Thanks, Andy. Great job breaking down the accounts so clearly. Two questions/ concerns, probably a result of my poor grasp of football accounting!
1. Just how much transfer money will be available? You point out that we're allowed an 80m loss this year, but our operating loss seems stuck at 70m even with the increased revenue (costs have gone up in line with revenue), so are we still tied to player sales?
2. Squad cost. Your graph seems to show this as about 310m as against revenue of 320m (97%). The allowable ratio for UEFA is going to be 70% (I think) so to meet that we would have to either increase revenue to 440m or reduce those costs to 225m. Again this points to player sales which (I think I read somewhere) are also taken into account in squad cost ratio.
Unless we suddenly start signing APT commercial deals, I don't see how we solve this short term.
What should be clear to everyone from this excellent article, is that the financial holy grail for NUFC is commercial deals, not increasing match day revenue by building a new stadium, which maybe explains the lack of announcements on stadium redevelopment.
As for how much will be available for transfers, it depends how you spend it.
For example: £50m to spend. Buy 1 player for £50m, pay cash up font - you get 1 player.
OR
Buy 5 players for £50m each with all the players on 5 years contracts. Spread the transfer fees over the 5 years (we all know this as "tick"😂) so you pay £50m a year for 5 years.
You still spent £50m this year, but you got 5 players.
But you've already 'spent' £50m a years for the next 4 years.
If you do this (look at Chelsea) you can sign more players short term, but may have a problem longer term. But if you're a state PIF with bundles of cash you might not be as bothered by that.
Absolutely, Chris! As I've said before, the gap between us and City in match-day income is trivial but it's vast in terms of commercial.
As for transfer spending, yes, I guess every deal is amortised over five years now, but as you say, that only stores up problems. Hall, Tino, Gordon, Botman, Isak, Tonali, Bruno, Barnes. What's that? 300m+? So we "spend" 60m every year on transfers before we do any other deals. That's the nub of the problem.
Thanks, Andy. Great job breaking down the accounts so clearly. Two questions/ concerns, probably a result of my poor grasp of football accounting!
1. Just how much transfer money will be available? You point out that we're allowed an 80m loss this year, but our operating loss seems stuck at 70m even with the increased revenue (costs have gone up in line with revenue), so are we still tied to player sales?
2. Squad cost. Your graph seems to show this as about 310m as against revenue of 320m (97%). The allowable ratio for UEFA is going to be 70% (I think) so to meet that we would have to either increase revenue to 440m or reduce those costs to 225m. Again this points to player sales which (I think I read somewhere) are also taken into account in squad cost ratio.
Unless we suddenly start signing APT commercial deals, I don't see how we solve this short term.
What should be clear to everyone from this excellent article, is that the financial holy grail for NUFC is commercial deals, not increasing match day revenue by building a new stadium, which maybe explains the lack of announcements on stadium redevelopment.
As for how much will be available for transfers, it depends how you spend it.
For example: £50m to spend. Buy 1 player for £50m, pay cash up font - you get 1 player.
OR
Buy 5 players for £50m each with all the players on 5 years contracts. Spread the transfer fees over the 5 years (we all know this as "tick"😂) so you pay £50m a year for 5 years.
You still spent £50m this year, but you got 5 players.
But you've already 'spent' £50m a years for the next 4 years.
If you do this (look at Chelsea) you can sign more players short term, but may have a problem longer term. But if you're a state PIF with bundles of cash you might not be as bothered by that.
Absolutely, Chris! As I've said before, the gap between us and City in match-day income is trivial but it's vast in terms of commercial.
As for transfer spending, yes, I guess every deal is amortised over five years now, but as you say, that only stores up problems. Hall, Tino, Gordon, Botman, Isak, Tonali, Bruno, Barnes. What's that? 300m+? So we "spend" 60m every year on transfers before we do any other deals. That's the nub of the problem.
Great post and info, thanks.