The Money Pot

[UHDrive]

Bedtime reading re lcfc spending

 

"There has been much talk in the media both locally and nationally regarding Everton’s ability or willingness to acquire new players during this January window.

Marcel Brands commented at the Annual General Meeting on the unlikelihood of doing business in the January window and, in his most recent pre-match press conference, Marco Silva was quoted as saying:

“We don’t have the financial conditions to go into the market at the moment, I have to find different solutions. We will only be using the market if we sell one of our players, but that doesn’t mean I am looking to sell to raise funds.”

It has been suggested the financial conditions referred to by Brands and Silva related to what is commonly called “financial fair play” (FFP). In the strictest sense, Everton as non-participants in European competitions this year are not under the jurisdiction of UEFA’s FFP regulations but, if we are to qualify next season, our financial performance this year would be relevant once more. However, we do obviously fall under the Premier League’s own financial regulations namely Short Term Cost Control and Profit & Sustainability rules.

Short Term Cost Control (STCC) was designed to hold back the increase in player wages, and Profitability and Sustainability rules providing a cap on the maximum losses permitted by a Premier League Club.

Short Term Cost Control;

The current STCC rules have been in place for 3 years and expire at the end of this season. From the Premier League Handbook, Rules E.18, E.19 and E.20 cover STCC. Essentially they permit clubs to increase wages year on year by a maximum of £7 million p.a. covering the three seasons 2016-17 through to 2018-19. There is however scope to increase wages using “club own revenue uplift”

Club own revenue uplift (CORU) includes all increases in revenues other than broadcasting revenue, so includes match day, commercial/sponsorship and importantly the average player trading profits over a rolling 3-year period.

As is clear from the accounts wage growth at Everton has been enormous in the time since Moshiri acquired his initial 49.9% shareholding. However, the question that needs answering is whether the STCC regulations would permit our wage bill to grow from last year’s £145.5 million.

In order to grow, we would have to see growth in non-broadcasting income and/or use player trading profits to justify increase over £7 million.

It is difficult to see any scenario where the non-broadcasting income for 2018-19 will be greater than the previous year. Therefore there will be no “contribution” from this source.

If we look at player trading, we have to take the average of the last three years including the current year 2018-19. The two preceding years have seen huge trading profits, £51.9 million (2016-17) and £87.8 million (2017-18). Trading activity has not concluded for 2018-19 but, based on the selling of Klaassen and Funes Mori in the summer we will show a small trading loss of around £2 million.

Therefore the average for the three years is approximately £46 million (assuming we sell no-one in this window).

Thus under STCC rules, theoretically Everton could increase wages this year by another £53 million in 2018-19 and still be compliant. Clearly, as you will see when looking at our projected profit and loss account for this year, we will not be doing this. The objective is to lower the wage bill following the enormous and wasteful increase in previous years, but this calculation demonstrates that STCC is not a barrier to wage growth!!"

 

Just an example. Many mitigating factors between clubs but I like to think it highlights my point that money IS there if required. Even £100-150 million. I've looked extensively at wolves and I think they'll be in serious trouble after this season.

[KingsX]

3 hours ago, Kopic said:

 

 

3 hours ago, ajthefox said:

Nice touch of irony there making Corbyn look like an Orthodox Jew..

 

It's just Richard Thompson.

 

Shaking that money tree by putting on his 99th birthday tour or thereabouts.

 

[Sly]

People need to stop with the silly myth, hyped up by Sky, that spending money, makes you a better team.

 

Spending money, acquires players. They may be woeful.

 

Tottenham, in fairness, has proved this point. All the hype now, around that they’ll have to spend, for the rest to stay is silly.

[CosbehFox]

Worth mentioning on the wage bill. We dont know how much of that is players no longer at the club or even staff. Given the wages we handed out to likes of Benalouane, we’d still be paying him the difference between his wage here and his Forest wage. 

[knitro]

I'm just hear for the asinine media synonyms of 'war chest' and 'kitty'.

[Sly]

Would that report have featured last Years outgoings? He’d have been one of our highest earners. 

 

https://www.transfermarkt.co.uk/leicester-city/transfers/verein/1003

 

Based on transfer value, we’ve spent £16,000,000 after comings / goings. 

 

Id like to think, looking at that list, we’d reduced the wage bill, after it had been inflated from the Champions League season. 

 

 

 

[Ric Flair]

51 minutes ago, Sly said:

Would that report have featured last Years outgoings? He’d have been one of our highest earners. 

 

https://www.transfermarkt.co.uk/leicester-city/transfers/verein/1003

 

Based on transfer value, we’ve spent £16,000,000 after comings / goings. 

 

Id like to think, looking at that list, we’d reduced the wage bill, after it had been inflated from the Champions League season. 

 

 

 

I still cannot believe we spent £25m on Ward and Ghezzal, it's actions like that that does make me think there's a distinct possibility we will throw money around this summer. There's also a distinct possibility we don't know what the fcuk we're doing.

[Sol thewall Bamba]

2 hours ago, Sly said:

People need to stop with the silly myth, hyped up by Sky, that spending money, makes you a better team.

Correct. Hamza and Barnes are the two players that I'm most excited to see more of next season. 

[Babylon]

8 hours ago, UHDrive said:

Just an example. Many mitigating factors between clubs but I like to think it highlights my point that money IS there if required. Even £100-150 million. I've looked extensively at wolves and I think they'll be in serious trouble after this season.

It's only there if someone puts it there, if we really wanted to spend you can find ways and means of pumping cash in one way or another (hello Man City). But the point is, at no point since  promotion have we done so. We constantly talk about a sustainable model and having to put in huge cash injections is not that. £100m is chump change in terms of being a consistent top 6 team. A couple of shit signings and it's mostly gone, the club are aware of that and their sustainable mode is more likely to be us investing in youth, building them up, selling the odd when and then reinvesting that in more young players.

[Wortho]

Nobody knows.

[Rusko187]

12 hours ago, SecretPro said:

A lot of talk on here about what we have/have not to spend.

 

Here is a thread for this to be discussed, debated, ITK's to post FACTS and others to post news, interviews, articles speculating on our transfer budget.

 

So, whadya know?

The problem you have here is usually when an ITK posts info and it doesn't come to fruition the mob essentially drive them off with heckles and abuse, so perhaps they are thinking what's the point.

 

However, an educated guess is unless we can increase our commercial revenue than we're currently running to the limits of our wage bill in terms of FFP. If we want to sign any big name players then we either have to offload high earners or just not bother at all.

[JJS84]

surprisingly, the full, unabridged company accounts are available on companies house for those that want to have a look. they aren't a great read, but will give a better idea of total squad salary, income, profit/loss etc. its only up to year ending 2018, and given the submission date, i wouldn't expect to see this years until march next year.

[gerrytaggart]

[Babylon]

1 hour ago, Wortho said:

Nobody knows.

... the trouble I've seen.

[Monsell1976]

If we really did have the £200 million reported in some news outlet, I don’t think our owners are that stupid to make it common knowledge, as all that achieve’s is the selling club ramps up their price’s.

 

 Depends on wether maguire goes, can’t see us spending more than 80 mill.

 For me getting the wasted money of the books with James and king and the likes, take a short term hit and terminate their contracts 

[Babylon]

6 minutes ago, Monsell1976 said:

 For me getting the wasted money of the books with James and king and the likes, take a short term hit and terminate their contracts 

Not sure that does any good, might as well keep the asset if you are going to have to pay them anyway. 

[Monsell1976]

8 hours ago, Babylon said:

Not sure that does any good, might as well keep the asset if you are going to have to pay them anyway. 

 Don’t see a few as assets, about championship level for king, James has stole a living, feel for the lad but time to hang up his boots.

 

 As far as I’m aware, might be wrong, but the two parties come to an agreement, not full contract cost, but that gives them a chance to find a club, and not have to demand high wages, which is what will stop us selling them, who in their right mind would pay king and James 50 grand a week or whatever they are on, and a fee even if it is nominal.

 

 We are buying wingers, gray isn’t good enough or developing, but will get a fee, but we will get better players, he’s not going to get a look in, why have ££££££ not even in the matchday sqaud, as Barnes is twice the player and will improve, and Rodgers has said we have wingers that are the same, and wants to add different style wingers.

 

 The list goes on, we have far to many players who have been brought in the terrible transfer period who are a drain on our finances, and could prevent us signing better players, and the possibility of players not playing and upsetting the camp.

 

I honestly believe we are in exciting times under Rodgers, but we need a massive clear out of poor, deadwood players, so he can get in his own players and still adhere to ffp, because our wage bill is shocking for the standard of our current squad.

Edited 21 May 2019 by Monsell1976

[coolhandfox]

9 hours ago, Monsell1976 said:

If we really did have the £200 million reported in some news outlet, I don’t think our owners are that stupid to make it common knowledge, as all that achieve’s is the selling club ramps up their price’s.

 

 Depends on wether maguire goes, can’t see us spending more than 80 mill.

 For me getting the wasted money of the books with James and king and the likes, take a short term hit and terminate their contracts 

The club isn't going to pay up James or King contracts, there is no benefit to paying in one go what you can spread over a number of years.

[Chrysalis]

23 hours ago, KingsX said:

For me the best single source is Swiss Ramble.  New threads each year as PL clubs post their accounts.  Latest for LCFC can be found at:

 

- We are extremely dependent on broadcast revenue.  Gates and KP and other sponsorship are at small club levels.

 

- Net spend is shown in the following chart.  It has risen but stayed reasonable.  Player salaries and transfer amortization have soared.  Wages at 75% of turnover is unsustainable, and may limit our ambitions.

 

 

- The club has been profitable after tax four years running.  My guess: FFP will not be the limitation in this window.  The wage bill will.

 

sadly your images are broken, can you fix, thanks

 

I have a comment regarding TV money.

 

I think sky/BT money has peaked I will be surprised if it grows with future contracts.

International TV money I think has not peaked but the problem is it now is based on league position instead of a fixed share so less predictable and can be lower if we finish too far down the table.

Edited 21 May 2019 by Chrysalis

[Monsell1976]

12 hours ago, coolhandfox said:

The club isn't going to pay up James or King contracts, there is no benefit to paying in one go what you can spread over a number of years.

 These two frustrate me more than any other at the club, payed massive wages for nothing but turning up for training, or in James case treatment.

 

It’s annoying as these two will not feature under Rodgers, their wages combined could pay for a decent players wages.

 

 As I said previously, who ever sorts the contracts out wants sacking, James didn’t play for 2 years and given a new contract and has been pretty much injured since, our wage bill for the standard of the squad is nothing short of a disgrace.

[coolhandfox]

2 hours ago, Monsell1976 said:

 These two frustrate me more than any other at the club, payed massive wages for nothing but turning up for training, or in James case treatment.

 

It’s annoying as these two will not feature under Rodgers, their wages combined could pay for a decent players wages.

 

 As I said previously, who ever sorts the contracts out wants sacking, James didn’t play for 2 years and given a new contract and has been pretty much injured since, our wage bill for the standard of the squad is nothing short of a disgrace.

I agree, the club made a few strange decisions following the title win both in the transfer market and with regards to new contracts.

 

However I think they have got there act together with regards to moving on dead wood, we have seen Iborra, Simpson, Okizaki, Musa, depart. I imagine we are going to struggle to move on people like Slim and King, but I think they will use the loan market to remove some of the burden of the wage bill.

[North Leeds Fox]

Anyone know whether signing on fees affect the wages for FFP purposes? If we don't have much money to spend, lot of decent players available on a free that could make our squad better (brahimi, milner, mata, sturridge off top of my head) but these transfers can be expensive with huge signing fees. 

[Bluearmyfox28]

1 hour ago, North Leeds Fox said:

Anyone know whether signing on fees affect the wages for FFP purposes? If we don't have much money to spend, lot of decent players available on a free that could make our squad better (brahimi, milner, mata, sturridge off top of my head) but these transfers can be expensive with huge signing fees. 

Usually comes out of the transfer budget not the wages.

[North Leeds Fox]

1 hour ago, Bluearmyfox28 said:

Usually comes out of the transfer budget not the wages.

Cheers pal. Interesting to see if we target any free agents during the summer. 

[Bluearmyfox28]

13 hours ago, North Leeds Fox said:

Cheers pal. Interesting to see if we target any free agents during the summer. 

I think we will see one personally just to accommodate other spending. Likely to be Sturridge or a back up right back I would imagine.