| Can we afford it? 20:15 - Aug 20 with 5407 views | TheBluesmith |
Apologies if there’s already been a discussion on this but I’m just wary of the level of fees and wages we must be aggregating to.
I’m loving the business we’re doing, especially with coach McKenna at the helm, and I get that:
1. We’re signing players with age on their side and huge resale potential
2. The “loan with obligation to buy if we stay up” model financially derisks the three big loans
3. We are going with longish contracts to amortise the costs
4. We have the money from the US
5. Ashton is a shrewd custodian
But does that cover us? I’d hope it does.Just really don’t want to do a Forest and remember the Sheepshank years of financial pain which hamstrung us until Evans came along. [Post edited 20 Aug 2024 20:34]
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| Can we afford it? on 20:19 - Aug 20 with 4955 views | redrickstuhaart |
The purse strings are not held by Ashton.
If we couldnt afford it, our owner (which needs to make a profit in the long term, rather than seeing the club as a plaything) would not be doing it. | | | |
| Can we afford it? on 20:23 - Aug 20 with 4881 views | Nthsuffolkblue |
What lessons did Ashton have to learn from Brizzle? Did they go into administration or get a points deduction?
I am confident we are well aware of the rules and spending within them. I would be interested to see our spending up against that of each of the other Premier League clubs. £20M seems nothing more than an average Premier League transfer fee with many being much higher. I believe that is the most we have spent and only done that twice (so far) as far as I am aware. |  |
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| Can we afford it? on 20:23 - Aug 20 with 4878 views | TheBluesmith |
| Can we afford it? on 20:19 - Aug 20 by redrickstuhaart |
The purse strings are not held by Ashton.
If we couldnt afford it, our owner (which needs to make a profit in the long term, rather than seeing the club as a plaything) would not be doing it. |
Fair point. You could say that Clearlake capital also needs to make a return for its underlying investors too… but the three years of Gamechanger have shown us that they’re certainly no Boehly. | | | |
| Can we afford it? on 20:37 - Aug 20 with 4681 views | TheBluesmith |
| Can we afford it? on 20:23 - Aug 20 by Nthsuffolkblue |
What lessons did Ashton have to learn from Brizzle? Did they go into administration or get a points deduction?
I am confident we are well aware of the rules and spending within them. I would be interested to see our spending up against that of each of the other Premier League clubs. £20M seems nothing more than an average Premier League transfer fee with many being much higher. I believe that is the most we have spent and only done that twice (so far) as far as I am aware. |
Fair point on Ashton at Bristol, I was misinformed (had thought he overspent there) and have removed that comment.
Agree that none of the transfers have been huge relatively speaking, more just thinking of the aggregate spend. Either way, agree with you that ITFC will be aware of the rules and keen not to break them. | | | |
| Can we afford it? on 21:08 - Aug 20 with 4461 views | ArnoldMoorhen |
Sheepshanks hardly spaffed cash.
He backed the Manager of the Year, moderately, so that we could augment the squad to play in Europe midweek as well as the Prem on a Saturday.
The one thing I think he got wrong was to press forward with redeveloping both stands consecutively.
If he had just done one then we would have had sufficient cashflow in the event of relegation.
And, without a dead wall at one end of the ground for many games, we may have milked the atmosphere and sneaked an extra point at home.
Sigh...
All the sweeter now, of course! | | | |
| Can we afford it? on 21:11 - Aug 20 with 4405 views | Nthsuffolkblue |
| Can we afford it? on 21:08 - Aug 20 by ArnoldMoorhen |
Sheepshanks hardly spaffed cash.
He backed the Manager of the Year, moderately, so that we could augment the squad to play in Europe midweek as well as the Prem on a Saturday.
The one thing I think he got wrong was to press forward with redeveloping both stands consecutively.
If he had just done one then we would have had sufficient cashflow in the event of relegation.
And, without a dead wall at one end of the ground for many games, we may have milked the atmosphere and sneaked an extra point at home.
Sigh...
All the sweeter now, of course! |
It was building the new stand that cost us splitting up the team Robson had built too. Here's hoping that the third attempt is far less costly in the short term. | |
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| Can we afford it? on 22:22 - Aug 20 with 4007 views | ArnieM |
What ARE we allowed to spend in the PL and be within the financial constraints, anyone know? |  |
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| Can we afford it? on 22:27 - Aug 20 with 3941 views | BseaBlue |
I was listening to an interview on Talksport with the Brighton CEO and he was quick to emphasise their model of investing in players to sell in the future.
Our strategy is clearly similar when you look at the age bracket and potential of the players we have signed. I'd be very suprised if we don't end up with a net profit down the line as you only really need two of them to excel to make a fair chunk of it back.
Plus you have the risk versus reward on taking the gamble to stay up. |  | | |
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| Can we afford it? on 22:29 - Aug 20 with 3907 views | burnbudgiesburn |
| Can we afford it? on 22:22 - Aug 20 by ArnieM |
What ARE we allowed to spend in the PL and be within the financial constraints, anyone know? |
We can make a rolling loss of £61m over 3 years currently | | | |
| Can we afford it? on 22:36 - Aug 20 with 3826 views | pointofblue |
| Can we afford it? on 21:08 - Aug 20 by ArnoldMoorhen |
Sheepshanks hardly spaffed cash.
He backed the Manager of the Year, moderately, so that we could augment the squad to play in Europe midweek as well as the Prem on a Saturday.
The one thing I think he got wrong was to press forward with redeveloping both stands consecutively.
If he had just done one then we would have had sufficient cashflow in the event of relegation.
And, without a dead wall at one end of the ground for many games, we may have milked the atmosphere and sneaked an extra point at home.
Sigh...
All the sweeter now, of course! |
In Sheepshanks' defence, he had budgeted for ITV Digital money in the case of relegation. In the end, they went bust and the money wasn't there. The three clubs who went down in 2001/2002 (ourselves, Derby and Leicester) all went into administration shortly afterwards. | |
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| Can we afford it? on 22:57 - Aug 20 with 3601 views | redrickstuhaart |
| Can we afford it? on 22:36 - Aug 20 by pointofblue |
In Sheepshanks' defence, he had budgeted for ITV Digital money in the case of relegation. In the end, they went bust and the money wasn't there. The three clubs who went down in 2001/2002 (ourselves, Derby and Leicester) all went into administration shortly afterwards. |
That money was modest in the scheme of things.
He was not straightforward when he claimed that the stands would not affect the playing side. Nor was he very honest about "temporary and voluntary administration".
The stands were a massive mistake. Made with the best of intentions, but a mistake nevertheless. | | | |
| Can we afford it? on 07:20 - Aug 21 with 3205 views | tractorboy1978 |
In terms of amortisation/loan fees hitting the P&L for this year on new signings, I make it:
Delap - £3m (based on £15m initial fee, 5 years)
Hutchinson - £3.6m (based on £18m initial fee, 5 years)
Greaves - £3m (based on £15m inital fee, 5 years)
Townsend - £250k (based on £500k initial fee, 2 years)
Szmodics - £2.25m (based on £9m initial fee, 4 years)
Muric - £2m (based on £8m initial fee, 4 years)
Phillips - £7m loan fee (saw this reported somewhere)
Broja - £5m loan fee (reported covering his wages of £100k p/w)
Cajuste - £1.3m loan fee (as reported)
I make that £27.4m. Obviously for the permanent signings you will have wages/signing on fees on top of that. However, that feels a little less scary than thinking about the headline figure being spent this summer. | | | |
| Can we afford it? on 07:36 - Aug 21 with 3095 views | jonnysuave |
| Can we afford it? on 22:22 - Aug 20 by ArnieM |
What ARE we allowed to spend in the PL and be within the financial constraints, anyone know? |
My thoughts exactly + how often have we seen so many signings gel that quickly...
Anyway, this from Sky Sports
Make 'allowable' losses of up to £5m/season (averaged over three seasons)
Increase that figure to £35m/year with owner investment (averaged over three seasons)
Spread out any transfer costs over a maximum of five years
So with owner investment we can make allowable losses of £105M over 3 years.
Prudent |  | | |
| Can we afford it? on 08:27 - Aug 21 with 2850 views | SmithersJones |
| Can we afford it? on 07:36 - Aug 21 by jonnysuave |
My thoughts exactly + how often have we seen so many signings gel that quickly...
Anyway, this from Sky Sports
Make 'allowable' losses of up to £5m/season (averaged over three seasons)
Increase that figure to £35m/year with owner investment (averaged over three seasons)
Spread out any transfer costs over a maximum of five years
So with owner investment we can make allowable losses of £105M over 3 years.
Prudent |
The £35m refers to seasons in the Prem. In the EFL it’s £13m a season. So (as BBB states above) for us it’s £61m at the moment, not £105m. | | | |
| Can we afford it? on 08:42 - Aug 21 with 2732 views | ArnieM |
| Can we afford it? on 22:29 - Aug 20 by burnbudgiesburn |
We can make a rolling loss of £61m over 3 years currently |
Achievable is probably not quite the right word, but I’m suspecting losses have been heavily factored into our current buying spree…. | |
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| Can we afford it? on 09:00 - Aug 21 with 2611 views | Simonds92 |
| Can we afford it? on 07:20 - Aug 21 by tractorboy1978 |
In terms of amortisation/loan fees hitting the P&L for this year on new signings, I make it:
Delap - £3m (based on £15m initial fee, 5 years)
Hutchinson - £3.6m (based on £18m initial fee, 5 years)
Greaves - £3m (based on £15m inital fee, 5 years)
Townsend - £250k (based on £500k initial fee, 2 years)
Szmodics - £2.25m (based on £9m initial fee, 4 years)
Muric - £2m (based on £8m initial fee, 4 years)
Phillips - £7m loan fee (saw this reported somewhere)
Broja - £5m loan fee (reported covering his wages of £100k p/w)
Cajuste - £1.3m loan fee (as reported)
I make that £27.4m. Obviously for the permanent signings you will have wages/signing on fees on top of that. However, that feels a little less scary than thinking about the headline figure being spent this summer. |
Lots of mention of this way of devaluing the initial spend, but can we actually do that if the deal isn't structured in that way with the selling club?
I understand it is normal business practice but I am sure that is exactly what Mel Morris did at Derby and that's what got them a load of charges. I think the actual deals have to be structured in a way that we only pay x amount at different intervals. Therefore it may well reduce our initial spend but not as much as everyone is expecting. Delap for example won't be paid off over 5 years, it might be £5m every 6 months for 18 months. | | | |
| Can we afford it? on 09:18 - Aug 21 with 2503 views | JammyDodgerrr |
| Can we afford it? on 09:00 - Aug 21 by Simonds92 |
Lots of mention of this way of devaluing the initial spend, but can we actually do that if the deal isn't structured in that way with the selling club?
I understand it is normal business practice but I am sure that is exactly what Mel Morris did at Derby and that's what got them a load of charges. I think the actual deals have to be structured in a way that we only pay x amount at different intervals. Therefore it may well reduce our initial spend but not as much as everyone is expecting. Delap for example won't be paid off over 5 years, it might be £5m every 6 months for 18 months. |
How the cash is paid vs how the cost is recorded in the accounts is different. We will be accrual accounting, which will representing the cost over our own defined time period. |  |
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| Can we afford it? on 09:25 - Aug 21 with 2454 views | tractorboy1978 |
| Can we afford it? on 09:00 - Aug 21 by Simonds92 |
Lots of mention of this way of devaluing the initial spend, but can we actually do that if the deal isn't structured in that way with the selling club?
I understand it is normal business practice but I am sure that is exactly what Mel Morris did at Derby and that's what got them a load of charges. I think the actual deals have to be structured in a way that we only pay x amount at different intervals. Therefore it may well reduce our initial spend but not as much as everyone is expecting. Delap for example won't be paid off over 5 years, it might be £5m every 6 months for 18 months. |
You account for transfer fees over the length of the contract. | | | |
| Can we afford it? on 09:31 - Aug 21 with 2402 views | gainsboroughblue |
| Can we afford it? on 22:22 - Aug 20 by ArnieM |
What ARE we allowed to spend in the PL and be within the financial constraints, anyone know? |
Depends who you are I think. |  |
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| Can we afford it? on 09:42 - Aug 21 with 2304 views | suffolkpoker |
| Can we afford it? on 07:20 - Aug 21 by tractorboy1978 |
In terms of amortisation/loan fees hitting the P&L for this year on new signings, I make it:
Delap - £3m (based on £15m initial fee, 5 years)
Hutchinson - £3.6m (based on £18m initial fee, 5 years)
Greaves - £3m (based on £15m inital fee, 5 years)
Townsend - £250k (based on £500k initial fee, 2 years)
Szmodics - £2.25m (based on £9m initial fee, 4 years)
Muric - £2m (based on £8m initial fee, 4 years)
Phillips - £7m loan fee (saw this reported somewhere)
Broja - £5m loan fee (reported covering his wages of £100k p/w)
Cajuste - £1.3m loan fee (as reported)
I make that £27.4m. Obviously for the permanent signings you will have wages/signing on fees on top of that. However, that feels a little less scary than thinking about the headline figure being spent this summer. |
What happens if we get relegated?
How do we afford to pay it? We only get 1 years worth or paracute payments. |  |
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| Can we afford it? on 09:46 - Aug 21 with 2280 views | Kievthegreat |
| Can we afford it? on 09:00 - Aug 21 by Simonds92 |
Lots of mention of this way of devaluing the initial spend, but can we actually do that if the deal isn't structured in that way with the selling club?
I understand it is normal business practice but I am sure that is exactly what Mel Morris did at Derby and that's what got them a load of charges. I think the actual deals have to be structured in a way that we only pay x amount at different intervals. Therefore it may well reduce our initial spend but not as much as everyone is expecting. Delap for example won't be paid off over 5 years, it might be £5m every 6 months for 18 months. |
The correct way of accounting is to take the value at the start and divide it over the years of the contract. So £20m player signed for 4 years is £5m loss per year.
What Morris did was a mix of doing it as a taper and not a straight line, but also by including options in the equation. I.e buying a player on a 4 year contract with an option for 1 extra year, but accounting for the transfer fee like it was a 5 year contract.
When accounting profit and loss like this, it's irrelevant whether the initial fee is paid immediately or in installments. |  | | |
| Can we afford it? on 09:54 - Aug 21 with 2219 views | ITFC_Forever |
| Can we afford it? on 09:42 - Aug 21 by suffolkpoker |
What happens if we get relegated?
How do we afford to pay it? We only get 1 years worth or paracute payments. |
Why would we only get 1 year of parachute payments? |  |
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| Can we afford it? on 10:02 - Aug 21 with 2174 views | Steve_M |
| Can we afford it? on 09:54 - Aug 21 by ITFC_Forever |
Why would we only get 1 year of parachute payments? |
Because we would be going straight back up?? [Post edited 21 Aug 2024 10:47]
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| Can we afford it? on 10:11 - Aug 21 with 2096 views | baxterbasics |
Here's what I want someone with more time and dedication that I have to work out:
How many previous season's spendings do we have to add up to equal this years total?
In other words, this transfer window we have spent the same as in the previous X years combined.
Calculate X. |  |
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| Can we afford it? on 10:46 - Aug 21 with 1968 views | Nthsuffolkblue |
| Can we afford it? on 10:11 - Aug 21 by baxterbasics |
Here's what I want someone with more time and dedication that I have to work out:
How many previous season's spendings do we have to add up to equal this years total?
In other words, this transfer window we have spent the same as in the previous X years combined.
Calculate X. |
x = 100. | |
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