Discussion in 'Arsenal Talk' started by TheLoneFalcon, Sep 22, 2014.
I wonder if the Kronke apologists who say owners cannot finance clubs have read this?
So from an accounting point of view a purchase isn't seen as an immediate loss because of asset gain but how does FFP view it? If we spent all our cash reserves on 3 players say. Would we need to just generate enough to balance their yearly cost as well as all our other costs?
unfortunately you've maxed out my knowledge on the matter ... i have no clue how FFP analyzes transfers (i.e. whether it's an income statement approach or a cash flow approach). if it's income statement, then your theory could possibly be correct.
I'm not an FFP expert but my understanding is that it's income statement approach (i.e. amortisation)
If that was truly the case then why wouldn't the club make use of it's £50m line of credit facility - that's precisely what it's for, working capital requirements.
The club is far too conservative.
Hopefully they have learned that their conservative approach has been harmful
I've been noticing this phenomenon online and offline that's starting to disturb me.
People talking about spending 40M pounds on a player and stating that we have to pay all the money up front.
Then there's the group that thinks just because we bid 40M for a player but pay something like 8M pounds a year, we could buy 5 players worth 40M in one summer............
Are these common misconceptions? As far as I'm aware no club has ever paid a transfer fee all upfront. Even the ones that have the money to do so.
Secondly, transfer budgets aren't calculated based on paying by installments.
Ah yes, it was an article in the Sun where I saw this notion, on their back page earlier this week, there was an article about how Palace was fuming that we proposed a deal for Zaha where we would pay 40M over a five year period. I was just thinking, isn't that how each and every single transfer is done?
For example, I'm fairly certain that Barcelona took years to pay us for Cesc.
Yeah most are paid in instalments, bar maybe release clauses. It’s not as simple as saying we’ll pay £20m a year for 4 years when you buy a player for £80m though. The selling club might only accept £40m year one, £30m year two, £5m year three/four etc.
Do you have proof of this? Most release clauses have a high fee that requires paying up front. It wouldn’t make sense that clubs are paying huge fees upfront and smaller fees in installments.
He just said that .
People get their education through newspapers like The Sun, and as soon as they read some stupidity there, they come to the forum to write crap.
It gets even worse these days with all the Twitter rumours.
You are probably right about paying by installments although we can't be sure because none of us ever worked on dealing with football transfers.
Every year newspapers set the budget for us and people blindly follow that without taking things that you're saying into consideration.
There is also a wage problem nobody mentions. People think that we take a chunk of reported transfer budget and that's enough to make a deal, but what about the wages that we're going to pay for the next 5 years and agent fees? Do they magically appear every time we take a chunk of our transfer budget to buy a new player? Guess not, and I think this club struggles more with wages than with actual transfer budget. I think that's where Özil's contract really kicks in. When you have a contract like that you will struggle to keep the players you have as much as you will struggle to sign new players for a fair salary.
Doesn’t make good reading
Good. It means the club is forced to find new revenue streams not dependent on player sales of Champions League qualifications.
The best time to reform is before a recession; a recession is often the time reforms occur.
Broken record here. But **** the Emirates stadium.
we need big stadium because we have big fan base but you clearly want an owner that will care about the club.
The Emirates was the single worst decision that i can think off.
Other than being new and holding in excess of 60k it hasnt delivered anything else that it was forecast to do so. Its done the complete opposite. Players are nearly as expensive as what that stadium cost. Absolute shambles of a decision that has set us back massively on and off the pitch.
It was mainly about the long-term commercial deals the club tied itself down to, for "revenue certainty", against the "risk" of the stadium move. Commercial revenue therefore was pretty static until 2014 while other clubs were seeing theirs rise, so the advantage of having expanded stadium capacity ahead of most of the rest in the PL was somewhat lost. I also think there was quite a bit of underestimation of just how much TV revenues and prize money would rise in general, which would have rendered the more conservative approach, tying down to long-term commercial deals, somewhat unnecessary. In summary, it was therefore not so much about the new stadium, but more how we went about it.
Blaming the stadium? We've been mismanaged commercially and in terms of personnel since the Özil deal. Stadium pain pretty much ended in 2014 after the new TV deals kicked in. The new deals affect us as well, we get the increased revenue same as everyone else. If you look at the financial statement we do less than 9 million pounds yearly on the fixed rate bonds. The variable rate bonds aren't being paid back right now from the looks of it and we need about 30 million in the bank for debt servicing guarantees. The stadium generates over 100 million a year, it comfortably pays for itself.
We have a EL squad on UCL wages and too many assets past their prime or just plain not good enough. We've invested what we had poorly and not recouped any money from sales, that's about it. The bulk of these problems are from the previous regime. The new guys maybe f***ed up on the Ramsey contract. Whether that decision bites us remains to be seen.
Now as a reaction, we're too cautious to spend any money in year 3 of EL football. It's probably going to be another year until we see this lot can function properly with Edu coming in, but Emery's future is going to be up in the air.
Thanks for posting. Not the most uplifting over my morning coffee...
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