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Trav Le Bleu

The Elephant In The Forum

By Trav Le Bleu, in Transfer Talk

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Trav Le Bleu

Trav Le Bleu

Posted
Posted (edited)

Maybe I'm wrong and I don't understand FFP properly, but there's a fair few people seem to think we'll be signing Tielemans plus a 30-50 million winger AND keeping all our best players, but I'm not sure that it can be done under FFP for a club our size.

 

Don't get me wrong, I'm believing we'll make the signings, but won't this mean we'll have to balance the books with at least one significant sale. Spending for JJ, Perez, Tielemans + a 30-50 million winger will be well in access of £100 million, something I never thought I'd see in my lifetime, with very little going the other way. The way I'm seeing it, we'll have to sell Maguire or Maddison or Ricky P, to satisfy the tally man.

 

Can anyone address this elephant or is it actually just a pipe dream? Personally I wouldn't be too fussed about losing Harry due to having decent cover in that area, I'd be concerned about Maddison going and devastated to lose Ricky P.

 

But maybe we will need the money? Can anyone who knows their stuff tell me I'm wrong?

 

 

Edited by Trav Le Bleu
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Fightforever

Fightforever

Posted
Posted
4 minutes ago, Trav Le Bleu said:

Maybe I'm wrong and I don't understand FFP properly, but there's a fair few people seem to think we'll be signing Tielemans plus a 30-50 million winger AND keeping all our best players, but I'm not sure that it can be done under FFP for a club our size.

 

Don't get me wrong, I'm believing we'll make the signings, but won't this mean we'll have to balance the books with at least one significant sale. Spending for JJ, Perez, Tielemans +30-50 million will be well in access of £100 million, something I never thought I'd see in my lifetime, with very little going the other way. The way I'm seeing it, we'll have to sell Maguire or Maddison or Ricky P, to satisfy the tally man.

 

Can anyone address this elephant or is it actually just a pipe dream? Personally I wouldn't be too fussed about losing Harry due to having decent cover in that area, I'd be concerned about Maddison going and devastated to lose Ricky P.

 

But maybe we will need the money? Can anyone who knows their stuff tell me I'm wrong?

 

 

Just get ucl bext year and we wont have to worry about that.:scarf:

Up the city.

 

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Finnegan

Finnegan

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Posted

I'm not in the know at all but I'd personally be amazed if we don't sell one of our major assets. 

 

For me, Benkovic and Soyuncu were signed to be long term replacements for Morgan and Maguire in what was our first piece of genuine, long term planning. We should have done it with Mahrez and we failed, with Maguire we got a couple youngsters in in advance. 

 

I can see us very much adopting a Monaco model of buying youngsters, playing them for a few years and selling them for profit. It's just business at the end of the day. You buy to sell to buy to sell to build yourself up over time. 

 

For my money Ricardo will be next, next summer, once JJ had had a season to bed in. Probably for another enormous profit at least 300%.

 

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Guest foxestalkisfullofidiots

Guest foxestalkisfullofidiots

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I have complete faith in the way our club is run, I don't think we would risk not complying with FFP

 

either way I'm not entirely sure how it works

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Mehrez

Mehrez

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So this is my take on it and and I’m by far from an expert but:

 

Under financial fair play rules the majority of outgoings are made up of transfers and wages and incomings are gate receipts, TV money, advertising/commercials, player sales and prize money, worth noting infrastructure projects don’t count against outgoings (training ground, stadium expansion)

 

Premier League financial fair play rules allow for a maximum £105m loss over the past three seasons, so technically we could spend £215m (obvious we won’t, and you have to factor wages into that figure) this season without falling foul of fair play because we recorded the following profits over the last three seasons:

 

17/18: £1.6m

16/17: £92.8m

15/16: £16.4m

Total: ~£110m

 

However come the end of the 20/21 season we’d have just posted a huge loss (from this window, plus other outgoings) and be needing to balance the books, a large player sale will almost certainly be coming but it doesn’t have to be this window, considerable European prize money would also likely fill the void (as in 16/17).

 

Also bare in mind that transfer fees are very rarely paid in full up front rather normally they spread across 3 seasons so say we spend £120m this window on transfers it’s more like £40m for the next three years (I’m assuming FFP accounts this in the same way?)

 

We have some very good business people at the club these days and I’m sure they’ve adequately planned for what we are spending this summer

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urban.spaceman

urban.spaceman

Posted
Posted
18 minutes ago, Trav Le Bleu said:

Maybe I'm wrong and I don't understand FFP properly, but there's a fair few people seem to think we'll be signing Tielemans plus a 30-50 million winger AND keeping all our best players, but I'm not sure that it can be done under FFP for a club our size.

 

Don't get me wrong, I'm believing we'll make the signings, but won't this mean we'll have to balance the books with at least one significant sale. Spending for JJ, Perez, Tielemans +30-50 million will be well in access of £100 million, something I never thought I'd see in my lifetime, with very little going the other way. The way I'm seeing it, we'll have to sell Maguire or Maddison or Ricky P, to satisfy the tally man.

 

Can anyone address this elephant or is it actually just a pipe dream? Personally I wouldn't be too fussed about losing Harry due to having decent cover in that area, I'd be concerned about Maddison going and devastated to lose Ricky P.

 

But maybe we will need the money? Can anyone who knows their stuff tell me I'm wrong?

From what I can gather from the change in rules, Short Term Cost Control (STCC) was brought in in 2013 to stop clubs spending more and more on wages each year.  If they increased more than £7m, then that increase would have to be funded by new commercial deals. When you buy a player for £20m and put him on £100k wages and a 5 year contract, you’re actually preparing to spend £45m over 5 years, not including interest and bonuses, or giving them a raise to try and keep them. 

 

It was basically put in place to stop clubs outside the top 6 from spending outside their means and ending up in financial strife. It also made the top 6 a more closed shop. An unintended result of it was that it hindered our progress after we won the league, but that’s an argument for another time. 

 

In the last few windows we’ve had to balance the books by selling high value players on high wages and trying to find some gems for much better value. And we’ve done that really, really well in a few cases - sold Kante, Drinkwater and Mahrez for club record fees at the time, as well as getting our money back on Musa, and have recruited Maguire, Evans, Maddison, Ricardo and developed Chilwell for less than £80m. 

 

Basically, as far as I understand, we can now be much more flexible with our budget and be able to pay much higher wages overall. I think. 

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WigstonWanderer

WigstonWanderer

Posted
Posted (edited)
3 hours ago, Mehrez said:

So this is my take on it and and I’m by far from an expert but:

 

Under financial fair play rules the majority of outgoings are made up of transfers and wages and incomings are gate receipts, TV money, advertising/commercials, player sales and prize money, worth noting infrastructure projects don’t count against outgoings (training ground, stadium expansion)

 

Premier League financial fair play rules allow for a maximum £105m loss over the past three seasons, so technically we could spend £215m (obvious we won’t, and you have to factor wages into that figure) this season without falling foul of fair play because we recorded the following profits over the last three seasons:

 

17/18: £1.6m

16/17: £92.8m

15/16: £16.4m

Total: ~£110m

 

However come the end of the 20/21 season we’d have just posted a huge loss (from this window, plus other outgoings) and be needing to balance the books, a large player sale will almost certainly be coming but it doesn’t have to be this window, considerable European prize money would also likely fill the void (as in 16/17).

 

Also bare in mind that transfer fees are very rarely paid in full up front rather normally they spread across 3 seasons so say we spend £120m this window on transfers it’s more like £40m for the next three years (I’m assuming FFP accounts this in the same way?)

 

We have some very good business people at the club these days and I’m sure they’ve adequately planned for what we are spending this summer

Yes, this is pretty much my understanding, so in the absence of short term cost controls that limit overall wages and other costs, it’s only profit and loss that’s important, though I thought the EPL allowable cumulative loss was over 5 years.

 

Two things to add.

 

Firstly, it doesn’t matter whether the transfer payment for a player is paid up front or spread over years. For accounting purposes the transfer fee is amortised over the life of the contract. For example, when we bought Silva for (not sure of the actual figures here) 25m on a 5 year contract, his effective cost was actually 5m per year plus wages (plus other fees, financial costs, etc). However this does mean that his residual value after 2 years would be 15m, so if we sold him for say 5m we’d immediately incur a 10m loss.

 

Secondly, UEFA have somewhat more stringent rules, so not really sure how these interact with the EPL ones.

Edited by WigstonWanderer
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Babylon

Babylon

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The reality of it is, without something out of the norm happening we will have to sell an asset because we don’t have the income to afford it. 

 

The relaxation of the ffp laws this season mean it makes it far easier to make investment in the short term. Although you still need to abide by the minimum losses allowable over three seasons. So it allows us to kick the can down the road a bit more, where previously I was harder to do so.

 

So we can make losses now, so long as they are under the allowable figure in the three year period.

 

It has continually been said that we want to be run sustainably, repeated again at the end of last season. So what we are likely to see is a claw back at some point to fill any hole we dig this summer. The squad has a number of high value assets that make that relatively easy, although you have the risk of players getting injured or being out of form that can suddenly mean the assets you wanted to cash in on aren’t there any more.

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WigstonWanderer

WigstonWanderer

Posted
Posted (edited)
1 hour ago, Babylon said:

The reality of it is, without something out of the norm happening we will have to sell an asset because we don’t have the income to afford it. 

 

The relaxation of the ffp laws this season mean it makes it far easier to make investment in the short term. Although you still need to abide by the minimum losses allowable over three seasons. So it allows us to kick the can down the road a bit more, where previously I was harder to do so.

 

So we can make losses now, so long as they are under the allowable figure in the three year period.

 

It has continually been said that we want to be run sustainably, repeated again at the end of last season. So what we are likely to see is a claw back at some point to fill any hole we dig this summer. The squad has a number of high value assets that make that relatively easy, although you have the risk of players getting injured or being out of form that can suddenly mean the assets you wanted to cash in on aren’t there any more.

Yes, I understand UEFA rules are over a 3 year period with a lesser limit on losses (30m euros?) and I assume this overrides the EPL limit. However it begs the question as to what the EPL scheme actually accomplishes as the EUFA limit will always be triggered first. Even with this limit we have quite a bit of headroom over the next 3 seasons though, so no need to sell this season for FFP reasons.

 

As for the owners wanting the club to stand on its own financial feet, I do wonder if that is changing this season. We do not know what effect Vichai’s passing may have had. As a younger man, Top may be prepared to take more risk, and with Rodgers’ appointment and the top 6 looking more shaky he may have decided that now is the time to go for broke. If this is the case I hope it works out. It doesn’t always (West Ham, Everton, Fulham, etc).

Edited by WigstonWanderer
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Dahnsouff

Dahnsouff

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Thought this related to the scrapping of FFP SSTC (Short term cost controls) which were removed July 1st. Seems this basically removes the per annum 7m wage increase cap. This allows us and others to increase wages far more. Total Transfer cash spent (not wages) can be recognised over a 3 year period. Or I could have made that up....

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Bert

Bert

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6 hours ago, Mehrez said:

So this is my take on it and and I’m by far from an expert but:

 

Under financial fair play rules the majority of outgoings are made up of transfers and wages and incomings are gate receipts, TV money, advertising/commercials, player sales and prize money, worth noting infrastructure projects don’t count against outgoings (training ground, stadium expansion)

 

Premier League financial fair play rules allow for a maximum £105m loss over the past three seasons, so technically we could spend £215m (obvious we won’t, and you have to factor wages into that figure) this season without falling foul of fair play because we recorded the following profits over the last three seasons:

 

17/18: £1.6m

16/17: £92.8m

15/16: £16.4m

Total: ~£110m

 

However come the end of the 20/21 season we’d have just posted a huge loss (from this window, plus other outgoings) and be needing to balance the books, a large player sale will almost certainly be coming but it doesn’t have to be this window, considerable European prize money would also likely fill the void (as in 16/17).

 

Also bare in mind that transfer fees are very rarely paid in full up front rather normally they spread across 3 seasons so say we spend £120m this window on transfers it’s more like £40m for the next three years (I’m assuming FFP accounts this in the same way?)

 

We have some very good business people at the club these days and I’m sure they’ve adequately planned for what we are spending this summer

Come the end of the 20/21 season I’d imagine we’d have sold the likes of Maguire, Chilwell, Pereira. Which is at least £200m. 

 

Either way, there’s always a way around FFP. At the very worst we’d be banned for a few windows like Chelsea. But as mentioned, we have some very business savvy people at the club. Wouldn’t worry too much about it all right now. 

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st albans fox

st albans fox

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UEFA ffp only applies to clubs entering uefa comps

 

some clubs will therefore break uefa ffp and not worry about it 

 

if we don’t sell a big asset this summer then we will next ......, (unless we make top 4)

 

its feasible to kick that can for a year or so 

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Babylon

Babylon

Posted
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4 hours ago, WigstonWanderer said:

Yes, I understand UEFA rules are over a 3 year period with a lesser limit on losses (30m euros?) and I assume this overrides the EPL limit. However it begs the question as to what the EPL scheme actually accomplishes as the EUFA limit will always be triggered first. Even with this limit we have quite a bit of headroom over the next 3 seasons though, so no need to sell this season for FFP reasons.

 

As for the owners wanting the club to stand on its own financial feet, I do wonder if that is changing this season. We do not know what effect Vichai’s passing may have had. As a younger man, Top may be prepared to take more risk, and with Rodgers’ appointment and the top 6 looking more shaky he may have decided that now is the time to go for broke. If this is the case I hope it works out. It doesn’t always (West Ham, Everton, Fulham, etc).

I suppose it means you can spend and lose a lot... just don’t dare challenge the top 6 for Europe otherwise UEFA will get you!

 

That’s the thing we don’t know, whether Top shares his fathers vision and way of working, although he did repeat the “sustainability” mantra at the end of the season.

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Dahnsouff

Dahnsouff

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2 minutes ago, kingcarr21 said:

And head to the Ivory Coast

Been a good while since my son was young, but I am pretty sure that isn`t the next line to Nellie the Elephant...:nono:

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