saudi and Chelsea. The sales of Chelsea players to Saudi may have been hugely over valued. This would of course help massively with FFP. Fair point, but there's an ever increasing long list of very dubious deals heading that way Quote Link to comment Share on other sites More sharing options...
Fammyfan Posted August 15, 2023 Report Share Posted August 15, 2023 With the inflation in football, it would be a smart move providing the signings are sensible but most of the players that they've brought in have been quite disappointing, can see them struggling to find £135m a season Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 15, 2023 Report Share Posted August 15, 2023 (edited) I listened to that with some interest but is Jordan A) Accounting for the enormous Operating Losses that already existed in 2021-22. Fees offset rather than eliminated these and that's before extra costs added minus some eliminated of course. B) Fully accounting for and I'm sure he is, the remaining Book Value of said players at time if disposal. Is all very well having a £60-65m fee (Havertz) but he still had If we use reasonable sites as a guide, 2 years of his fee to amortise which means. £60-65m- £28.8m...Profit on Disposal=£31.2-36.2m. Whereas Mount as an academy product, sold for £55m=£55m Profit. Koulibaly at £17-18m is good.. until you consider is remaining book value is £25.5m as 3 years left on deal. Gross price £17m great, profit well no actually a £7.5-8.5m loss give or take at point of disposal. Those sign in January pretty much double this year. Sadly no easy example here but.. Player signs for £50m on 2.5 year deal in January window. Amortisation in that period is £10m, £20m in each subsequent year assuming straight line obvs. Firing Tuchel, hiring then firing Potter could easily have cost £50m! The Upper Loss Limit for PL is £105m plus the usual Allowables in 3 years. Said starting point in 2021-22. Included some legal costs of £18m and impairment of £76m granted. The first could be excludable from P&S, the 2nd certainly wouldn't be! Edited August 15, 2023 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 15, 2023 Report Share Posted August 15, 2023 I'm going to try and give some best estimates for transfer profits vs new amortisation in coming days.. they've churned so much in the last 3 windows that is very difficult to keep track! 1 Quote Link to comment Share on other sites More sharing options...
BritAbroad Posted August 15, 2023 Report Share Posted August 15, 2023 I wonder how much Chelsea generate each year in loan fees? They have always seemed to loan out quite a few players in the past. 1 Quote Link to comment Share on other sites More sharing options...
JoeAman08 Posted August 16, 2023 Report Share Posted August 16, 2023 I actually wonder more about clubs like Newcastle and Villa at they don’t really have significant outgoings that I can think of. Chelsea have spent crazy but january and this summer the signings have been younger and think will help Them profit in future. Very risky though and spending now seems a necessity more than anything with how bad their summer window was last year Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 16, 2023 Report Share Posted August 16, 2023 (edited) Good listen, counter view. Talksport, Stefan Borson. Former adviser to Man City thinks they are deliberately disregarding the Premier League P&S regs in order to accelerate their development and potentially success-, thereby gambling on a low punishment. https://podcasts.apple.com/gb/podcast/var-a-greater-need-for-transparency/id1424270093?i=1000624516364 15th August, 21 mins in. No argument on 2022, maybe tight to 2023..Covid disappears from view pretty much in the period to this season. Edited August 16, 2023 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 16, 2023 Report Share Posted August 16, 2023 (edited) One thing Abramovich used to do was spend big one year, sell big another and it used to balance out in a 3 Year cycle of FFP and latterly P&S. I say big it's all bit and it is all relative but for the level etc. Significant regular sales of academy sales were also pivotal. Selling quite big is still happening but thete appears to be less of a break slam, let alone the whole missing Europe verbatim thing. The huge cost of managerial change last season will also remain a lag until 2025-26 as it won't drop off the 3 year cycle until then assuming it isn't paid over a contract. Edited August 16, 2023 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 16, 2023 Report Share Posted August 16, 2023 (edited) @JoeAman08 Aston Villa interest me a bit because in a year in which they hired Gerrard, fired Dean Smith and sold Grealish mainly in a £100m Profit on Disposal of Players- they posted a profit of under £1m. Underlying loss was approaching £100m. Would have thought the cost of firing Gerrard and hiring Emery would outstrip this for one. Their profit on disposal will not be £100m again and though I'm sure they pass the Test to 2023 and to 2024, when that Grealish profit drops off will they be able to plug thst gap. Newcastle, everything has gone pretty much right for since their takeover.. rising to 10th in Year 1 and 4th in Year 2 will have bumped up prize money a bit and they still had loads of headroom via Mike Ashley. Reaching a Cup final ie Carabao will have added a bit of revenue and profile. Some impairment probably won't be repeated. Saint-Maximin to Saudi controversial but does the value look okay verbatim is the key test. Bruce being sacked won't be repeated either as far as financial outlay goes. The £25m in short sponsor, on one hand related party- otoh is it so out of kilter with comparables? Finishing 4th brings a further significant growth in prize money and then CL revenue on top-that will see revenue rise further, they also need to get better at selling players e.g. Wood to Nottingham Forest a decent one. They're probably okay but not by a huge amount. Edited August 16, 2023 by Mr Popodopolous 1 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 17, 2023 Report Share Posted August 17, 2023 (edited) Just thinking again about Chelsea. The debate IMO, two-fold. Perhaps three-fold. If it's just- "Oh well they're signing players on 7 year deals and it isn't fair". Well it's their own risk and reward, bravery v stupidity isn't it. It is spreading the cost over longer and any accountant should know this, let alone financial directors at clubs. I appreciate the downside risk if clubs lower down the pyramid try it and that maybe an argument for regulation about it for all. The second issue is mode simple.are Chelsea even with this breaching Spending limits? There are different views on this but there is a reasonable chance they are set to. I did one very quick extrapolation albeit assuming wages fairly stable and had them perhaps £100m over this coming season as it stands albeit not done anything in detail yet. Still salvageable with the correct sales and departures, revenue will have taken a bit given no European football and finishing 12th. Edited August 17, 2023 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 17, 2023 Report Share Posted August 17, 2023 (edited) I'd also have a small look at Man United as well because they lost £149m before tax in a year that was back to full revenue or closest to pre Covid anyway. The last profitable year has dropped away, the last ie the 2 combined years for Covid has also dropped away. It now will go: -£149m 2021-22 (before the usual deductions) -/+£x 2022-23 (before the usual deductions). Remains wholly to be seen £m (before the usual deductions). PL Upper Loss Limit is £105m plus the usual deductions. Think they lost £30m before tax In the first 3 quarters of the season just gone but these things aren't always straight line. Back in CL will assist but supposedly there is some wage flex clause- could be tight? Edited August 17, 2023 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Bristol Oil Services Posted August 17, 2023 Report Share Posted August 17, 2023 Chelsea get around all this, I believe, because they have or employ the sharpest, cutest financial bods in the land (as important now as your management or recruitment). If only we had someone that knew a thing or two about money and finance and creative accounting. Oh well, we can't have it all .... Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 17, 2023 Report Share Posted August 17, 2023 What they did with the amortisation ploy was basic. Utterly basic. If there is other stuff sure but the amortisation ploy was basic. It is a standard accounting practice, all clubs do it although Derby had a slightly varied approach- ended well for them. The length is the key difference, any club could have sought to sign players on 7-8 year deals. Quote Link to comment Share on other sites More sharing options...
Monkeh Posted August 17, 2023 Report Share Posted August 17, 2023 Chelsea exploted a loophole that since has been closed, That and some.rather dogey dealings with the Saudis, Also they get hundreds of millions more in sponsorship then say Everton Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted August 17, 2023 Report Share Posted August 17, 2023 2 minutes ago, Monkeh said: Chelsea exploted a loophole that since has been closed, That and some.rather dogey dealings with the Saudis, Also they get hundreds of millions more in sponsorship then say Everton The dodgy dealing with the Saudis merit further scrutiny but the profit on Disposal is negligible. I know that saved future amortisation and wages but it was the deals for Kovacic, Havetrz and Mount with their domestic rivals that helped them a lot. Who got the better of the deal, time will tell. Is it a loophole however, any club could have done it. 1 Quote Link to comment Share on other sites More sharing options...
Rocking Red Cyril Posted August 17, 2023 Report Share Posted August 17, 2023 Lots of wonderful figures and financial reasoning explained above. But what worries me is are we allowing football to be run by accountants ? Very very worrying if we have stopped so low. Quote Link to comment Share on other sites More sharing options...
Monkeh Posted August 17, 2023 Report Share Posted August 17, 2023 28 minutes ago, Rocking Red Cyril said: Lots of wonderful figures and financial reasoning explained above. But what worries me is are we allowing football to be run by accountants ? Very very worrying if we have stopped so low. Footballs been run by accountants since theblat 90's it's not a new thing, 1 Quote Link to comment Share on other sites More sharing options...
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