The Light Was Yellow Sir
Well-Known Member
I get that, but what would be gained by the sheik leading us a billion and, therefore, why is Abramovic in the cart for £1.5B?
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CAS judgement: UEFA ban overturned, City exonerated (report out p603)
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halfcenturyup
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How much do you think we'll get for Jihad? Or are we sending him on loan to Stoke?
Sun Ji Had, now he was a player.
He lent Chelsea most of that before ffp. So they were able to spend it on players etc. It was that which caused UEFA to panic and try to stop us with ffp. They failed.I get that, but what would be gained by the sheik leading us a billion and, therefore, why is Abramovic in the cart for £1.5B?
MillionMilesAway
Well-Known Member
I get that, but what would be gained by the sheik leading us a billion and, therefore, why is Abramovic in the cart for £1.5B?
I think it's mostly just a method of business, rather than one being a gain, and is presumably because a loan is a distinct issue and can be nominally reclaimed into £££, but a gift to the club would disappear in the business assets.
The sheikh converted his input to equity. Abramovich didn't, instead keeping it as a 0% loan.
It may be a cultural thing about debt, others may know more about that.
Prestwich_Blue
Well-Known Member
A loan potentially makes sense if we want to spend the money on infrastructure, for example, building a new stadium. That's all balance sheet stuff until the stadium is complete, at which point the depreciation becomes an allowable FFP expense.I get that, but what would be gained by the sheik leading us a billion and, therefore, why is Abramovic in the cart for £1.5B?
John Wardle & David Makin lent us money because we didn't generate enough cash to cover our outgoings (although we'd have passed FFP). Or it could be to cover transfer fees (which then get amortised).
As it happens, whenever Sheikh Mansour head out in money, he's done that via equity investment, which means he effectivel buys shares at £1 per share. So if he puts in £100m, he gets 100m shares for that. Again, that's all balance sheet related.
Pablo ZZZ Peroni
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As KS55 said most was before FFP. A couple of years ago or so there was another £200+mil when they went on a transfer splurge - Havertz etc. Funds mainly needed for cashflow.I get that, but what would be gained by the sheik leading us a billion and, therefore, why is Abramovic in the cart for £1.5B?
The difference with us is that owner inputs have been pretty infrequent in recent years. Last big input was January 18 when we bought Laporte. We had to pay the full transfer value up front due the release clause but for FFP purposes the transfer fee accounted for under the length of the contract with amortisation.
We wouldn't have the cashflow at that time to pay the full amount up front. So the Sheikh coughed up. Difference was that the input was converted into shares/equity - so no debt.
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Pablo ZZZ Peroni
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You mean cultural with the Sheikh?I think it's mostly just a method of business, rather than one being a gain, and is presumably because a loan is a distinct issue and can be nominally reclaimed into £££, but a gift to the club would disappear in the business assets.
The sheikh converted his input to equity. Abramovich didn't, instead keeping it as a 0% loan.
It may be a cultural thing about debt, others may know more about that.
If so we do use "debt" including a v large drawdown facility. Another example is when we signed up for the Puma deal we almost simultaneously took out a facility secured on incoming sponsorship money.
MillionMilesAway
Well-Known Member
You mean cultural with the Sheikh?
If so we do use "debt" including a v large drawdown facility. Another example is when we signed up for the Puma deal we almost simultaneously took out a facility secured on incoming sponsorship money.
Yes - whether a 'debt' as a long term plan with no repayment plan is a bad thing.
I think a short-term borrow to a plan may be different.
(I accept this may be drivel - it was just an impression I had).
It is standard practice for prem clubs to take a short term loan in the summer to cover transfers when there is little positive cash flow. The loan is usually paid back when the PL pays the first tranche of sponsorship monies to the clubs. (In Sept I think). Loans to cover cash flow are very common in all types of business and need to be distinguished from long term indebtedness.