Macquarie Loan for Parachute Payments Rolled Over

[Foxin_Mad]

1 minute ago, foxinsocks said:

I agree.  It shoukd only introduce curbs when spending is not cashflowed or debts were becoming unsustainable... the idea was to stop "shit or bust" owners

It’s plainly not working with the dodgy owners either as there was still that Reading guy and Chansiri, it’s really a complete failure. It wouldn’t surprise me if there are more loopholes, we don’t deserve to get off but wonder if that’s the delay 

[Sky Blues]

13 minutes ago, Foxin_Mad said:

A sensible change would be to scrap the whole PSR thing, it doesn’t work

It doesn't work if you don't keep to the rules. The sides doing better now are those who kept to the rules. 

[coolhandfox]

1 hour ago, Chelmofox said:

But if they did that, wouldn't clubs just start issuing 7 year contracts?

They aren't allowed, 5 years is the max for amortisation purposes.

 

They changed it due to Chelsea handing out 7 and 8 years contract to get around the rules.

Edited 15 January by coolhandfox

[Foxin_Mad]

Just now, Sky Blues said:

It doesn't work if you don't keep to the rules. The sides doing better now are those who kept to the rules. 

Forest did okay by ignoring them, the big six can easily find loopholes like selling hotels etc. It’s fundamentally not really doing what it was meant to do, it’s further creating a gap for the big 6, possibly growing other gaps. 

[Sky Blues]

5 minutes ago, Foxin_Mad said:

Forest did okay by ignoring them, the big six can easily find loopholes like selling hotels etc. It’s fundamentally not really doing what it was meant to do, it’s further creating a gap for the big 6, possibly growing other gaps. 

You did extremely well by ignoring them. The problem was after winning the Prem you spent like a big club and made some bad decisions. You're on the edge once your income is taken by wages. The big clubs have a much bigger income. 

[HankMarvin]

5 minutes ago, Foxin_Mad said:

Forest did okay by ignoring them, the big six can easily find loopholes like selling hotels etc. It’s fundamentally not really doing what it was meant to do, it’s further creating a gap for the big 6, possibly growing other gaps. 

I guess it’s how creative you can get now days.

 

Villa with a similar wages to turnover ratio as we had, sell the women’s team to a parent company nothing to see there.

The player swaps a while back, nothing to see there.

 

Player 'swaps' can be mutually beneficial for two or more clubs who need to make a quick profit."

Maguire lays out a hypothetical scenario in which 'Club A’ has a former academy player who it would normally look to sell for £8m, while 'Club B' has a former academy player it would usually value at £10m.

"However, if a swap deal is made there is nothing to stop the 'official' price to be £28m and £30m," explains Maguire.

"This way there is still a cash settlement of £2m, but the profits in the accounts are £28m and £30m - fantastic for PSR. The additional cost of signing both players is then spread using amortisation over the contract life of five years, so is effectively kicked down the road.

"Given that it is so difficult to determine the market price for a player, the swap market can be seen as exploiting a weakness in the rules, but is not necessarily breaching anything."

 

[HankMarvin]

6 minutes ago, Sky Blues said:

You did extremely well by ignoring them. The problem was after winning the Prem you spent like a big club and made some bad decisions. You're on the edge once your income is taken by wages. The big clubs have a much bigger income. 

That wasn’t the issue, as the business model allowed one significant expensive player to be sold year after year. The problem is when the market becomes more and more competitive the harder it is to find these players unless you adapt. It all goes hand in hand the more successful you are, the more the good players are desired and the higher fees you can get. We didn’t have a slow slip off like most clubs flirting with relegation for a few seasons.

5th 5th 8th 18th it was the perfect storm for a club living beyond its means 

[Terraloon]

4 hours ago, foxinsocks said:

You make a really interesting point - PSR shoudl not prevent clubs form selling a play at belw book cost... as tghe players price is a market valuation and may well fall... if the club cant sell then tyhery are force to carry on paying them.  Surely this isn't what thery want?

You have to take a view as to what is cost effective on a player by player basis. You have to look further than just what  a players book value is you have to factor in the cost of the player and that includes wages and nic.

 

Put to one side the contribution the player makes or doesn’t make on the pitch because that’s a whole different debate.

 

Lets say player a) has two years left on his 5 year deal and that player cost £10 million and is on £75k a week or £3.75 million a year.

 

In the current year let’s say you let the player leave on a free. So in the year you save the £3.75 million wages ( plus 13% nic) so circa £4 million savings which spookily enough is the amount that will have to be included come year end in terms of amortisation for the current year and in advance of the last year of his contract ( impairment). Cost neutral this year but does away with £ 4 million squad costs next year.

 

Or say that same players is sold for £2 million( which is only half of the players book value)  as opposed to letting him go  for nil means in it’s not just a positive for the current year that has to be factored in it’s how the savings going forward can stack up but the sell was less than book value

 

There is something else that’s worth mentioning and that is the directors are duty bound at the end of the accounting year to take a view, an informed one at that, as to the current value of a player against their  book value and adjust the numbers accordingly downward( you can’t increase upward)  by a mechanism called impairment which adds an extra charge to the accounts but reduces amortisation going forward.

 

 

 

 

Edited 15 January by Terraloon

[Stadt]

1 hour ago, Terraloon said:

You have to take a view as to what is cost effective on a player by player basis. You have to look further than just what  a players book value is you have to factor in the cost of the player and that includes wages and nic.

 

Put to one side the contribution the player makes or doesn’t make on the pitch because that’s a whole different debate.

 

Lets say player a) has two years left on his 5 year deal and that player cost £10 million and is on £75k a week or £3.75 million a year.

 

In the current year let’s say you let the player leave on a free. So in the year you save the £3.75 million wages ( plus 13% nic) so circa £4 million savings which spookily enough is the amount that will have to be included come year end in terms of amortisation for the current year and in advance of the last year of his contract ( impairment). Cost neutral this year but does away with £ 4 million squad costs next year.

 

Or say that same players is sold for £2 million( which is only half of the players book value)  as opposed to letting him go  for nil means in it’s not just a positive for the current year that has to be factored in it’s how the savings going forward can stack up but the sell was less than book value

 

There is something else that’s worth mentioning and that is the directors are duty bound at the end of the accounting year to take a view, an informed one at that, as to the current value of a player against their  book value and adjust the numbers accordingly downward( you can’t increase upward)  by a mechanism called impairment which adds an extra charge to the accounts but reduces amortisation going forward.

 

 

 

 

Are the impairment figures included in the accounts or are they bundled up into one figure?

Edited 15 January by Stadt

[Terraloon]

28 minutes ago, Stadt said:

Are the impairment figures included in the accounts or are they bundled up into one figure?

Separated 

 

Not many clubs realistically do impair values often because they , the directors overvalue a players worth indeed over the last couple of years most clubs show little to no sum. 
 

During Covid Chelsea showed impairment of players registrations  over a couple of years by just under £100m. I have no idea what the justification of them claiming so much but I do wonder if they were able to set some if not all that enormous sum down as Covid losses.

 

Arenal had a player Pepe ,  signed him for €65 m on a 5 year deal but after 4 years they let him go on a free the balance due of his fee that was left to be amortised was shown in their accounts in the  impairment numbers.

Edited 15 January by Terraloon

[5waller5]

3 hours ago, Terraloon said:

Not sure I would agree fully with that.

 

I know quite a few companies ,mostly very small who use factoring  for a variety of reasons but  often it saves them significant time and resources by not having to chase debt enabling them to concentrate on carrying on doing the day job as it were. 
 

Yeah I’m sure there’s exceptions, like I say it’s purely anecdotal

[jayfox26]

1 hour ago, Sky Blues said:

You did extremely well by ignoring them. The problem was after winning the Prem you spent like a big club and made some bad decisions. You're on the edge once your income is taken by wages. The big clubs have a much bigger income. 

We haven't done well by ignoring them at all. Our success happened before we started spending stupid money. Rodgers was given too much power and he made us scrap our policy of selling a key player every year to fund new signings. We thought we would make champions league and be able to afford it and we didn't and we couldn't. And the ridiculous relegation destroyed us and then forced us to sell all our best players. Not making excuses as we've been ran terribly and made shocking signings and had god awful players on horrendous wages that we can't shift. Whilst we haven't kept within the spending rules, we haven't tried to find loopholes like selling hotels and women's teams and we have actively been reducing our wage bill for the last 2 years and haven't spent a penny on new signings since summer 2024 

Edited 15 January by jayfox26

[The Year Of The Fox]

33 minutes ago, jayfox26 said:

We haven't done well by ignoring them at all. Our success happened before we started spending stupid money. Rodgers was given too much power and he made us scrap our policy of selling a key player every year to fund new signings. We thought we would make champions league and be able to afford it and we didn't and we couldn't. And the ridiculous relegation destroyed us and then forced us to sell all our best players. Not making excuses as we've been ran terribly and made shocking signings and had god awful players on horrendous wages that we can't shift. Whilst we haven't kept within the spending rules, we haven't tried to find loopholes like selling hotels and women's teams and we have actively been reducing our wage bill for the last 2 years and haven't spent a penny on new signings since summer 2024 

Accurate 

[Terraloon]

41 minutes ago, jayfox26 said:

We haven't done well by ignoring them at all. Our success happened before we started spending stupid money. Rodgers was given too much power and he made us scrap our policy of selling a key player every year to fund new signings. We thought we would make champions league and be able to afford it and we didn't and we couldn't. And the ridiculous relegation destroyed us and then forced us to sell all our best players. Not making excuses as we've been ran terribly and made shocking signings and had god awful players on horrendous wages that we can't shift. Whilst we haven't kept within the spending rules, we haven't tried to find loopholes like selling hotels and women's teams and we have actively been reducing our wage bill for the last 2 years and haven't spent a penny on new signings since summer 2024 

Haven’t tried to find loopholes? What is realistically a loophole? 
 

This is where I have a problem . If the rules state you can’t do something then that’s clear but if those rules don’t exclude something then when someone or some entity does something that’s allowed then good on them.

 

Were LCFC using a loophole as you call it to in effect to gain an accounting years grace or was it simply LCFC using the rules to their advantage?

 

 

People will then start to talk about spirit of the rules and all that but when it comes to the PL had the shareholders ( the clubs ) felt strongly about say selling hotels, woman’s teams etc it was in their gift to change the rules.

 

 

 

[Tommy G]

2 hours ago, Terraloon said:

You have to take a view as to what is cost effective on a player by player basis. You have to look further than just what  a players book value is you have to factor in the cost of the player and that includes wages and nic.

 

Put to one side the contribution the player makes or doesn’t make on the pitch because that’s a whole different debate.

 

Lets say player a) has two years left on his 5 year deal and that player cost £10 million and is on £75k a week or £3.75 million a year.

 

In the current year let’s say you let the player leave on a free. So in the year you save the £3.75 million wages ( plus 13% nic) so circa £4 million savings which spookily enough is the amount that will have to be included come year end in terms of amortisation for the current year and in advance of the last year of his contract ( impairment). Cost neutral this year but does away with £ 4 million squad costs next year.

 

Or say that same players is sold for £2 million( which is only half of the players book value)  as opposed to letting him go  for nil means in it’s not just a positive for the current year that has to be factored in it’s how the savings going forward can stack up but the sell was less than book value

 

There is something else that’s worth mentioning and that is the directors are duty bound at the end of the accounting year to take a view, an informed one at that, as to the current value of a player against their  book value and adjust the numbers accordingly downward( you can’t increase upward)  by a mechanism called impairment which adds an extra charge to the accounts but reduces amortisation going forward.

 

 

 

 

But isn’t this impairment review the same as you would do annually in a normal business - it’s just typical assets like inventory, debtors, tangible or intangible are just player assets instead - you could get away with all kind of impairment changes during 2020 and 2021 but it was also a tricky road to navigate from a going concern perspective!

[HankMarvin]

11 minutes ago, Terraloon said:

Haven’t tried to find loopholes? What is realistically a loophole? 

Nope definitely not tried to find “loopholes” 👀

 

“Leicester City will pay the Football League £3.1m after settling a Financial Fair Play (FFP) disputefrom the 2013/14 season when the club won the Championship.

The Foxes exceeded the permitted £8m loss when they won promotion.

They posted a loss of £20.8m but said £13m of it was "allowable" as it included promotion and academy costs.

The EFL said, external that Leicester "did not make any deliberate attempt to infringe the rules or to deceive".

It added: "The dispute arose out of genuine differences of interpretation of the rules between the parties”

 

A familiar defence, there was also the shady Trestellar deal, which allowed the club to spend £36m on wages.

£5m more than their total income before getting promoted   

 

[Terraloon]

5 minutes ago, Tommy G said:

But isn’t this impairment review the same as you would do annually in a normal business - it’s just typical assets like inventory, debtors, tangible or intangible are just player assets instead - you could get away with all kind of impairment changes during 2020 and 2021 but it was also a tricky road to navigate from a going concern perspective!

It is.

[jayfox26]

3 hours ago, Terraloon said:

Haven’t tried to find loopholes? What is realistically a loophole? 
 

This is where I have a problem . If the rules state you can’t do something then that’s clear but if those rules don’t exclude something then when someone or some entity does something that’s allowed then good on them.

 

Were LCFC using a loophole as you call it to in effect to gain an accounting years grace or was it simply LCFC using the rules to their advantage?

 

 

People will then start to talk about spirit of the rules and all that but when it comes to the PL had the shareholders ( the clubs ) felt strongly about say selling hotels, woman’s teams etc it was in their gift to change the rules.

 

 

 

Yeh fair enough. And to be fair, as regards the loopholes around hotels, women's teams etc, the reason we probably havent tried anything like this is because it would require Top/KP to fund it which they can't/won't. 

 

I'm certainly not trying to find any excuses, part of me wants them to throw the book at us to show Top and his board of clowns for the incompetent muppets that they are.

Edited 16 January by jayfox26

[Gamble92]

1 hour ago, HankMarvin said:

Nope definitely not tried to find “loopholes” 👀

 

 

“Leicester City will pay the Football League £3.1m after settling a Financial Fair Play (FFP) disputefrom the 2013/14 season when the club won the Championship.

The Foxes exceeded the permitted £8m loss when they won promotion.

They posted a loss of £20.8m but said £13m of it was "allowable" as it included promotion and academy costs.

The EFL said, external that Leicester "did not make any deliberate attempt to infringe the rules or to deceive".

It added: "The dispute arose out of genuine differences of interpretation of the rules between the parties”

 

A familiar defence, there was also the shady Trestellar deal, which allowed the club to spend £36m on wages.

£5m more than their total income before getting promoted   

 

There was much more reason to punish us for the way we got promoted then than this is now. 

 

We threw shit loads of money at it and knew exactly what we were doing. 

 

These few years we've gained **** all and lost all our best players. 

[Sky Blues]

6 hours ago, jayfox26 said:

We haven't done well by ignoring them at all. Our success happened before we started spending stupid money. Rodgers was given too much power and he made us scrap our policy of selling a key player every year to fund new signings. We thought we would make champions league and be able to afford it and we didn't and we couldn't. And the ridiculous relegation destroyed us and then forced us to sell all our best players. Not making excuses as we've been ran terribly and made shocking signings and had god awful players on horrendous wages that we can't shift. Whilst we haven't kept within the spending rules, we haven't tried to find loopholes like selling hotels and women's teams and we have actively been reducing our wage bill for the last 2 years and haven't spent a penny on new signings since summer 2024 

There's been 2 different sets of rule changes directly because of what your club has done. The first one gave you a big financial boost when you didn't have to pay the full amount for your ground when going into administration. 

 

It seems the biggest complaint is other clubs have found more lucrative loopholes or you're worse off because another club survived relegation when using the same loophole. 

[damolcfc]

I would never be able to sleep at night if I was in charge of finance 🙃 🙄 😝

[Lineker's Left Foot]

5 hours ago, Sky Blues said:

There's been 2 different sets of rule changes directly because of what your club has done. The first one gave you a big financial boost when you didn't have to pay the full amount for your ground when going into administration. 

 

It seems the biggest complaint is other clubs have found more lucrative loopholes or you're worse off because another club survived relegation when using the same loophole. 

So that was our fault that ITV Digital collapsed?

 

Also after perusing your forum, I have found that Leicester fans get barracked on Sky Blues Talk for having a genuine discussion.

 

Think you get an ‘easy ride’ here.  Looks like your fans are full of so much vitriol for us 😂

[Terraloon]

15 hours ago, coolhandfox said:

They aren't allowed, 5 years is the max for amortisation purposes.

 

They changed it due to Chelsea handing out 7 and 8 years contract to get around the rules.

Chelsea were by no means the first team to amortise a players transfer fee by a period greater than 5 years .Indeed all players that signed a second contract when the initial one entailed a cost had their fee amortised over a period greater than 5 years .
 

Interesting fact is that players that signed  say 7 year deals in accounting terms nothing changes because under accepted  protocol amortising the fees over the contract period  won’t change what has is the numbers being submitted for FFP/PSR purposes. It’s going to be impossible to just look at the accounts and transfer the numbers to our bag if the packet fag packet PSR calculations 

 

If you look  at football certainly Europe  wise where big fees were involved clubs have used contracts in excess of 5 years for many years.It happened when clubs like Real Madrid, Barcelona &  Man Utd signed players and I believe Newcastle were among clubs that did likewise

 

For me this rule change was a knee jerk and at some point those that heralded the change will realise it will impact them negatively.

 

Its important to recognise that sums amortised don’t just include transfer fees it also includes all sums that have been incurred and that includes sums paid to intermediaries. So say you signed a player on a 5 year deal on a fee of £20 million  and after 3 years the club / player agree a new 5 year deal then the annual sum of the fee history would reduce from £4 million to £1.6 million over a new 5 year period  plus 20% of the intermediary fee whereas now that £4 million won’t change plus 50% of the intermediary fee.

 

Agreeing a long term deal which probably includes triggers for improved terms and conditions will likely in the long term save significant fees paid for agreements to extended contracts.
 

Edited 16 January by Terraloon

[Pliskin]

It’s okay Leicester fan TV are going to ask where all the money has gone, that’ll learn em I’m sure! 

[coolhandfox]

The big issue I have with PSR fans are spending more time talking about clubs accounts, PSR rules, than talking about the actual football.