City post record revenues of £473.4million for 16/17

[waspish]

See remarks above. I was wrong. They can't include revenue from TV cash and extra wages has to be funded from other sources.

Their commercial income went up by 2.7% on £275m. The match-day income is static allowing for when home games fall, but they sold Januzaj for about £10m so it does look like it could be an issue.

Perhaps someone more familiar with the rules and finance could have a look? Looks marginal to me.

Ah right if it was us the media be all over it let’s hope someone does pick up on it.

 

[Cityfan]

Let's say we buy 4 players one summer for a combined £150m and pay them a combined £20m per season in wages. We keep them for 5 years and release them at the end of their contracts.

To replace them, we buy 4 more players for £150m and pay them £20m a year. Our net spend is £150m but the impact on the bottom line is zero. That's why net spend on its own is a meaningless concept by and large.

The impact on the bottom line is £50M per year (of which £30M is spend on transfers) it's just that it is unchanged it is not zero.

 

[Cityfan]

But it is irrelevant for accounting and FFP.

Let’s say in any one year we have a £1m profit and amortisation costs of £135m.

We could have a net spend of £150m next summer and keeping everything else the same increase the profit from £1m.

It all depends who you sell, what their contract was being booked at on a yearly basis. Headline figures such a net spend that fans mention are totally irrelevant by themselves. Selling a player for £20m who has a book cost of £30m is completely different to selling a youth player or £20m with no book cost. But they would mean the same thing in terms of our ‘net spend’.

Let us give a counter example :
We buy player A for £50M and put him on a five year contract , he is injury plagued and is barely able to play any games for us and when he does play he is generally a poor fit for the team as he has been unable to practice with them. After four years you give up on him and manage to sell him for £15M. For that accounting period you will declare a £5M profit on player transactions. The real life reality is that excluding wages and other expenses he has cost you his net spend of £35M and every penny of that will be reflected in your profits for the accounting periods of his time at the club.

(Ferguson claimed Veron was profitable for Manchester United on this basis)

 

[SWP's back]

I’m giving up.

Talk about net spend if you want but it matters not a damn and tells no story by itself. I really don’t think you get it.

 

[squirtyflower]

I’m giving up.

Talk about net spend if you want but it matters not a damn and tells no story by itself. I really don’t think you get it.

It's usually a Spurs fan thing, they bang on constantly about net spend.
Mainly because they sell their best players and win fuck all.

 

[Jalfraag]

Let us give a counter example :
We buy player A for £50M and put him on a five year contract , he is injury plagued and is barely able to play any games for us and when he does play he is generally a poor fit for the team as he has been unable to practice with them. After four years you give up on him and manage to sell him for £15M. For that accounting period you will declare a £5M profit on player transactions. The real life reality is that excluding wages and other expenses he has cost you his net spend of £35M and every penny of that will be reflected in your profits for the accounting periods of his time at the club.

(Ferguson claimed Veron was profitable for Manchester United on this basis)

The 35M is irrelevant because it has been recognised in previous years. You are talking about net spend in a single financial year, therefore, only the 5M profit on the sale counts.

 

[Cityfan]

The 35M is irrelevant because it has been recognised in previous years. You are talking about net spend in a single financial year, therefore, only the 5M profit on the sale counts.

All those previous financial years matter as to whether or not a club is profitable or not, long term profitably is what matters in business all amortisation does is smooth things out.

 

[dickie davies]

All those previous financial years matter as to whether or not a club is profitable or not, long term profitably is what matters in business all amortisation does is smooth things out.

Even though we've been owned by ADUG for nine years, City is still in its infancy in regard to the current custodian
So long as we're within FFP, profitability doesn't matter

 

[Prestwich_Blue]

All those previous financial years matter as to whether or not a club is profitable or not, long term profitably is what matters in business all amortisation does is smooth things out.

It certainly matters for FFP but football clubs have been poor in the past at achieving long-term profitability. But as long as we have the cashflow to enable us to top up the squad then we're OK. That's the more important consideration.

 

[Cityfan]

It certainly matters for FFP but football clubs have been poor in the past at achieving long-term profitability. But as long as we have the cashflow to enable us to top up the squad then we're OK. That's the more important consideration.

Yeah, I'm not trying to imply that amortisation is unimportant for FFP purposes, just trying to point out that the difference between acquisition price and selling price, if any does have a long term impact on our clubs profitability.
(and amortisation isn't a magic bullet that makes this go away as it occasionally reads.)