City & FFP | 2020/21 Accounts released | Revenues of £569.8m, £2.4m profit (p 2395)

[Mothball]

Reading several hundred of your previous posts in the past I'm sure you will be able to give me a quick couple of lines to perfectly pop him in his place. I can argue the normal points all day, just not the clued up in finance or financial terms and I appreciate that you are.

He's talking a load of shite. Let me explain why. A bond is a financial instrument that pays interest. So you buy £1000-worth of bonds that pay 8% interest (called the coupon rate) and you get £80 per annum return. At some point, the £1000 is repaid to the bond-holder so the price of the bond reflects the rate paid and how close it is to redemption.

If you can only get 4% return in the market without risk then a bond paying 8% will be more valuable but also more expensive to buy. All things being equal, you'll pay double the face value as you're getting double the return. A deep discount bond will be one where the coupon rate is low, so you'll pay less for it. Also it's a long way off redemption, so has little capital value. In essence, what he's saying is that we offer little financial return, are propped up by the Sheikh and will disappear when he sells up. This is clearly nonsense.

We have three income streams - matchday, media & commercial - in ascending order of value. The first two will be going up significantly over the next 2 years as the ground extension, new BT CL deal and then the new Sky PL deal kick in. The third one is already one of the biggest in Europe, albeit a lot of which (c40%?) comes from Abu Dhabi based companies. But even if you took that out, commercial revenue would still be significant (and some or all of it would get replaced).

Back in 2007, our total income was around £60m. Now it's nearly 6 times that. Two years ago, we didn't generate an operating profit whereas now we're showing an operating profit around the £75m mark. In 2 years time, that'll be £170m, with a net profit probably in the region of £100m. Free cash flow will be somewhere in the region of £150m per annum. Also point out that our owner has invested £1bn whereas theirs has taken that amount out of their club.

When Shinawatra bought the club, it was valued at £80m. Now it's valued at nearly £1bn. Hardly an investment whose value is decreasing.

And if he wants some genuine illustrations of discounted bond issues then point him in this direction:
<a class="postlink" href="http://www.ft.com/cms/s/0/7c1f9e98-102d-11df-841f-00144feab49a.html" onclick="window.open(this.href);return false;">http://www.ft.com/cms/s/0/7c1f9e98-102d ... ab49a.html</a> ("Manchester United bond issue falls flat")

You've got to hand it it to PB, he knows his s***!

Love that post(already saved in favs) and many of his previous ones. Very insightful. :-)

Thanks.

Absolutely nailed it! Brilliant post PB

 

[schfc6]

Reading several hundred of your previous posts in the past I'm sure you will be able to give me a quick couple of lines to perfectly pop him in his place. I can argue the normal points all day, just not the clued up in finance or financial terms and I appreciate that you are.

He's talking a load of shite. Let me explain why. A bond is a financial instrument that pays interest. So you buy £1000-worth of bonds that pay 8% interest (called the coupon rate) and you get £80 per annum return. At some point, the £1000 is repaid to the bond-holder so the price of the bond reflects the rate paid and how close it is to redemption.

If you can only get 4% return in the market without risk then a bond paying 8% will be more valuable but also more expensive to buy. All things being equal, you'll pay double the face value as you're getting double the return. A deep discount bond will be one where the coupon rate is low, so you'll pay less for it. Also it's a long way off redemption, so has little capital value. In essence, what he's saying is that we offer little financial return, are propped up by the Sheikh and will disappear when he sells up. This is clearly nonsense.

We have three income streams - matchday, media & commercial - in ascending order of value. The first two will be going up significantly over the next 2 years as the ground extension, new BT CL deal and then the new Sky PL deal kick in. The third one is already one of the biggest in Europe, albeit a lot of which (c40%?) comes from Abu Dhabi based companies. But even if you took that out, commercial revenue would still be significant (and some or all of it would get replaced).

Back in 2007, our total income was around £60m. Now it's nearly 6 times that. Two years ago, we didn't generate an operating profit whereas now we're showing an operating profit around the £75m mark. In 2 years time, that'll be £170m, with a net profit probably in the region of £100m. Free cash flow will be somewhere in the region of £150m per annum. Also point out that our owner has invested £1bn whereas theirs has taken that amount out of their club.

When Shinawatra bought the club, it was valued at £80m. Now it's valued at nearly £1bn. Hardly an investment whose value is decreasing.

And if he wants some genuine illustrations of discounted bond issues then point him in this direction:
<a class="postlink" href="http://www.ft.com/cms/s/0/7c1f9e98-102d-11df-841f-00144feab49a.html" onclick="window.open(this.href);return false;">http://www.ft.com/cms/s/0/7c1f9e98-102d ... ab49a.html</a> ("Manchester United bond issue falls flat")

You've got to hand it it to PB, he knows his s***!

Love that post(already saved in favs) and many of his previous ones. Very insightful. :-)

Thanks.

Perfect, cheers.

 

[HelloCity]

Spurs making the turn against FFP. Quote taken from Levy's end of season review notes on Spurs OS.

We are all eager to be challenging at a higher level. Whilst the popular view may be to spend money in excess of earnings or find a philanthropic investor to fund transfers, those scenarios are simply not possible under the new world of Financial Fair Play rules whereby clubs can only spend revenues generated through operations.

 

[Prestwich_Blue]

Spurs making the turn against FFP. Quote taken from Levy's end of season review notes on Spurs OS.

We are all eager to be challenging at a higher level. Whilst the popular view may be to spend money in excess of earnings or find a philanthropic investor to fund transfers, those scenarios are simply not possible under the new world of Financial Fair Play rules whereby clubs can only spend revenues generated through operations.

Levy wouldn't spend even if he could. Joe Lewis could have long ago turned Spurs into a top four team but chose not to do so. Sod all to do with FFP.

Their net spend over the last 5 years is the lowest of all current PL teams at -£22m.

 

[halfcenturyup]

That's not turning against, that's using it as a convenient excuse not to put your hand in your pocket.

As it were ......

Spurs making the turn against FFP. Quote taken from Levy's end of season review notes on Spurs OS.

We are all eager to be challenging at a higher level. Whilst the popular view may be to spend money in excess of earnings or find a philanthropic investor to fund transfers, those scenarios are simply not possible under the new world of Financial Fair Play rules whereby clubs can only spend revenues generated through operations.

 

[waspish]

Re: City & FFP (continued)

Spurs making the turn against FFP. Quote taken from Levy's end of season review notes on Spurs OS.

We are all eager to be challenging at a higher level. Whilst the popular view may be to spend money in excess of earnings or find a philanthropic investor to fund transfers, those scenarios are simply not possible under the new world of Financial Fair Play rules whereby clubs can only spend revenues generated through operations.

that's not Levy not wanting FFP it's more like isn't it great we don't have to spend big money now and we can sell our best players for big bucks

 

[stony]

That's not turning against, that's using it as a convenient excuse not to put your hand in your pocket.

As it were ......

Spurs making the turn against FFP. Quote taken from Levy's end of season review notes on Spurs OS.

We are all eager to be challenging at a higher level. Whilst the popular view may be to spend money in excess of earnings or find a philanthropic investor to fund transfers, those scenarios are simply not possible under the new world of Financial Fair Play rules whereby clubs can only spend revenues generated through operations.

Spot on. Spurs have go exactly what they wanted, an excuse not to spend any money.
I must remember to laugh at the next Spurs fan I see.

 

[laserblue]

That's not turning against, that's using it as a convenient excuse not to put your hand in your pocket.

As it were ......

Spurs making the turn against FFP. Quote taken from Levy's end of season review notes on Spurs OS.

Exactly the same reason the likes of Kenwright ad Whelan voted in favour of FFP in the PL.

Spot on. Spurs have go exactly what they wanted, an excuse not to spend any money.
I must remember to laugh at the next Spurs fan I see.

 

[gazzaa2]

The same will apply to Liverpool as well whose pro FFP owners basically use it as an excuse not to invest. They spend so much money on crap but it has to be heavily financed by selling the likes of Suarez. They couldn't go out and spend 100 million in a window without getting at least half of it back and even then they can't pay the top wages so pay a premium for middle of the road talent.

They've done City a favour because there's no real challenger outside the top 4 while we rebuild our ageing squad. Always a chance someone else can have an excellent season but they'll fall away again.

 

[BluessinceHydeRoad]

Completely and utterly true that Levy has never been prepared to make the investment required in Spurs. His hope was that FFPR would stop City spending Nd that this would catapult Spurs into their rightful place in the top four.