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Jun 16, 2019 10:29:51 GMT
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Post by neddy on Jun 16, 2019 10:29:51 GMT
How bad is it for us?
- is it why we can’t make any purchases? - do we have to wait to sell say Butland? - can we risk purchasing but not selling? - do we have to wait to offload the like of Wimmer, Badou and Imbula? - is this why we have only the 4 lined up that represent the players that have left?
🤦♂️🤔
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FFP
Jun 16, 2019 10:35:16 GMT
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Post by cobhamstokey on Jun 16, 2019 10:35:16 GMT
How bad is it for us? - is it why we can’t make any purchases? - do we have to wait to sell say Butland? - can we risk purchasing but not selling? - do we have to wait to offload the like of Wimmer, Badou and Imbula? - is this why we have only the 4 lined up that represent the players that have left? 🤦♂️🤔 All I do know is whoever is responsible for signing some of the names above and giving them big contracts is hugely responsible for the mess we’re in.
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Jun 16, 2019 11:20:54 GMT
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Post by bayernoatcake on Jun 16, 2019 11:20:54 GMT
I don’t get why it would be a problem tbh.
We’ve got rid of a shit tonne of wages.
The 50% relegation wage cut seemed true.
So the wages were around 90m in the PL weren’t they? So that’s down to 45m instantly.
And since then we’ve got rid of Zouma and Jese who would have presumably been in on that.
Choupo-Moting, Crouch, Shaq, Fletcher, Adam, Haugaard, Johnson, Ireland, Ramadan, Muniesa, Grant and Afellay off the books too.
Throw in wage contributions for Wimmer, Badou and Imbula and I can’t see why we’d be struggling?
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Post by 4thMarch1972 on Jun 16, 2019 13:07:34 GMT
I believe that FFP is a massive issue for the football club and is absolutely dictating our current policy.
It is calculated over a three year period where the current year is always year three. Championship clubs are permitted to lose just £39million over that time (£13 million a year) Premier League clubs can lose £105 million (£35 million a year) Currently, our year one was spent in the Premier league and years 2 and 3 in the Championship. We could, therefore, lose a total of £61million in the three year period.
Unfortunately, in year 1 we posted losses of £30million. Last year( year 2) I shudder to think how much we lost. As Bayern stated, we did implement some measures, but also saw a straight off £60million drop in TV revenue plus associated drops in season ticket sales and commercial revenue in addition to a net transfer spend of £20 million+. I would be amazed if we didn't lose circa £40 million last year.
What does all this mean? It means that if we want to avert a large fine, transfer embargo or even points deduction this time next year we need to either get promoted or turn a profit this year. Sadly, I don't believe we are in any position to turn down £20 million for Jack and nor must he be the only one sold. I'm actually gobsmacked that neither the Sentinel or Radio Stoke seem to be making a big issue of FFP. I sincerely hope I'm wrong but the numbers, for me, simply don't add up right now.
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Jun 16, 2019 14:11:02 GMT
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Post by neddy on Jun 16, 2019 14:11:02 GMT
I’m with you March I believe this is an issue especially with real turnover now probably down to less than £10m?
We must sell in my view....they need Butland gone in my view to purchase?
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Jun 16, 2019 14:14:42 GMT
Post by Gob Bluth on Jun 16, 2019 14:14:42 GMT
I think it's massive and only highlights our inability to move players on. I'm obviously not happy about signing poorly but our decision to keep adding to the pile of players we have was, and is ridiculous.
We own and don't look to be selling players that don't fit our current manager's philosophy and preferred formation. It was rumoured that we had offers for James M and we decided to hold on to him. This for me proves we're still making poor decisions at the club.
The solution to this is for the club to select a playing style and sign players based on that. Bizarrely it means pulling more power out of the managers hands and into the clubs but while we're changing manager regularly this would mitigate the problem we have of a squad full (and a half) of players that don't fit.
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Post by westyorkspotter on Jun 16, 2019 14:47:59 GMT
It’s also the reason why we can’t just cut our losses on the likes of Wimmer and Imbula. From an accounting perspective, the transfer fees paid are amortised over the length of their contract. So, we paid £18m for Kevin Wimmer which would result in an annual charge in the accounts of £3.6m (assuming he’s on a 5 year contract).
His value in the clubs accounts will probably be in the region of £11m now, having had two years of amortisation applied. If we chose to sell him for £1m now, we’d be crystalising an accounting loss of £10m in the current year’s accounts, obviously contributing to any annual loss for FFP purposes. This may be why we have chosen to loan out Imbula and Wimmer in previous seasons to avoid crystalising such a loss.
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Jun 16, 2019 16:12:50 GMT
Post by Gob Bluth on Jun 16, 2019 16:12:50 GMT
It’s also the reason why we can’t just cut our losses on the likes of Wimmer and Imbula. From an accounting perspective, the transfer fees paid are amortised over the length of their contract. So, we paid £18m for Kevin Wimmer which would result in an annual charge in the accounts of £3.6m (assuming he’s on a 5 year contract). His value in the clubs accounts will probably be in the region of £11m now, having had two years of amortisation applied. If we chose to sell him for £1m now, we’d be crystalising an accounting loss of £10m in the current year’s accounts, obviously contributing to any annual loss for FFP purposes. This may be why we have chosen to loan out Imbula and Wimmer in previous seasons to avoid crystalising such a loss. This is great information from someone with obvious expertise. It could also explain our policy on free transfers as it would guarantee we wouldn't add to the problem. I'm guessing there becomes a point in valuation that the club would have to make a sensible, long term call on this. Looking at Wimmer a 6m figure would eat into the accounting loss and kill the scheduled debt in terms of wages.
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Jun 16, 2019 16:38:07 GMT
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Post by stokefan1972 on Jun 16, 2019 16:38:07 GMT
It’s also the reason why we can’t just cut our losses on the likes of Wimmer and Imbula. From an accounting perspective, the transfer fees paid are amortised over the length of their contract. So, we paid £18m for Kevin Wimmer which would result in an annual charge in the accounts of £3.6m (assuming he’s on a 5 year contract). His value in the clubs accounts will probably be in the region of £11m now, having had two years of amortisation applied. If we chose to sell him for £1m now, we’d be crystalising an accounting loss of £10m in the current year’s accounts, obviously contributing to any annual loss for FFP purposes. This may be why we have chosen to loan out Imbula and Wimmer in previous seasons to avoid crystalising such a loss. thanks John for the information
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FFP
Jun 16, 2019 20:50:36 GMT
Post by innocentbystander on Jun 16, 2019 20:50:36 GMT
I believe that FFP is a massive issue for the football club and is absolutely dictating our current policy. It is calculated over a three year period where the current year is always year three. Championship clubs are permitted to lose just £39million over that time (£13 million a year) Premier League clubs can lose £105 million (£35 million a year) Currently, our year one was spent in the Premier league and years 2 and 3 in the Championship. We could, therefore, lose a total of £61million in the three year period. Unfortunately, in year 1 we posted losses of £30million. Last year( year 2) I shudder to think how much we lost. As Bayern stated, we did implement some measures, but also saw a straight off £60million drop in TV revenue plus associated drops in season ticket sales and commercial revenue in addition to a net transfer spend of £20 million+. I would be amazed if we didn't lose circa £40 million last year. What does all this mean? It means that if we want to avert a large fine, transfer embargo or even points deduction this time next year we need to either get promoted or turn a profit this year. Sadly, I don't believe we are in any position to turn down £20 million for Jack and nor must he be the only one sold. I'm actually gobsmacked that neither the Sentinel or Radio Stoke seem to be making a big issue of FFP. I sincerely hope I'm wrong but the numbers, for me, simply don't add up right now. Excellent post.
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Jun 17, 2019 8:09:41 GMT
Post by estrangedsonoffaye on Jun 17, 2019 8:09:41 GMT
It’s also the reason why we can’t just cut our losses on the likes of Wimmer and Imbula. From an accounting perspective, the transfer fees paid are amortised over the length of their contract. So, we paid £18m for Kevin Wimmer which would result in an annual charge in the accounts of £3.6m (assuming he’s on a 5 year contract). His value in the clubs accounts will probably be in the region of £11m now, having had two years of amortisation applied. If we chose to sell him for £1m now, we’d be crystalising an accounting loss of £10m in the current year’s accounts, obviously contributing to any annual loss for FFP purposes. This may be why we have chosen to loan out Imbula and Wimmer in previous seasons to avoid crystalising such a loss. Neatly put, I was going to mention transfer amortisation but you've put it so concisely there's no need for me to expand People have a skewed view of transfers as like lump sums just being deposited outside Clayton Wood, if people knew how much the executives have handcuffed this club over the last few years I think they'd be even more angry than they currently are!
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Jun 17, 2019 8:25:14 GMT
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Post by CBUFAWKIPWH on Jun 17, 2019 8:25:14 GMT
A sensible thread on the problem at last - but had to he club listened to the majority of fans who were berating the owners for inadequate net spend we'd be in a far worse position than we are now. Sustainability is not a dirty word and FFP (like climate change) is real.
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Jun 17, 2019 8:28:33 GMT
Post by estrangedsonoffaye on Jun 17, 2019 8:28:33 GMT
A sensible thread on the problem at last - but had to he club listened to the majority of fans who were berating the owners for inadequate net spend we'd be in a far worse position than we are now. Sustainability is not a dirty word and FFP (like climate change) is real. The owners can't be berated for their spending at all, they can be berated for their loyalty to certain members of the executive though. We missed our chance for a big spending return last season, we've got to do it the hard way now as you say.
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Jun 17, 2019 9:11:39 GMT
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Post by southcoaststokie on Jun 17, 2019 9:11:39 GMT
It’s also the reason why we can’t just cut our losses on the likes of Wimmer and Imbula. From an accounting perspective, the transfer fees paid are amortised over the length of their contract. So, we paid £18m for Kevin Wimmer which would result in an annual charge in the accounts of £3.6m (assuming he’s on a 5 year contract). His value in the clubs accounts will probably be in the region of £11m now, having had two years of amortisation applied. If we chose to sell him for £1m now, we’d be crystalising an accounting loss of £10m in the current year’s accounts, obviously contributing to any annual loss for FFP purposes. This may be why we have chosen to loan out Imbula and Wimmer in previous seasons to avoid crystalising such a loss. Thank you for that information can you tell me how ( if the stories are correct) , how this would apply to Berahino's sacking.
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Post by thebet365 on Jun 17, 2019 9:28:05 GMT
It’s also the reason why we can’t just cut our losses on the likes of Wimmer and Imbula. From an accounting perspective, the transfer fees paid are amortised over the length of their contract. So, we paid £18m for Kevin Wimmer which would result in an annual charge in the accounts of £3.6m (assuming he’s on a 5 year contract). His value in the clubs accounts will probably be in the region of £11m now, having had two years of amortisation applied. If we chose to sell him for £1m now, we’d be crystalising an accounting loss of £10m in the current year’s accounts, obviously contributing to any annual loss for FFP purposes. This may be why we have chosen to loan out Imbula and Wimmer in previous seasons to avoid crystalising such a loss. Thank you for that information can you tell me how ( if the stories are correct) , how this would apply to Berahino's sacking. Whatever Berahino's value is on the balance sheet sacking him would result in a loss of that value, much like scrapping a car. 1 Thing missing from Westyorkspotter post is that in our final season accounts for the premier league we charged a 29.7 Million impairment fee to the P & L. This means we've already wrote down most players values to closer to zero. It will have been done with FFP in mind, Much better to maximise our loss budget in the Prem than wait until they would normally occur in the years to come when the loss budget rules are lower.
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Jun 17, 2019 9:52:53 GMT
Post by Lakeland Potter on Jun 17, 2019 9:52:53 GMT
I don’t get why it would be a problem tbh. We’ve got rid of a shit tonne of wages. The 50% relegation wage cut seemed true. So the wages were around 90m in the PL weren’t they? So that’s down to 45m instantly. And since then we’ve got rid of Zouma and Jese who would have presumably been in on that. Choupo-Moting, Crouch, Shaq, Fletcher, Adam, Haugaard, Johnson, Ireland, Ramadan, Muniesa, Grant and Afellay off the books too. Throw in wage contributions for Wimmer, Badou and Imbula and I can’t see why we’d be struggling? If only it were so simple, bayern. Others on this thread are making the point as well as me. Wages were certainly part of the problem but the book value of players bought for millions more than they are now worth is just as great a problem. Whilst those players are still on the books the accounting practice of amortisation will automatically write their value down over the life of their contracts - in many cases 5 years. But, if we sell them for less than we paid for them, the amortisation goes out of the window and the loss appears in the current year's accounts. So basically we do need something like a Butland deal to compensate for what is likely to happen with Berahnio. We can cancel his contract and (if we manage to win any subesquent case he tries to bring against us) not have to worry about his wages but there will still be a big hit on his value in our accounts for which ever financial year his sacking falls in. It is a clear as the day is long that that there are severe problems with our profit and loss account. Hopefully a good sale figure for Butland and possibly Allen will help matters but, until at least one of those big sales goes through, the majority of signings are going to have to be from the bargain basement. Hopefully some of those will prove to be astute buys as we really could do without another Choupo Moting style of free transfer.
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Jun 17, 2019 9:58:18 GMT
Post by estrangedsonoffaye on Jun 17, 2019 9:58:18 GMT
I don’t get why it would be a problem tbh. We’ve got rid of a shit tonne of wages. The 50% relegation wage cut seemed true. So the wages were around 90m in the PL weren’t they? So that’s down to 45m instantly. And since then we’ve got rid of Zouma and Jese who would have presumably been in on that. Choupo-Moting, Crouch, Shaq, Fletcher, Adam, Haugaard, Johnson, Ireland, Ramadan, Muniesa, Grant and Afellay off the books too. Throw in wage contributions for Wimmer, Badou and Imbula and I can’t see why we’d be struggling? If only it were so simple, bayern. Others on this thread are making the point as well as me. Wages were certainly part of the problem but the book value of players bought for millions more than they are now worth is just as great a problem. Whilst those players are still on the books the accounting practice of amortisation will automatically write their value down over the life of their contracts - in many cases 5 years. But, if we sell them for less than we paid for them, the amortisation goes out of the window and the loss appears in the current year's accounts. So basically we do need something like a Butland deal to compensate for what is likely to happen with Berahnio. We can cancel his contract and (if we manage to win any subesquent case he tries to bring against us) not have to worry about his wages but there will still be a big hit on his value in our accounts for which ever financial year his sacking falls in. It is a clear as the day is long that that there are severe problems with our profit and loss account. Hopefully a good sale figure for Butland and possibly Allen will help matters but, until at least one of those big sales goes through, the majority of signings are going to have to be from the bargain basement. Hopefully some of those will prove to be astute buys as we really could do without another Choupo Moting style of free transfer. We have to take into account the parachute payments too, they drop this year from last and then cut in half next season too. When you bear in mind they boosted us by some 40 million quid last year that's quite a concern given the amortisation process is ongoing on Berahino, Wimmer and Imbula.... I think it's 55% then 45% then 20% so we're looking at 33 million or so this year then just 15 million if we don't go up this year. Then it really will bite.
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Jun 17, 2019 10:25:04 GMT
Post by abhill on Jun 17, 2019 10:25:04 GMT
I don't think the situation on amortisation is quite as straightforward as suggested. Yes, the initial treatment is to amortise the cost over the life of the contract but they also do an impairment review each year to decide whether a further write off is necessary to reduce the written down value to the actual value of the player. This additional write off was about £400k at the end of 16/17 and about £29 million at the end of 17/18. So the loss in the year of sale should not be as bad as indicated above because if a loss is expected - (Berahino, Wimmer, Imbula surely at the end of 17/18) then an estimate will already have been allowed as impairment and the written down value should be a fair estimate of the actual value at the date of the balance sheet.
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Jun 17, 2019 11:53:54 GMT
Post by Lakeland Potter on Jun 17, 2019 11:53:54 GMT
I don't think the situation on amortisation is quite as straightforward as suggested. Yes, the initial treatment is to amortise the cost over the life of the contract but they also do an impairment review each year to decide whether a further write off is necessary to reduce the written down value to the actual value of the player. This additional write off was about £400k at the end of 16/17 and about £29 million at the end of 17/18. So the loss in the year of sale should not be as bad as indicated above because if a loss is expected - (Berahino, Wimmer, Imbula surely at the end of 17/18) then an estimate will already have been allowed as impairment and the written down value should be a fair estimate of the actual value at the date of the balance sheet. I doubt very much if Berahino was included in the impairment calculation at the end of the 17/18 financial year. At that point Berahino was still regarded as having a future. He hadn't been loaned out nor were there any plans to either loan him out or invite offers to buy him. The tendency last season was to regard Berahino as a player who had suffered a dip in form which could be reversed rather than the total and utter wastrel which has has rightly come to be regarded as, after the season just ended.
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Jun 17, 2019 12:06:41 GMT
Post by bayernoatcake on Jun 17, 2019 12:06:41 GMT
I don’t get why it would be a problem tbh. We’ve got rid of a shit tonne of wages. The 50% relegation wage cut seemed true. So the wages were around 90m in the PL weren’t they? So that’s down to 45m instantly. And since then we’ve got rid of Zouma and Jese who would have presumably been in on that. Choupo-Moting, Crouch, Shaq, Fletcher, Adam, Haugaard, Johnson, Ireland, Ramadan, Muniesa, Grant and Afellay off the books too. Throw in wage contributions for Wimmer, Badou and Imbula and I can’t see why we’d be struggling? If only it were so simple, bayern. Others on this thread are making the point as well as me. Wages were certainly part of the problem but the book value of players bought for millions more than they are now worth is just as great a problem. Whilst those players are still on the books the accounting practice of amortisation will automatically write their value down over the life of their contracts - in many cases 5 years. But, if we sell them for less than we paid for them, the amortisation goes out of the window and the loss appears in the current year's accounts. So basically we do need something like a Butland deal to compensate for what is likely to happen with Berahnio. We can cancel his contract and (if we manage to win any subesquent case he tries to bring against us) not have to worry about his wages but there will still be a big hit on his value in our accounts for which ever financial year his sacking falls in. It is a clear as the day is long that that there are severe problems with our profit and loss account. Hopefully a good sale figure for Butland and possibly Allen will help matters but, until at least one of those big sales goes through, the majority of signings are going to have to be from the bargain basement. Hopefully some of those will prove to be astute buys as we really could do without another Choupo Moting style of free transfer. Wasn't that what the 30 million loss was for last season?
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Jun 17, 2019 12:29:58 GMT
Post by thebet365 on Jun 17, 2019 12:29:58 GMT
If only it were so simple, bayern. Others on this thread are making the point as well as me. Wages were certainly part of the problem but the book value of players bought for millions more than they are now worth is just as great a problem. Whilst those players are still on the books the accounting practice of amortisation will automatically write their value down over the life of their contracts - in many cases 5 years. But, if we sell them for less than we paid for them, the amortisation goes out of the window and the loss appears in the current year's accounts. So basically we do need something like a Butland deal to compensate for what is likely to happen with Berahnio. We can cancel his contract and (if we manage to win any subesquent case he tries to bring against us) not have to worry about his wages but there will still be a big hit on his value in our accounts for which ever financial year his sacking falls in. It is a clear as the day is long that that there are severe problems with our profit and loss account. Hopefully a good sale figure for Butland and possibly Allen will help matters but, until at least one of those big sales goes through, the majority of signings are going to have to be from the bargain basement. Hopefully some of those will prove to be astute buys as we really could do without another Choupo Moting style of free transfer. Wasn't that what the 30 million loss was for last season? By my extremely rough calcualtions. At the end of the relegation season we'd got 63 Million left on the assets for (Imbula,Allen,Berahino,Wimmer,N Daiye, Indi & Bauer). We've wrote just under half of that off.
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Jun 17, 2019 12:31:27 GMT
Post by bayernoatcake on Jun 17, 2019 12:31:27 GMT
Wasn't that what the 30 million loss was for last season? By my extremely rough calcualtions. At the end of the relegation season we'd got 63 Million left on the assets for (Imbula,Allen,Berahino,Wimmer,N Daiye, Indi & Bauer). We've wrote just under half of that off. And with Bauer, Allen and Indi you'd expect to get a chunk back in fees when sold anyway. Badou hopefully too.
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FFP
Jun 17, 2019 13:54:18 GMT
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Post by neddy on Jun 17, 2019 13:54:18 GMT
Surely its Butland we would wish to leave as under FFP if he’s worth say £5m in our books and we get £20m we have a profit after Brum get some?
With Wimmer Imbula and probably Badou, Berahino we’ll get less than the valuation in our accounts so a loss in the figures?
I’m thinking ideally we need to loan all those with wages covered and sell Butland?
Thoughts?
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