| Big Money signings 21:11 - Jan 15 with 7048 views | cressi |
Like most I thought this summer we may have broken our transfer record we have done exceptionally well considering we have not spent big.
My concern is we don't improve our first eleven but improve our squad understand ffp and all that but if money was spent now and we failed to go up we could sell a player in the summer to be within ffp. We may not get a better chance.
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| Big Money signings on 09:39 - Jan 16 with 1128 views | _clive_baker_ |
| Big Money signings on 21:20 - Jan 15 by xrayspecs |
FFP is a known issue - we lost £12m in L1 two seasons ago, a likely similar amount last season and have also invested heavily in our squad this season. Revenue up but so are costs.
The summer transfer window opens mid June but any sales would need to be before 30 June to count in this seasons accounts. We can lose a cumulative £39m over last three seasons.
Very few transfer deals are done before end June so if we failed to find a buyer in that two week window to balance the books, then we will breach rules - points deductions, transfer embargoes etc. Far too risky. [Post edited 15 Jan 2024 21:22]
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As you say I wouldn't be surprised if the loss to June 2023 is similar to the prior year, that will be public in the next few months and shouldn't come as a shock. Revenue will be significantly up this season though. The big contributing factor is obviously the TV money which jumps about 900% from L1 to Championship. The attendances and ticket prices are also up YoY, countless games on SKY and the FA cup run will certainly be helping as well with the prize money from beating Wimbledon (and hopefully Maidstone too), TV money for the BBC tie and potentially a big 5th round tie to come.
I wouldn't be surprised if revenue comes in close to £25m for the current financial year, up from 14.4m last season, of course that wont be publicly available until around Spring 2025. As you say costs will have gone up on promotion, salary increases, new signings, new contracts for McKenna and Chaplin etc. But I would think that loss will close to <10m in the current financial year.
It's all guess work with the information we have but I would imagine there's probably a little bit available to invest between now and June. Were there not I don't think we would've signed Travis vs prioritising a forward. It won't be a 5 million pound 40k a week player though. We can of course offset a proportion of any incoming wages by moving 1 or 2 on.
As you rightly say we're not going to be in a position where we can 'gamble' now by overspending with a view to correcting it in June. |  | | |
| Big Money signings on 09:47 - Jan 16 with 1102 views | _clive_baker_ |
| Big Money signings on 07:39 - Jan 16 by xrayspecs |
We know we lost £12m in 21/2, that is in the accounts. Most not all counts towards FFP.
Last season's (2022/23) wage bill (which is our main expense) would have been higher than the year before as we signed Davis, Harness, Camara, Clarke, Broadhead, Hirst and Mass, all of whom would have been on better money than the players who left us. Plus new contracts for a number of players. Plus around £4m in transfer fees. The only significant outgoing was Tyreece Simpson for £500k. Our commercial revenue would have been higher (ticket sales plus merchandise) but so was our outgoings. So, expect a similar loss for 22/3 vs 21/2.
Investment in infrastructure, such as monies spent on Staples, new pitches, ground improvements do not appear in the profit/loss reported in the accounts, these are treated as capital expenses, and do not count towards FFP.
This season follows a similar path to last one. Higher wages for incoming players versus those released and new contracts. Plus significant fees for Hirst and Taylor, loan fees for Williams, Scarlett, Omari, Travis and Sacrimento, and no significant outgoings. Commercial revenue likely to be a little higher due to price rises mainly, as attendances can only rise so much from last season. TV money is a biggie though, about £8m extra. Again, I would expect a significant amount of this to have already been eaten up by investment in players and salaries.
We will have some money but not the kind of cash to make a dramatic say £4-5m acquisition.
Responding to another post, no we cannot simply issue new shares. We could last season under the rules that applied in L1. However, in the Championship, it is a cumulative three year lost of £39m, which we will be close to hitting. [Post edited 16 Jan 2024 8:46]
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Should've read this before I posted as I've effectively regurgitated your thoughts. Completely agree with all of this. | | | |
| Big Money signings on 09:52 - Jan 16 with 1070 views | lurcher |
| Big Money signings on 21:17 - Jan 15 by FrimleyBlue |
Think it's obvious and in no way negative but we will have to sell in the summer if we don't go up.
If we lost 12.5 mill in the first year of take over. That's got to be close to ffp limit now.
But. It would then enable us to buy 2/3 players.
It would however mean we say goodbye to davis. Wolfenden and maybe Chaplin. |
I don't believe that is the case, the pension fund has been able to put a considerable sum of money into the club. They purchase shares that represent the clubs growth in value. That money all counts as revenue/profit. We are actually cash rich at the moment and well in the black. |  | | |
| Big Money signings on 09:57 - Jan 16 with 1055 views | tractorboy1978 |
| Big Money signings on 09:52 - Jan 16 by lurcher |
I don't believe that is the case, the pension fund has been able to put a considerable sum of money into the club. They purchase shares that represent the clubs growth in value. That money all counts as revenue/profit. We are actually cash rich at the moment and well in the black. |
No it doesn't count as revenue, not in the Championship. [Post edited 16 Jan 2024 9:57]
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| Big Money signings on 09:58 - Jan 16 with 1044 views | _clive_baker_ |
| Big Money signings on 21:17 - Jan 15 by FrimleyBlue |
Think it's obvious and in no way negative but we will have to sell in the summer if we don't go up.
If we lost 12.5 mill in the first year of take over. That's got to be close to ffp limit now.
But. It would then enable us to buy 2/3 players.
It would however mean we say goodbye to davis. Wolfenden and maybe Chaplin. |
I think it depends on the definition of 'need to sell'. I think it's more that we might choose to sell to get a net improvement to the current squad, and we won't be in a position to do that without trading. i.e. we might decide losing Davis for 15m is a price worth paying if it means we can bring in 2 or 3 players for a few million each and generate the revenue to support a higher cost base.
I don't think we'll be in a position where we need to sell to close a gap to FFP. I would estimate where were tracking now is broadly in line with our permissible losses. | | | |
| Big Money signings on 10:00 - Jan 16 with 1037 views | NthQldITFC |
| Big Money signings on 07:12 - Jan 16 by Horsham |
Tiresome waffle, light on facts and repeating the same old inaccurate sound bites. |
I suspect most of the forum have, like me, got that waste of space on ignore. Up to you of course, but if the rest of you did the same we'd not even have to see his name and he could cough out his disillusioned Trill-laden outbursts at himself. |  |
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| Big Money signings on 10:00 - Jan 16 with 1033 views | tractorboy1978 |
| Big Money signings on 09:39 - Jan 16 by _clive_baker_ |
As you say I wouldn't be surprised if the loss to June 2023 is similar to the prior year, that will be public in the next few months and shouldn't come as a shock. Revenue will be significantly up this season though. The big contributing factor is obviously the TV money which jumps about 900% from L1 to Championship. The attendances and ticket prices are also up YoY, countless games on SKY and the FA cup run will certainly be helping as well with the prize money from beating Wimbledon (and hopefully Maidstone too), TV money for the BBC tie and potentially a big 5th round tie to come.
I wouldn't be surprised if revenue comes in close to £25m for the current financial year, up from 14.4m last season, of course that wont be publicly available until around Spring 2025. As you say costs will have gone up on promotion, salary increases, new signings, new contracts for McKenna and Chaplin etc. But I would think that loss will close to <10m in the current financial year.
It's all guess work with the information we have but I would imagine there's probably a little bit available to invest between now and June. Were there not I don't think we would've signed Travis vs prioritising a forward. It won't be a 5 million pound 40k a week player though. We can of course offset a proportion of any incoming wages by moving 1 or 2 on.
As you rightly say we're not going to be in a position where we can 'gamble' now by overspending with a view to correcting it in June. |
Totally agree with your analysis.
I think what people often forget though is that transfer fees are accounted for over the length of the contract, so a £5m player signed on a 4 year contract today is only £625k amortisation cost in the year ended 30 June 2024 accounts.
If we don't go up I expect Davis will be sold for big money which would give us big scope next summer. | | | |
| Big Money signings on 10:02 - Jan 16 with 1023 views | _clive_baker_ |
| Big Money signings on 10:00 - Jan 16 by NthQldITFC |
I suspect most of the forum have, like me, got that waste of space on ignore. Up to you of course, but if the rest of you did the same we'd not even have to see his name and he could cough out his disillusioned Trill-laden outbursts at himself. |
High time he was put on a permanent ignore for all of us if you ask me.
Obvious troll, spreading tedious mistruths and regurgitating the same boring soundbites. | | | |
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| Big Money signings on 10:07 - Jan 16 with 1000 views | hype313 |
| Big Money signings on 10:02 - Jan 16 by _clive_baker_ |
High time he was put on a permanent ignore for all of us if you ask me.
Obvious troll, spreading tedious mistruths and regurgitating the same boring soundbites. |
Adds nothing, same old inane drivel, clearly not a fan of ITFC, needs a banhammer if you ask me.
Makes the place unpleasant, most of us have the drongo on ignore, but unfortunately some don't, so we still see his nonsense on a daily basis. |  |
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| Big Money signings on 10:11 - Jan 16 with 985 views | xrayspecs |
| Big Money signings on 09:52 - Jan 16 by lurcher |
I don't believe that is the case, the pension fund has been able to put a considerable sum of money into the club. They purchase shares that represent the clubs growth in value. That money all counts as revenue/profit. We are actually cash rich at the moment and well in the black. |
No.
The owners could inject into the club via share issues under the SMCP (?) rules that existed when we were in L1.
In the Championship (and Premier League), the rules are different, you must operate within allowable loss limits. Owners buying share does not count as revenue, so would not impact declared losses. | | | |
| Big Money signings on 10:11 - Jan 16 with 981 views | Dennyx4 |
| Big Money signings on 10:00 - Jan 16 by tractorboy1978 |
Totally agree with your analysis.
I think what people often forget though is that transfer fees are accounted for over the length of the contract, so a £5m player signed on a 4 year contract today is only £625k amortisation cost in the year ended 30 June 2024 accounts.
If we don't go up I expect Davis will be sold for big money which would give us big scope next summer. |
Great point on the amortisation rules, believe this was why Ashton said we broke even on transfers the season before last, as the sales of academy players go into the accounts straight away.
That would have included Dozzell, Downes and Gibbs.
In League One, owners putting money in was allowed as part of the financial rules and also I believe purchase / improvement of the ground and training facilities does not count towards FFP. It does make it difficult to calculate the actual wriggle room we have, and as a club, it is not something that you want to be public knowledge, as will hinder any bargaining power you may have, when buying or selling. |  | | |
| Big Money signings on 10:15 - Jan 16 with 950 views | Guthrum |
| Big Money signings on 23:25 - Jan 15 by Guthrum |
Those are the internal stresses of the system. There is pressure and incentive to overspend, but it's also punished and/or results in financial disaster. Prem failures are given a helping hand, everyone else (especially the freshly promoted from below) is at a disadvantage.
The only way around it is to be clever, to pick up the undervalued and the overlooked, while cultivating good contacts with the Prem to attract their best young talent on loan. Plus having a Manager who can forge a good team, more than the sum of its parts, rather than relying purely on individual skilled players. |
That's not to say our players lack skill. Week after week we see them doing outrageously good things. But they weren't generally known for that at the point we hired them. That has come from training and the instilling of confidence to play to their maximum ability. |  |
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| Big Money signings on 10:17 - Jan 16 with 937 views | hoppy |
| Big Money signings on 10:00 - Jan 16 by NthQldITFC |
I suspect most of the forum have, like me, got that waste of space on ignore. Up to you of course, but if the rest of you did the same we'd not even have to see his name and he could cough out his disillusioned Trill-laden outbursts at himself. |
You just made me scroll back up to see what I'd typed, but fortunately realised you weren't talking about me in this instance. Phew.
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| Big Money signings on 10:19 - Jan 16 with 920 views | xrayspecs |
| Big Money signings on 10:00 - Jan 16 by tractorboy1978 |
Totally agree with your analysis.
I think what people often forget though is that transfer fees are accounted for over the length of the contract, so a £5m player signed on a 4 year contract today is only £625k amortisation cost in the year ended 30 June 2024 accounts.
If we don't go up I expect Davis will be sold for big money which would give us big scope next summer. |
You are right that fees are accounted for over a number of financial years.
While it makes it easier to spread payments into future financial years, the flip side is that you may still need to make payments for players you signed in previous seasons.
In this financial year, we will be paying instalments on new signings (Hirst and Taylor) along with instalments owed from signings last season (Davis, Harness, Camara, Clarke and Broadhead) and quite likely signings we made the season before (Burgess, Chaplin, Edmundson, Morsy, Walton, Burns, Vas, others). Which all adds up.
In response to the poster who referenced Ashtons net zero comment. I suspect you are right - the monies (in full) for Downes, Simpson, Gibbs, Dozzell, would have likely covered what we have spent (so far) on the players we have signed. it would not include monies still owed which falls due in this and subsequent financial years. Since GC took over, and ignoring when payments are made we have signed players for more money than we have sold players. At some point, that will become clear in the accounts. [Post edited 16 Jan 2024 10:24]
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| Big Money signings on 10:20 - Jan 16 with 919 views | Battersea_Blue |
Also don't forget any sell on clauses that actually happen, such as Downes moving from Swansea to West Ham. According to Wikpedia this occurred on July 7th, 2022, so whatever our sell on clause amounted to will count in our 22/23 figures. | | | |
| Big Money signings on 10:22 - Jan 16 with 911 views | hype313 |
| Big Money signings on 10:20 - Jan 16 by Battersea_Blue |
Also don't forget any sell on clauses that actually happen, such as Downes moving from Swansea to West Ham. According to Wikpedia this occurred on July 7th, 2022, so whatever our sell on clause amounted to will count in our 22/23 figures. |
Where's Rachel Riley when you need her.
And a decent mathematician. | |
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| Big Money signings on 10:24 - Jan 16 with 893 views | _clive_baker_ |
| Big Money signings on 10:00 - Jan 16 by tractorboy1978 |
Totally agree with your analysis.
I think what people often forget though is that transfer fees are accounted for over the length of the contract, so a £5m player signed on a 4 year contract today is only £625k amortisation cost in the year ended 30 June 2024 accounts.
If we don't go up I expect Davis will be sold for big money which would give us big scope next summer. |
Quite. From an accounting perspective if something meets the definition of an asset, it would be capitalised and expensed to the P&L over it's useful life, rather than when the cost was incurred. If the club bought a tractor and it were deemed to have a useful life of 5 years, the cost would be expensed to the P&L over that period.
I think it's reasonable that players are considered in that respect from a FFP perspective. Using the length of a players contract is appropriate as determining a fair-market-value of a player is very difficult, it's not like a car. Although it does mean you see Chelsea giving players 10 year deals to try and reduce their expense. More fool them if they're stuck paying the wages of unwanted players in a few years though. Sadly they'll probably just loan them out year after year. | | | |
| Big Money signings on 10:27 - Jan 16 with 883 views | xrayspecs |
| Big Money signings on 10:20 - Jan 16 by Battersea_Blue |
Also don't forget any sell on clauses that actually happen, such as Downes moving from Swansea to West Ham. According to Wikpedia this occurred on July 7th, 2022, so whatever our sell on clause amounted to will count in our 22/23 figures. |
True.
Also worth noting that Jack Taylor signed at the end of June 2023, so the initial payment will appear in our 22/23 accounts.
That looks like Peterborough needed cash before the end of the last financial year, to help balance their books. | | | |
| Big Money signings on 10:32 - Jan 16 with 865 views | _clive_baker_ |
| Big Money signings on 10:19 - Jan 16 by xrayspecs |
You are right that fees are accounted for over a number of financial years.
While it makes it easier to spread payments into future financial years, the flip side is that you may still need to make payments for players you signed in previous seasons.
In this financial year, we will be paying instalments on new signings (Hirst and Taylor) along with instalments owed from signings last season (Davis, Harness, Camara, Clarke and Broadhead) and quite likely signings we made the season before (Burgess, Chaplin, Edmundson, Morsy, Walton, Burns, Vas, others). Which all adds up.
In response to the poster who referenced Ashtons net zero comment. I suspect you are right - the monies (in full) for Downes, Simpson, Gibbs, Dozzell, would have likely covered what we have spent (so far) on the players we have signed. it would not include monies still owed which falls due in this and subsequent financial years. Since GC took over, and ignoring when payments are made we have signed players for more money than we have sold players. At some point, that will become clear in the accounts. [Post edited 16 Jan 2024 10:24]
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I don't think cash flow is going to be a problem for us. The owners have very deep pockets, we've got nothing to worry about in that respect. | | | |
| Big Money signings on 10:36 - Jan 16 with 846 views | NthQldITFC |
| Big Money signings on 10:17 - Jan 16 by hoppy |
You just made me scroll back up to see what I'd typed, but fortunately realised you weren't talking about me in this instance. Phew.
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I was a little concerned that no-one would see what I'd written myself. | |
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| Big Money signings on 10:37 - Jan 16 with 841 views | xrayspecs |
| Big Money signings on 10:32 - Jan 16 by _clive_baker_ |
I don't think cash flow is going to be a problem for us. The owners have very deep pockets, we've got nothing to worry about in that respect. |
Cash flow is of no concern. Indeed, the owners invested circa £50m last summer, on top of £42m the summer before (EDITED - correct amounts added)..
My point was that this years financial results will include not just the first instalments on fees for players signed this season but significant fees for players signed in previous seasons. [Post edited 16 Jan 2024 10:58]
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| Big Money signings on 10:45 - Jan 16 with 800 views | _clive_baker_ |
| Big Money signings on 10:37 - Jan 16 by xrayspecs |
Cash flow is of no concern. Indeed, the owners invested circa £50m last summer, on top of £42m the summer before (EDITED - correct amounts added)..
My point was that this years financial results will include not just the first instalments on fees for players signed this season but significant fees for players signed in previous seasons. [Post edited 16 Jan 2024 10:58]
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Got you. Yes any signings we make will see their transfer fees expensed over the length of their contracts. Unless they're sold or released, at which point the remainder would be expensed immediately reflecting either a profit or loss on disposal.
That's where it can also get a bit more nuanced. If we bought someone for 3m on a 4 year deal and cut our losses after a year and sold them for 1m, we would only have amortised 25% / 750k of the transfer fee to the P&L. So despite selling them for 1m, we would actually have to reflect a 1.25m loss on disposal.
This is where robust financial planning is very important, especially with the potential punishments of not remaining compliant. | | | |
| Big Money signings on 10:54 - Jan 16 with 771 views | Dennyx4 |
| Big Money signings on 10:45 - Jan 16 by _clive_baker_ |
Got you. Yes any signings we make will see their transfer fees expensed over the length of their contracts. Unless they're sold or released, at which point the remainder would be expensed immediately reflecting either a profit or loss on disposal.
That's where it can also get a bit more nuanced. If we bought someone for 3m on a 4 year deal and cut our losses after a year and sold them for 1m, we would only have amortised 25% / 750k of the transfer fee to the P&L. So despite selling them for 1m, we would actually have to reflect a 1.25m loss on disposal.
This is where robust financial planning is very important, especially with the potential punishments of not remaining compliant. |
I guess it shows the benefit of a good academy. Chelsea are using theirs to get the full money onto the books in the current financial year.
If we are close to FFP, I guess it means Woolfenden is a valuable asset, that if sold would create instant value to help balance the books quickly.
I assume that is why Norwich sold Aaron’s and Ombiadele (sic) in the summer, money straight into the accounts. | | | |
| Big Money signings on 10:55 - Jan 16 with 766 views | Battersea_Blue |
| Big Money signings on 10:27 - Jan 16 by xrayspecs |
True.
Also worth noting that Jack Taylor signed at the end of June 2023, so the initial payment will appear in our 22/23 accounts.
That looks like Peterborough needed cash before the end of the last financial year, to help balance their books. |
Exactly. It's one big merry-go-round on the financial side and having contracts signed and staged payments at the appropriate time to best suit FFP. | | | |
| Big Money signings on 11:06 - Jan 16 with 739 views | xrayspecs |
| Big Money signings on 10:45 - Jan 16 by _clive_baker_ |
Got you. Yes any signings we make will see their transfer fees expensed over the length of their contracts. Unless they're sold or released, at which point the remainder would be expensed immediately reflecting either a profit or loss on disposal.
That's where it can also get a bit more nuanced. If we bought someone for 3m on a 4 year deal and cut our losses after a year and sold them for 1m, we would only have amortised 25% / 750k of the transfer fee to the P&L. So despite selling them for 1m, we would actually have to reflect a 1.25m loss on disposal.
This is where robust financial planning is very important, especially with the potential punishments of not remaining compliant. |
Fortunately, or good recruitment, means loss on disposals to date should be relatively low.
Of the players we have signed for decent fees, we may have lost money on Scott Frazer (although I vaguely recall someone saying we got back roughly what we paid for him). Possibly lost some money on Rakeem Harper (bought for £500k) and left on a free?
Other than that Kyle Edwards would have been out of contract this summer, as will be Panutche Camara, so would likely have no transfer fee instalments pending.
It is also a good reason not to gamble big on players and then need to absorb an unwelcome financial loss. | | | |
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