Academy Sales Summer 2022

[Centurions]

I'm not convinced it is that way round. If the buying club has a fixed multiple of the buying price as a buy back then it encourages them to spend more initially so they make more on the buy back. I think we are getting better selling prices because that raises the buy back price.

I'd have to disagree with that. As I think you yourself pointed out we've only ever used the buy back once (Douglas Luiz given a work permit may have been another at one point). Given that the sales are usually to a lower League club that don't have the ready cash from the off, I think it makes them much more appealing to the clubs long term. They get quality youth that can earn them a good profit down the line and benefit from them meanwhile. If they really do kick on then they get a smaller free than from other clubs but a lot of goodwill from us which down the line can be worth much more. There's nothing stopping us paying more to sweeten the deal come to that.

 

[Tim of the Oak]

If we were buying everyone back then that is true, but likely it will be one in twenty or one in fifty that we buy back. The only one so far is Angelino and we sold him again at another profit. There is a link between the selling price and the buy-back price, something like 2 or 3 x the original selling price

If we sell 20 payers at £10M that makes us £200M orofit.
If we buy one back at £30M then we are still £170M up.

Plus, even if we don't want a player back but the buying club can sell them for more than the buy-back price we simply buy them and sell them to the 3rd party, or cut a deal to get a share of the extra £'s above the buy back price,

If we sell 20 players for £15mil without the buy back clause that’s £300mil. If we get £200 mil with the buy back clauses then that’s £100mil we need to recoup through buy backs. Those figures are for illustrative purposes and we don’t know how much we initially forego to insert / agree the buy back clauses.

I also pointed out that we’d only activated the buy back for Angelino. We’ve been using the clauses for at least 5 years (Getonimo Rulli sold to Sociedad) but I don’t think we know how many players we’ve sold have these clauses in their contracts. An educated guess would be we’ve lost out on more revenue than we gained (from the Angelino deal) so far but these buy back clauses may prove profitable in the future.

What’s clear is the buy backs are very minor part of our recruitment strategy, to date. We very rarely select players returning from loan never mind but backs:

 

[Eebo]

If we sell 20 players for £15mil without the buy back clause that’s £300mil. If we get £200 mil with the buy back clauses then that’s £100mil we need to recoup through buy backs. Those figures are for illustrative purposes and we don’t know how much we initially forego to insert / agree the buy back clauses.

I also pointed out that we’d only activated the buy back for Angelino. We’ve been using the clauses for at least 5 years (Getonimo Rulli sold to Sociedad) but I don’t think we know how many players we’ve sold have these clauses in their contracts. An educated guess would be we’ve lost out on more revenue than we gained (from the Angelino deal) so far but these buy back clauses may prove profitable in the future.

What’s clear is the buy backs are very minor part of our recruitment strategy, to date. We very rarely select players returning from loan never mind but backs:

I'd have to disagree with that. As I think you yourself pointed out we've only ever used the buy back once (Douglas Luiz given a work permit may have been another at one point). Given that the sales are usually to a lower League club that don't have the ready cash from the off, I think it makes them much more appealing to the clubs long term. They get quality youth that can earn them a good profit down the line and benefit from them meanwhile. If they really do kick on then they get a smaller free than from other clubs but a lot of goodwill from us which down the line can be worth much more. There's nothing stopping us paying more to sweeten the deal come to that.

Fair points, and I accept that on the face of it the buy back will depress the sale price compared to the option of the buying club getting the player without that clause. However I'm not convinced it will have that big an impact as I think that it is actually a very useful negotiating tactic.

The fact that City want to put a buy-back clause in and may be willing to take a lower initial price is a vote of confidence in the player, sand it says we still think they could be good enough for the best team in the land (and all the World!)

Once you have accepted a buy-back clause then if you start haggling to push the price down now you are also pushing your own future potential profit down.

It would be interesting to know whether we could or would enforce the buy back clause to in the situation where the player is worth more on the market than the buy-back price in a situation where we don't want or need the player in order to take the profit over the buy-back price.

For example, we sell for £10M, the buy back clause is say £25M, player does well and is in demand by various bigger clubs at say £50M - do we leave the buying club to take that profit, grab it ourselves, or use it as leverage to get a cut or other benefit?

 

[Xhavenjoe]

For example, we sell for £10M, the buy back clause is say £25M, player does well and is in demand by various bigger clubs at say £50M - do we leave the buying club to take that profit, grab it ourselves, or use it as leverage to get a cut or other benefit?

So far we seem to allow the buying club take that profit.
Angelina is the only one who came back and went.
We could have brought back Douglas Luiz and Jack Harrison and re sold both but didn't.
The bad feeling it may cause may not be worth it.

 

[Centurions]

So far we seem to allow the buying club take that profit.
Angelina is the only one who came back and went.
We could have brought back Douglas Luiz and Jack Harrison and re sold both but didn't.
The bad feeling it may cause may not be worth it.

There might even be a clause stating that we can't buy back and sell on (or even loan) in the same window.

 

[LongsightM13]

Buyback and a sell-on, and we usually insist on both, is a decent insurance policy either way tbf.
Our loan record in recent years has been patchy at best and this seems to be a better policy for all concerned

 

[Centurions]

Buyback and a sell-on, and we usually insist on both, is a decent insurance policy either way tbf.
Our loan record in recent years has been patchy at best and this seems to be a better policy for all concerned

Can't disagree with that, it also helps that the players we're letting go now are quality which makes the deals for the buying clubs very palatable.

 

[Cobra]

Net spend trophy coming our way!

 

[pfazz]

As a matter of interest do any of the more knowledgeable on here how far we are to breaking even with the build costs of the academy versus player sales?

 

[decmancity]

There might even be a clause stating that we can't buy back and sell on (or even loan) in the same window.

With Harrison there was already an agreed price in the deal so we had no way of bringing him back.

Douglas Luiz, we had a buy back but you need the lad himself to agree to come back and then be sold. Not much for him to gain out of that unless we slip him a few million for his time which I don't think is really possible!