Transfers

[Patrick Suffaux]

I was under the understanding that, while owners can sponsor their own clubs, there is a limit to how much they can pay. There are authorities that deem whether a deal is reasonable or not.

I can't quite believe you, sounds reasonable although it sounds like something for a courtroom. Very subjective as to what can be deemed as reasonable in football nowadays.

 

[Davalon]

Pigs have had 200k bid rejected for mulgrew

Tight bastards. Even we offered Aberdeen more than that before he went to Celtic.

 

[Chali 2na]

I can't quite believe you, sounds reasonablealthough it sounds like something for a courtroom. Very subjective as to what can bedeemed as reasonable in football nowadays.

Questionable sponsorship dealsEdit
Some forums have expressed concern at the potential risk that as clubs become ever desperate to raise "allowable" revenue which will positively affect their balance sheet, they will indulge in questionable U.S.-style advertising and sponsorship practices from multiple backers which may eventually compromise the ethical composition of football.[62] Some clubs are easily able to attract reputable sponsorship due to the willingness of companies to be associated with a successful brand. For example, many top clubs raise money from selling sponsorship for their playing as well as their away and training kit, and other titles like the "official logistics partner" (Like Serveto for Barcelona) or "official marine engine partner" (Like Yanmar for Manchester United). Several top clubs have similar deals.

To review such practices, UEFA accountants can review related company deals that might be from a sister company or parent company's subsidiary. Manchester City's deal with the Abu Dhabi Investment Group and Paris Saint-Germain's deal with Qatari Investment Group fall under such reviews.

https://en.m.wikipedia.org/wiki/UEFA_Financial_Fair_Play_Regulations#Questionable_sponsorship_deals

 

[Blade58]

Pigs have had 200k bid rejected for mulgrew

Not true

Tight bastards have bid £100k rising to £200k

Bargain bucket time down at the sty

 

[Ranmoorblade]

I was under the understanding that, while owners can sponsor their own clubs, there is a limit to how much they can pay. There are authorities that deem whether a deal is reasonable or not.

Also, my initial reply to ranmoor blade was regarding SWFC, who already sponsor themselves. I was hoping for him to reveal ways to circumvent the rules besides that.

Various different funding sources like sponsorship, gifting money and accounting practices. If they wanted to buy a £4 million player on a 4 year contract. They could spread it over 4 years, so would only count for £1million each year.

 

[Chali 2na]

Various different funding sources like sponsorship, gifting money and accounting practices. If they wanted to buy a £4 million player on a 4 year contract. They could spread it over 4 years, so would only count for £1million each year.

Various different funding sources like sponsorship...

But Wednesday are already sponsored by Chansiri, so you would think that avenue is exhausted.

If they wanted to buy a £4 million player on a 4 year contract. They could spread it over 4 years, so would only count for £1million each year.

They would still be spending £4m though? How would spreading a payment avoid FFP?

gifting money

Gifted money is still covered by FFP. A chairman can cover a clubs losses, but only up to £13m (Which he's likely already doing)

accounting practices

Now this I have to hear...

 

[Patrick Suffaux]

https://en.m.wikipedia.org/wiki/UEFA_Financial_Fair_Play_Regulations#Questionable_sponsorship_deals

Sorry mate my spell correct caught me out. I had meant to type "I CAN quite believe you" not can't!

Just to be clear on that. I find the spell check on smart phones irritating. Anyway this is interesting reading for me as it's something I've wondered about.

 

[Chali 2na]

Sorry mate my spell correct caught me out. I had meant to type "I CAN quite believe you" not can't!

Just to be clear on that. I find the spell check on smart phones irritating. Anyway this is interesting reading for me as it's something I've wondered about.

No problem mate, kinda wishing you had disagreed though; that 5 second Wikipedia jaunt was wasted!

 

[stringer]

Various different funding sources like sponsorship, gifting money and accounting practices. If they wanted to buy a £4 million player on a 4 year contract. They could spread it over 4 years, so would only count for £1million each year.

That's how most transfers work anyway nowadays

 

[BushBlade]

But Wednesday are already sponsored by Chansiri, so you would think that avenue is exhausted.



They would still be spending £4m though? How would spreading a payment avoid FFP?


Gifted money is still covered by FFP. A chairman can cover a clubs losses, but only up to £13m (Which he's likely already doing)


Now this I have to hear...

Spreading the payment does help compliance with FFP. Talk sport had some finance expert explaining why the other night but it was a bit dull so I couldn't really take it in.

You can also sign a lot of kids, because their wages don't count and then sell them off at a profit. Chelsea's stockpiling of kids was a direct response to FFP. They just bought loads of young players before FFP came in and then sold them as and when they needed to raise money. Plus they charge loan fees for the established players. I believe they charged Everton £5m for Lukaku, for a season long loan.
It appears that Everton are now trying to do the same.

 

[mancunianblade]

Spreading the payment does help compliance with FFP. Talk sport had some finance expert explaining why the other night but it was a bit dull so I couldn't really take it in.

You can also sign a lot of kids, because their wages don't count and then sell them off at a profit. Chelsea's stockpiling of kids was a direct response to FFP. They just bought loads of young players before FFP came in and then sold them as and when they needed to raise money. Plus they charge loan fees for the established players. I believe they charged Everton £5m for Lukaku, for a season long loan.
It appears that Everton are now trying to do the same.

https://en.m.wikipedia.org/wiki/UEFA_Financial_Fair_Play_Regulations#Questionable_sponsorship_deals

I don't understand how Chansiri fiddled it I mean he's not made any effort at all to cover it up it's just his name FFS surely that makes a mockery of it at least a Man City try to cover it up having the owners brothers Co "sponsor" the club

 

[Chali 2na]

Spreading the payment does help compliance with FFP. Talk sport had some finance expert explaining why the other night but it was a bit dull so I couldn't really take it in.

You can also sign a lot of kids, because their wages don't count and then sell them off at a profit. Chelsea's stockpiling of kids was a direct response to FFP. They just bought loads of young players before FFP came in and then sold them as and when they needed to raise money. Plus they charge loan fees for the established players. I believe they charged Everton £5m for Lukaku, for a season long loan.
It appears that Everton are now trying to do the same.

I'd be interested to hear that talksport piece. Seems strange that spreading a payment would make any meaningful difference.

I understand Chelsea's "business model" but what does that have to do with Wednesday or Chansiri circumventing FFP?

I don't understand how Chansiri fiddled it I mean he's not made any effort at all to cover it up it's just his name FFS surely that makes a mockery of it at least a Man City try to cover it up having the owners brothers Co "sponsor" the club

My argument is that he hasn't fiddled it.
He's raised ticket prices, sponsored the shirts and provided the maximum gift (£13m per season) and I think he's reached the limit of their spending: hence the lack of signings so far.

 

[Cerberus Blade]

But Wednesday are already sponsored by Chansiri, so you would think that avenue is exhausted.



They would still be spending £4m though? How would spreading a payment avoid FFP?


Gifted money is still covered by FFP. A chairman can cover a clubs losses, but only up to £13m (Which he's likely already doing)


Now this I have to hear...

Don't know if you got answers to the above but...

1 You can have as many sponsors as you like. The only limitation is the willingness of the sponsors because they want to make sure they get due acknowledgement, otherwise it's a bad deal for them.
2 Because it's ran on a year by year basis (or season by season) a bit like any set of business accounts is run on a financial year basis.
3 Unless something has changed since FFP was brought in then a benefactor can make a donation to a club and it isn't covered by FFP.

 

[Chali 2na]

Don't know if you got answers to the above but...

1 You can have as many sponsors as you like. The only limitation is the willingness of the sponsors because they want to make sure they get due acknowledgement, otherwise it's a bad deal for them.
2 Because it's ran on a year by year basis (or season by season) a bit like any set of business accounts is run on a financial year basis.
3 Unless something has changed since FFP was brought in then a benefactor can make a donation to a club and it isn't covered by FFP.

1: Not if you're being sponsored by your owner: There is an authority that judges whether a sponsorship is deemed "reasonable". So no matter how an owner decides to sponsor his own club, there is a limit to how much he can spend.
2: Don't think it's over 1 year. I'm certain it's over 3 years.
3: In the championship, clubs are permitted to make a loss of £5m under FFP (£13m if debts are covered by an owner in the form of a gift.)

Do you know anything about FFP?

 

[Sean Thornton]

Spreading the payment does help compliance with FFP. Talk sport had some finance expert explaining why the other night but it was a bit dull so I couldn't really take it in.

You can also sign a lot of kids, because their wages don't count and then sell them off at a profit. Chelsea's stockpiling of kids was a direct response to FFP. They just bought loads of young players before FFP came in and then sold them as and when they needed to raise money. Plus they charge loan fees for the established players. I believe they charged Everton £5m for Lukaku, for a season long loan.
It appears that Everton are now trying to do the same.

According to the Wiki article the accounting policies of the country a club is based on are used in FfP calculations. In the UK transfer fees are written off (amortised) over the length of the contract, effectively spreading the payment.

 

[Sean Thornton]

But Wednesday are already sponsored by Chansiri, so you would think that avenue is exhausted.



They would still be spending £4m though? How would spreading a payment avoid FFP?


Gifted money is still covered by FFP. A chairman can cover a clubs losses, but only up to £13m (Which he's likely already doing)


Now this I have to hear...

The £4m isnt a profit and loss item. It's an intangible asset on the balance sheet . The yearly amortisation hits the P&L as does any profit or loss upon the sale of the player. Standard UK accounting practice for football clubs.

 

[Chali 2na]

The £4m isnt a profit and loss item. It's an intangible asset on the balance sheet . The yearly amortisation hits the P&L as does any profit or loss upon the sale of the player. Standard UK accounting practice for football clubs.

Thanks Sean, but unfortunately your post has gone way over my head: not sure I understand what you're getting at. (I know sod all about accounting)

 

[Pinchy]

Thanks Sean, but unfortunately your post has gone way over my head: not sure I understand what you're getting at. (I know sod all about accounting)

He's a charlatan who hasn't a clue what he's talking about. He just throws in a few 'accountant' type words he's heard down the years.

It's easily done. Just mention the rule against perpetuities (actually, more accurately called the rule against remoteness of vesting), Doli Incapax or Res Gestae and you can pass yourself off as a lawyer.

If you want accountancy advice you need to contact some guy in Spain who practices from a laptop and spends his entire working life on twitter playing "Computer Deadline Day" with Magic Mike and Max.

 

[Sean Thornton]

Thanks Sean, but unfortunately your post has gone way over my head: not sure I understand what you're getting at. (I know sod all about accounting)

Sorry, just confirming how the transfer fees are spread rather than being counted when the signing made.

 

[Sean Thornton]

1: Not if you're being sponsored by your owner: There is an authority that judges whether a sponsorship is deemed "reasonable". So no matter how an owner decides to sponsor his own club, there is a limit to how much he can spend.
2: Don't think it's over 1 year. I'm certain it's over 3 years.
3: In the championship, clubs are permitted to make a loss of £5m under FFP (£13m if debts are covered by an owner in the form of a gift.)

Do you know anything about FFP?

I think CB is actually referencing SCMP rather than FFP.

 

[Chali 2na]

Sorry, just confirming how the transfer fees are spread rather than being counted when the signing made.

Does that (spreading the fee) have a direct affect on FFP?
(I was arguing above that I couldn't see why spreading the cost would help alleviate FFP restrictions)

 

[Sean Thornton]

Does that (spreading the fee) have a direct affect on FFP?
(I was arguing above that I couldn't see why spreading the cost would help alleviate FFP restrictions)

Transfer fees themselves don't contribute to any annual loss. Only the write downs. So, for example if the Pigs pay ten million for a penalty bottler and give him a five year contract the P&L takes a £2m hit each year for five years rather than a £10m hit in year one. Helps with the averaging of losses.

 

[The Crab]

That's how most transfers work anyway nowadays

Hence the seemingly increased use of the word "undisclosed" in transfer deals perhaps?

 

[Chali 2na]

Transfer fees themselves don't contribute to any annual loss. Only the write downs. So, for example if the Pigs pay ten million for a penalty bottler and give him a five year contract the P&L takes a £2m hit each year for five years rather than a £10m hit in year one. Helps with the averaging of losses.

Unless I don't understand what your saying (entirely possible) you seem to have contradicted yourself.

You say that transfer fees don't contribute to anual losses, but then in your example you seem to say the opposite.

 

[Sean Thornton]

Unless I don't understand what your saying (entirely possible) you seem to have contradicted yourself.

You say that transfer fees don't contribute to anual losses, but then in your example you seem to say the opposite.

The full fee is written down over the period of the contract. Not when the deal is done. Hence the original point of spreading rather than charging the full fee in one year.

The full fee itself is not charged to P&L in the year the deal is signed.

 

[Chali 2na]

The full fee is written down over the period of the contract. Not when the deal is done. Hence the original point of spreading rather than charging the full fee in one year.

The full fee itself is not charged to P&L in the year the deal is signed.

I think you may be wasting your time with me: I'm still no clearer.

 

[Sean Thornton]

I think you may be wasting your time with me: I'm still no clearer.

I'm not a lecturer so tend to use jargon. But to simplify it it the transfer fee is written off over the period of the contract if you like. As I said, the initial point was made that the cost is spread, which is exactly what happens.

The Pigs transfer dealings last year for example won't give rise to an additional huge loss made up of all the players they bought last season. Which could help with FFP

 

[BushBlade]

I think you may be wasting your time with me: I'm still no clearer.

Which is why I didn't bother replying to your post.

 

[Chali 2na]

I'm not a lecturer so tend to use jargon. But to simplify it it the transfer fee is written off over the period of the contract if you like. As I said, the initial point was made that the cost is spread, which is exactly what happens.

The Pigs transfer dealings last year for example won't give rise to an additional huge loss made up of all the players they bought last season. Which could help with FFP

Ok, that makes sense to me.

I have a follow up question, but I think it's best for everyone if I keep that to myself

Which is why I didn't bother replying to your post.

I'm not surprised based on my exchange with Sean!

 

[BushBlade]

Ok, that makes sense to me.

I have a follow up question, but I think it's best for everyone if I keep that to myself



I'm not surprised based on my exchange with Sean!

The talksport interview was on during Matt Holland when he had Clinton Morrison on as his guest. Either Thursday or Friday evening. But from what I recall he said pretty much what Sean Thornton said.