Transfers in the world of FFP - where do we make money?

[Sly]

As we know and have discussed to moon and back, we are potentially in a bit of a mess with an our finances and complying with FFP. 
 

This leaves us with the possibility that we will need to sell assets that makes us money. 
 

These will need to be players with no outstanding financial outgoings or write downs in the accounts (i.e minimal book cost left).

 

I’ve done some quick numbers against book value vs potential transfer spend.

 

Player	Contract Expiry	Book cost	Transfer fee?	Profit
Marc Albrighton	30th June 2024	£0	£0	£0
Jannik Vestergaard	30th June 2024	£0	£0	£0
Dennis Praet	30th June 2024	£0	£0	£0
Jamie Vardy	30th June 2024	£0	£0	£0
Wilfred Ndidi	30th June 2024	£0	£0	£0
Kelechi Iheanacho	30th June 2024	£0	£0	£0
Danny Ward	30th June 2025	£0	£2,000,000	£2,000,000
Daniel Iversen	30th June 2025	£0	£3,000,000	£3,000,000
Luke Thomas	30th June 2025	£0	£5,000,000	£5,000,000
Conor Coady	30th June 2026	£5,000,000	£2,500,000	-£2,500,000
Ricardo Pereira	30th June 2026	£0	£9,000,000	£9,000,000
Harry Winks	30th June 2026	£6,000,000	£10,000,000	£4,000,000
Boubakary Soumaré	30th June 2026	£7,200,000	£8,000,000	£800,000
Patson Daka	30th June 2026	£9,200,000	£10,000,000	£800,000
James Justin	30th June 2026	£0	£10,000,000	£10,000,000
Stephy Mavididi	30th June 2026	£5,600,000	£12,000,000	£6,400,000
Sammy Braybooke	30th June 2026	£0	£1,000,000	£1,000,000
Kasey Mcateer	30th June 2026	£0	£4,000,000	£4,000,000
Will Alves	30th June 2026	£0	£1,000,000	£1,000,000
Wanya Marçal	30th June 2026	£0	£1,000,000	£1,000,000
Wout Faes	30th June 2027	£6,000,000	£12,000,000	£6,000,000
Kiernan Dewsbury-Hall	30th June 2027	£0	£25,000,000	£25,000,000
Hamza Choudhury	30th June 2027	£0	£7,000,000	£7,000,000
Harry Souttar	30th June 2028	£9,000,000	£10,000,000	£1,000,000
Mads Hermansen	30th June 2028	£4,000,000	£10,000,000	£6,000,000
Victor Kristiansen	30th June 2028	£7,200,000	£12,500,000	£5,300,000
Tom Cannon	30th June 2028	£4,800,000	£6,000,000	£1,200,000

 

If we need to sell pre July, it’ll most likely be on the cheap and one, or some of KDH, Justin, Choudhury, Mavididi, Hermansen, Faes and Ricardo.
 

They are the only real players we will get an instant return on.

 

We won’t get the value for the likes of Soumare, Daka or Souttar to justify selling them for the returns we will get. If we don’t get promoted I can see all three being loaned out next season. 
 

In terms of incomings, we surely need to re-sign some of our expiring players if we can.
 

Then we will operate on other free transfer. Clubs can’t afford to saddle themselves with huge debts in terms of large transfer fees for players that haven’t worked and being unable to sell them, due to the FFP impact. 
 

My model is fairly simplistic and doesn’t account for wages, or annual loyalty bonuses, however it gives a quick indication on where we might be. 

 

I guess, does anyone see it being any different? 

[Beachyboy]

Is it just transfers where money needs to be recouped?  I look at those top 6 players £25 mil wages a year of a total £57 million for the squad and I'd argue of those only probably Wilf could make a significant contribution if we are promoted. Get that £25 mil of the books, replace it with £10 mil salaries, you've trimmed the wage bill by 30%, surely that's a factor in FFP?

Edited 28 March by Beachyboy

[Sly]

8 minutes ago, Beachyboy said:

Is it just transfers where money needs to be recouped?  I look at those top 6 players £25 mil wages a year of a total £57 million for the squad and I'd argue of those only probably Wilf could make a significant contribution if we are promoted. Get that £25 mil of the books, replace it with £10 mil salaries, you've trimmed the wage bill by 30%, surely that's a factor in FFP?

Longer term it will be, however if we’ve got a deficit this year, then we’ll need to clear out before the 30th June I believe to try and comply with next years potentially sanctions. 

[ThorpeAstleyFox]

10 minutes ago, Beachyboy said:

Is it just transfers where money needs to be recouped?  I look at those top 6 players £25 mil wages a year of a total £57 million for the squad and I'd argue of those only probably Wilf could make a significant contribution if we are promoted. Get that £25 mil of the books, replace it with £10 mil salaries, you've trimmed the wage bill by 30%, surely that's a factor in FFP?

Whilst this will certainly help in the long term (so should be done, regardless), it will not help to reduce our losses for the current accounting period.

[ThorpeAstleyFox]

Before reading the OP, I also concluded that we may need to sell on some excess academy products. KDH is the obvious one as he will command the highest fee (but for a good reason). If we could move on Thomas, Ward and Iverson, then that would also help.

[Bob Weasel Fox]

Develop our own talent is the only was forward for sustainability 

[fox_up_north]

I will be gutted to see KDH go so early into his career with us. I'd have liked a couple more seasons out of him.

[Terraloon]

1 hour ago, Sly said:

As we know and have discussed to moon and back, we are potentially in a bit of a mess with an our finances and complying with FFP. 
 

This leaves us with the possibility that we will need to sell assets that makes us money. 
 

These will need to be players with no outstanding financial outgoings or write downs in the accounts (i.e minimal book cost left).

 

I’ve done some quick numbers against book value vs potential transfer spend.

 

Player	Contract Expiry	Book cost	Transfer fee?	Profit
Marc Albrighton	30th June 2024	£0	£0	£0
Jannik Vestergaard	30th June 2024	£0	£0	£0
Dennis Praet	30th June 2024	£0	£0	£0
Jamie Vardy	30th June 2024	£0	£0	£0
Wilfred Ndidi	30th June 2024	£0	£0	£0
Kelechi Iheanacho	30th June 2024	£0	£0	£0
Danny Ward	30th June 2025	£0	£2,000,000	£2,000,000
Daniel Iversen	30th June 2025	£0	£3,000,000	£3,000,000
Luke Thomas	30th June 2025	£0	£5,000,000	£5,000,000
Conor Coady	30th June 2026	£5,000,000	£2,500,000	-£2,500,000
Ricardo Pereira	30th June 2026	£0	£9,000,000	£9,000,000
Harry Winks	30th June 2026	£6,000,000	£10,000,000	£4,000,000
Boubakary Soumaré	30th June 2026	£7,200,000	£8,000,000	£800,000
Patson Daka	30th June 2026	£9,200,000	£10,000,000	£800,000
James Justin	30th June 2026	£0	£10,000,000	£10,000,000
Stephy Mavididi	30th June 2026	£5,600,000	£12,000,000	£6,400,000
Sammy Braybooke	30th June 2026	£0	£1,000,000	£1,000,000
Kasey Mcateer	30th June 2026	£0	£4,000,000	£4,000,000
Will Alves	30th June 2026	£0	£1,000,000	£1,000,000
Wanya Marçal	30th June 2026	£0	£1,000,000	£1,000,000
Wout Faes	30th June 2027	£6,000,000	£12,000,000	£6,000,000
Kiernan Dewsbury-Hall	30th June 2027	£0	£25,000,000	£25,000,000
Hamza Choudhury	30th June 2027	£0	£7,000,000	£7,000,000
Harry Souttar	30th June 2028	£9,000,000	£10,000,000	£1,000,000
Mads Hermansen	30th June 2028	£4,000,000	£10,000,000	£6,000,000
Victor Kristiansen	30th June 2028	£7,200,000	£12,500,000	£5,300,000
Tom Cannon	30th June 2028	£4,800,000	£6,000,000	£1,200,000

 

If we need to sell pre July, it’ll most likely be on the cheap and one, or some of KDH, Justin, Choudhury, Mavididi, Hermansen, Faes and Ricardo.
 

They are the only real players we will get an instant return on.

 

We won’t get the value for the likes of Soumare, Daka or Souttar to justify selling them for the returns we will get. If we don’t get promoted I can see all three being loaned out next season. 
 

In terms of incomings, we surely need to re-sign some of our expiring players if we can.
 

Then we will operate on other free transfer. Clubs can’t afford to saddle themselves with huge debts in terms of large transfer fees for players that haven’t worked and being unable to sell them, due to the FFP impact. 
 

My model is fairly simplistic and doesn’t account for wages, or annual loyalty bonuses, however it gives a quick indication on where we might be. 

 

I guess, does anyone see it being any different? 

Interesting . Not sure the numbers are correct but does highlight the massive issues in terms of the sqaud at seasons end irrespective of which league LCFC ply their trade next season 

 

Alas free transfers are rarely just that when you add in bigger signing on fees and wages  and agents wanting their xtra wedge it’s quite staggering how much they cost. Similarly when you sell a player the costs involved, the transfer levy paid to the authorities any profit is soon reduced. That said a real bonus when you sign a player with sums still to be  amortised the sums left to depreciate going forward disappears.

 

 

[Babylon]

1 hour ago, Bob Weasel Fox said:

Develop our own talent is the only was forward for sustainability 

And they got stolen by the big teams before they sign a pro contract and we get a few quid. 

[Bob Weasel Fox]

21 minutes ago, Babylon said:

And they got stolen by the big teams before they sign a pro contract and we get a few quid. 

Yep

 

so buy young talent ourselves and sell on for profit

[orangecity23]

53 minutes ago, Babylon said:

And they got stolen by the big teams before they sign a pro contract and we get a few quid. 

In the case of Nyoni we haven't even got the few quid yet, still waiting for that tribunal.

[Stadt]

If we absolutely must sell, Hermansen should be the priority. I think he's fantastic but he has an in-demand skill set, prime saleable age and we could potentially treble our outlay on him. We then have Stolyczark to step in.

 

KDH would fetch more, you'd think, but we can't replace 80% of his output even if we spent > 100% of the price, even spending half the fee we'd get is out of the question.

 

Choudhury and McAteer would be excellent sales if we could pick the right fee up too.

 

Soumare, Kristiansen, Souttar aren't great sales but having their wages off the books are the primary concern, we're not in a financial mess because of our transfer spending, it's the wages.

 

If we're tied to 70% of our turnover then we have to blitz the wage bill to give us any headroom.

[Itsthejoeker]

5 hours ago, Bob Weasel Fox said:

Yep

 

so buy young talent ourselves and sell on for profit

What a depressing cycle that is

[Chrysalis]

I think this book value (amortisation cost) has been misrepresented somewhat.

 

Some think if e.g. a player has £5,000,000 amortised value left, it means if we sell for anything less then that, then its a loss on the books and not worth doing, that is actually wrong.

 

The 5 million (plus the wages) is the existing loss on the books, if sold for 1 million, that existing loss is reduced to 4 million and the projected PSR loss is reduced by 1 million, so its basically an extra 1 million (plus gained wages) on the PSR balance.

 

High wages has obviously hindered us getting rid of players, but I think we have also tried to be too stubborn on the selling price.  Some times you just have to "cut your losses".

[Chrysalis]

26 minutes ago, Stadt said:

If we absolutely must sell, Hermansen should be the priority. I think he's fantastic but he has an in-demand skill set, prime saleable age and we could potentially treble our outlay on him. We then have Stolyczark to step in.

 

KDH would fetch more, you'd think, but we can't replace 80% of his output even if we spent > 100% of the price, even spending half the fee we'd get is out of the question.

 

Choudhury and McAteer would be excellent sales if we could pick the right fee up too.

 

Soumare, Kristiansen, Souttar aren't great sales but having their wages off the books are the primary concern, we're not in a financial mess because of our transfer spending, it's the wages.

 

If we're tied to 70% of our turnover then we have to blitz the wage bill to give us any headroom.

Its a sad state of affairs, but I think I agree with your analysis, this has to be approached in a way of how difficult the player is to replace, and no question Mads is an easier one than KDH.

Sadly KDH is being hindered right now, the same way Barnes was, he is a prime counter attacking player, who I think also needs to be allowed to shoot whenever is a chance, with the current manager wanting him to play keep ball instead, which is why I think his output has reduced since the start of the season, however I think Enzo might not be with us next season, and KDH is the sort of player if we sell would probably doom us.

Edited 28 March by Chrysalis

[James_lcfc]

30 minutes ago, Stadt said:

If we absolutely must sell, Hermansen should be the priority. I think he's fantastic but he has an in-demand skill set, prime saleable age and we could potentially treble our outlay on him. We then have Stolyczark to step in.

 

KDH would fetch more, you'd think, but we can't replace 80% of his output even if we spent > 100% of the price, even spending half the fee we'd get is out of the question.

 

Choudhury and McAteer would be excellent sales if we could pick the right fee up too.

 

Soumare, Kristiansen, Souttar aren't great sales but having their wages off the books are the primary concern, we're not in a financial mess because of our transfer spending, it's the wages.

 

If we're tied to 70% of our turnover then we have to blitz the wage bill to give us any headroom.

Yeah - As shit as it is, I agree with this.

 

We actually have very few sellable assets. Or at least players that other clubs would want considering their quality:wage demands.

[urban fox]

1 hour ago, Chrysalis said:

I think this book value (amortisation cost) has been misrepresented somewhat.

 

Some think if e.g. a player has £5,000,000 amortised value left, it means if we sell for anything less then that, then its a loss on the books and not worth doing, that is actually wrong.

 

The 5 million (plus the wages) is the existing loss on the books, if sold for 1 million, that existing loss is reduced to 4 million and the projected PSR loss is reduced by 1 million, so its basically an extra 1 million (plus gained wages) on the PSR balance.

 

High wages has obviously hindered us getting rid of players, but I think we have also tried to be too stubborn on the selling price.  Some times you just have to "cut your losses".

That only works if a player is in last year of contract.

If say there is two years left, amortised as £5m each year, sell for £2m, then the loss in the year of the sale is £8m, as opposed to £5m each year for 2 years.

In other words, to reduce the actual loss in the year of sale you would need to sell for at least £6m to reduce the loss by £1m. Yes you make a saving against second year (plus wages) but that does not help in respect of psr for the year of sale, it makes it worse.

[Bob Weasel Fox]

2 hours ago, Itsthejoeker said:

What a depressing cycle that is

Yes but apart from production of our own talent probably the only way forward unless a Roman "cunty **** McCunt" Abromovich takes over from Top and then we really have sold our souls to the devil if that happens 

[Dan LCFC]

14 hours ago, Babylon said:

And they got stolen by the big teams before they sign a pro contract and we get a few quid. 

This is the scandalous part of this that is getting quite overlooked. Haven't we received nothing for Nyoni? Yet when we do it'll be a pittance. It's outrageous. It should be eight figures.

[jayfox26]

14 hours ago, Babylon said:

And they got stolen by the big teams before they sign a pro contract and we get a few quid. 

And this is why football is fcked. Smaller teams can't compete financially because of ffp. Smaller teams can't compete by developing homegrown talent and selling them as they get poached at a young age by the big clubs. It's becoming harder and harder to enjoy professional football in this country. 

[Foxmeister]

I've set a countdown on my phone for Ward's contract.

[fox_favourite]

If we need money, I'm willing to sell a kidney. 

[st albans fox]

17 hours ago, Stadt said:

If we absolutely must sell, Hermansen should be the priority. I think he's fantastic but he has an in-demand skill set, prime saleable age and we could potentially treble our outlay on him. We then have Stolyczark to step in.

 

KDH would fetch more, you'd think, but we can't replace 80% of his output even if we spent > 100% of the price, even spending half the fee we'd get is out of the question.

 

Choudhury and McAteer would be excellent sales if we could pick the right fee up too.

 

Soumare, Kristiansen, Souttar aren't great sales but having their wages off the books are the primary concern, we're not in a financial mess because of our transfer spending, it's the wages.

 

If we're tied to 70% of our turnover then we have to blitz the wage bill to give us any headroom.

Let’s say that you’re in year 3 of your contract of £3m per season 

if you’re sold to a club that will only pay you £1.5m per season, what happens to the £3m loss that was your contracted forward earnings ??

 

my guess is that we either have to pay that 1.5m on sale or the fee is reduced by that amount and the player takes the 1.5m as part of their s/o fee. Ether way, we only save the wage that the new club is able to pay. This is a reason that loans are popular on players with a high amortised value.