15/16 financial results - £20.5m profit announced

[HelloCity]

I don't think we can get much more from the shirt manufacturers unless we increase shirt sales dramatically. I'd expect around £30 million a season is what we'll get. I suspect we're selling around 600000 shirts a season at £50 a pop so not much profit for whoever wins the deal. The Etihad deal will double though. It's really hard to find anything on current shirt sales, most of the articles report 345000 which is a 5 year average starting from 2010 season so it won't show the growth we've made over the years. I'm hoping that we've closed the gap on arsenal and liverpool though as they were selling triple what we were selling using this average. if we're now on the same scale as those two then add another £10 million a year to the price.

Incorrect.

 

[BerkshireBlue]

Its not just about shirt sales its about exposure.

No it's about profit and that's it. Cold hard cash, Nike/Adidas/Puma don't need exposure. Look at the recent kit deals £75 million for united, £60 million chelsea, £30 million Arsenal, £25 Million Liverpool.
United sell 2 million shirts same as Chelsea, liverpool and Arsenal sell 1 million and we sell 600000 (happy to be corrected on this figure). The best we can hope for is Arsenal's deal. Anything else is pie in the sky.

 

[OB1]

It would be IAS37 bud, they're not delaying the cash part of the transaction but the purchase/sale, there's enough of a likelihood of it becoming income to count it as a contigent asset, but if the other party is moving the purchase to a different accounting period we really shouldn't be counting it as income in earlier periods imo. We could if we needed to, but looking at the last two sets of reports we haven't needed to.

Provisions, Contingent Liabilities and Contingent Assets?

What contingency do you think exists in the scenario that PB and I were discussing? An inability on the buying club's part to be able to pay? We are talking about a case of a watertight contract that obliges the buying club to complete the purchase at the end of the loan period, there are no get-out clauses in this (hypothetical) example.

 

[aguero93:20]

Provisions, Contingent Liabilities and Contingent Assets?

What contingency do you think exists in the scenario that PB and I were discussing? An inability on the buying club's part to be able to pay? We are talking about a case of a watertight contract that obliges the buying club to complete the purchase at the end of the loan period, there are no get-out clauses in this (hypothetical) example.

There would have to have been clauses of some description to delay the purchase. Otherwise it would be a permanent transfer with a delayed cash payment.

 

[waspish]

No it's about profit and that's it. Cold hard cash, Nike/Adidas/Puma don't need exposure. Look at the recent kit deals £75 million for united, £60 million chelsea, £30 million Arsenal, £25 Million Liverpool.
United sell 2 million shirts same as Chelsea, liverpool and Arsenal sell 1 million and we sell 600000 (happy to be corrected on this figure). The best we can hope for is Arsenal's deal. Anything else is pie in the sky.

Well we will have to wait and see. We should be getting at least double.

 

[Rammy Blue]

No it's about profit and that's it. Cold hard cash, Nike/Adidas/Puma don't need exposure. Look at the recent kit deals £75 million for united, £60 million chelsea, £30 million Arsenal, £25 Million Liverpool.
United sell 2 million shirts same as Chelsea, liverpool and Arsenal sell 1 million and we sell 600000 (happy to be corrected on this figure). The best we can hope for is Arsenal's deal. Anything else is pie in the sky.

I think you're over simplifying it slightly, of course hard cash is important, but there is definitely an element of exposure, it's advertising at the end of the day and the shirt being viewed by hundreds of millions round the globe when the Prem is being shown - consequently as a team that is "regularly" winning the Prem we will expect decent money.

 

[BerkshireBlue]

Well we will have to wait and see. We should be getting at least double.

yes I agree with that especially as we're only getting £12 million at the moment. Like I said previously it's the Etihad deal where the big increase will be but that's a few years off yet.

 

[BerkshireBlue]

I think you're over simplifying it slightly, of course hard cash is important, but there is definitely an element of exposure, it's advertising at the end of the day and the shirt being viewed by hundreds of millions round the globe when the Prem is being shown - consequently as a team that is "regularly" winning the Prem we will expect decent money.

I'd say that two premier league wins out of 5 isn't regular hopefully this will change over the next 5 years but at the moment I see nothing to attract a huge bid (£50m plus) from Nike et al

 

[OB1]

There would have to have been clauses of some description to delay the purchase. Otherwise it would be a permanent transfer with a delayed cash payment.

OK. In the example PB & I were discussing, I gave an opinion based on no clauses that could terminate the obligation to sell and to buy. We do not know what happens in reality and I suspect something is written in that would allow City not to sell, which could be for City's benefit but is probably there to enable the buying club to delay recognition of an actual purchase. In which case, I think City would treat the player's registration as an asset for disposal and still remove it from intangibles. However, without knowing the contract details, and they may well vary in each case, I opined on the simplest case, which is a credit sale or as you put it: "a permanent transfer with a delayed cash payment".

Of course, if the loan period was for more than 12 months, the new leasing standard might apply ;-)

 

[Rammy Blue]

I'd say that two premier league wins out of 5 isn't regular hopefully this will change over the next 5 years but at the moment I see nothing to attract a huge bid (£50m plus) from Nike et al

Last time I checked no-one had won it more than us over that period, so I'd say there is an element of regularity....

and of course, I did put it in speech marks in order to symbolize my reasoning, but you're fully aware of that anyway.

;-)

Anyhow fella, I'd expect us to be sort a deal that is circa £40mil per season.