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

[Chippy_boy]

Not saying I'm right but as Platini specifically said loans are fine as long as you can afford the interest I'd need to be pointed in the direction of the rules to the contrary before I believed you 100%.

All that matters is revenue (income) and expenses (outgoings). A loan just affects how much cash you have got and how much debt you have on the balance sheet. It doesn't change your revenue or expenses (other than adding to your expenses in terms of interest payments).

So a club can borrow what it likes and it doesn't help FFP at all.

Not my point. You've just repeated that a loan doesn't help revenue, I'm not saying it does. Read the whole post.

"Again not saying I'm right but nobody has been able to state why its incorrect in a logical way. Saying that it doesn't help turnover or that we can't afford it now isn't relevant to this particular argument. I'm talking about a hypothetical situation in the future where we have the turnover of the rags and make large profits, then take the loan out. So when someone raises it again, and they will, I still think they have a point as the regulations stand."

To be honest mate i have no clue what you are going on about from the above. It's clear as mud that paragraph.

The fact is, a loan makes no material difference to FFP. You can take one out or not. Makes no difference. Why do you think it does?

To make it clear, suppose you are a decorator who earns £600 a week and you have £100 in the bank. FFP says you can spend £600 a week on players. If someone loans you £200, you now have £300 in the bank. How much can you spend on players under FFPR? £600 a week. The cash in the bank makes no difference and it doesn't matter where you got it, loan or otherwise.

 

[Cobwebcat]

All that matters is revenue (income) and expenses (outgoings). A loan just affects how much cash you have got and how much debt you have on the balance sheet. It doesn't change your revenue or expenses (other than adding to your expenses in terms of interest payments).

So a club can borrow what it likes and it doesn't help FFP at all.

Not my point. You've just repeated that a loan doesn't help revenue, I'm not saying it does. Read the whole post.

"Again not saying I'm right but nobody has been able to state why its incorrect in a logical way. Saying that it doesn't help turnover or that we can't afford it now isn't relevant to this particular argument. I'm talking about a hypothetical situation in the future where we have the turnover of the rags and make large profits, then take the loan out. So when someone raises it again, and they will, I still think they have a point as the regulations stand."

To be honest mate i have no clue what you are going on about from the above. It's clear as mud that paragraph.

The fact is, a loan makes no material difference to FFP. You can take one out or not. Makes no difference. Why do you think it does?

I don't. But I'm all out of ways of explaining what I mean. Unless a loan counts as a cost rather than just the interest on it...which is what I understood and how the establishment manage to keep spending while in debt.

 

[Chippy_boy]

Not my point. You've just repeated that a loan doesn't help revenue, I'm not saying it does. Read the whole post.

"Again not saying I'm right but nobody has been able to state why its incorrect in a logical way. Saying that it doesn't help turnover or that we can't afford it now isn't relevant to this particular argument. I'm talking about a hypothetical situation in the future where we have the turnover of the rags and make large profits, then take the loan out. So when someone raises it again, and they will, I still think they have a point as the regulations stand."

To be honest mate i have no clue what you are going on about from the above. It's clear as mud that paragraph.

The fact is, a loan makes no material difference to FFP. You can take one out or not. Makes no difference. Why do you think it does?

I don't. But I'm all out of ways of explaining what I mean. Unless a loan counts as a cost rather than just the interest on it...which is what I understood and how the establishment manage to keep spending while in debt.

See my edit above.

 

[SWP's back]

From my earlier post on p83:

I get what he means and is a point I raised right at the start of FFP. I still don't understand why it isn't possible. Forget that loans don't count as revenue I don't think that's the point. The point is that as long as turnover increases to the point that you can afford the interest on the loan then that is a FFP pass. So imagine that in a couple of years we are making a 50 million profit. We then use that profit to pay the interest off on a huge loan at favourable rates. The loan can then be used to buy players. It's exactly what United have done.

Of course it's nonsense for us because we don't need a loan but its a card we could, in theory, play once our turnover could cover our costs plus the annual interest on the loan.

If you can afford the interest on the loan UEFA say that's a pass. The loan is not revenue but it doesn't need to be.

I still don't understand why in the future we couldn't do this once our revenue increased in exactly the same way United have. I don't think it's part of our sustainability plan but the theory is sound as far as I can see. Not now but in the future should we want to suddenly fork out 400 million in a transfer window. We would be in huge debt but debt is not what counts

Still doesn't work that way.
Footballing income - Footballing expenditure = FFP figure
Ticket, Advertising, Broadcasting, Merchandise Income - Wages and Amortization, Football related costs = what UEFA look at.
They'll look at us getting a loan even less favourably than investment from the Sheikh.
The reason the scum/arsenal/real etc were allowed to do it is because they did it more than 10 years before FFP existed.

Not saying I'm right but as Platini specifically said loans are fine as long as you can afford the interest I'd need to be pointed in the direction of the rules to the contrary before I believed you 100%.

It's only a theoretical point as its not something we would want to do but as far as I can see if we wanted to buy Messi for 250 million and had made a profit of 100 million we would fall foul of the rules (forgetting amortisation for the purposes of this example) if we bought him. However if we bought him with a loan where we could afford the interest then that's a pass. Barca are millions in debt but because they can afford interest on their loans there isn't a problem with FFP.

If we were in a healthy profit in years to come I don't see the difference. FFP encourages loans and debt. That's why United are fine despite their debt, because they can afford the interest on the debt from turnover. Where does it say that if we could afford it we couldn't do the same but use the loan to buy players/pay wages?

Again not saying I'm right but nobody has been able to state why its incorrect in a logical way. Saying that it doesn't help turnover or that we can't afford it now isn't relevant to this particular argument. I'm talking about a hypothetical situation in the future where we have the turnover of the rags and make large profits, then take the loan out. So when someone raises it again, and they will, I still think they have a point as the regulations stand.

Mind you I can easily imagine Platini being wrong or that the regulations have changed since the last time I looked.

Plenty of people have explained but you fail to grasp it mate.

It has nothing to do with cash in the bank. It's about income (football) and expenditure (football).

If you spend more football expenditure than you bring in then you are fucked.

You need to let this go.

 

[Hesp]

Is what cobweb try to say that. If we had a revenue of 100 mil and and expenditure of 50 mil. Then we took out a massive loan for 500 mil with an interest repayment of 25mil per year. Bought messi, ronandlo and bale for 400mil. Our revenue would still be 100 mil, expenditure would be 75 mil ( obviously would need to add on the wages). But effectively we'd still be with FFP?

I'm no accountant.

 

[I'm With Stupid]

I'm still not entirely sure what he's suggesting. Are you saying that you could in theory, buy a player using a loan, and then for the purposes of FFP regulation, only put the loan interest through the books until it suits the club to pay off the balance? If so, for the purposes of FFP regulations, any transfer fee has to be registered as an expense over the course of the player's contract, regardless of how it's actually paid. You could pay the full transfer fee up front, but if the player is on a 5 year contract, FFP regulations would record that as 5 equal payments over the course of the contract. The same would apply for a club paying nothing up front because they've got the bank to pay the fee.

One good thing about this is that it does encourage teams to transfer players they no longer need, rather than stockpiling them, because they can (I believe) wipe any remaining transfer fee off a player they sell mid contract. So Juan Mata's transfer was worth more to Chelsea than just the fee they got for him and his wages off the bill as far as FFP is concerned. He signed for Chelsea for £23.5m on a 5 year deal, and did 3 years of that contract. That means that £9.4m of the original transfer fee no longer goes through the books, in addition to the £37.1m they got for him, making the total saving £46.5m plus wages.

I might be talking bollocks though. This is just what I've got from reading the Swiss Ramble a while ago. It's entirely possible I've misunderstood it completely.

 

[Cobwebcat]

To be honest mate i have no clue what you are going on about from the above. It's clear as mud that paragraph.

The fact is, a loan makes no material difference to FFP. You can take one out or not. Makes no difference. Why do you think it does?

I don't. But I'm all out of ways of explaining what I mean. Unless a loan counts as a cost rather than just the interest on it...which is what I understood and how the establishment manage to keep spending while in debt.

See my edit above.

Fair enough I was under the impression that you could spend a loan if you could afford the interest from turnover if you can't then i understand.

 

[bluesimon]

I would say both the Nike and Etihad deals are under market value.[/quote]

totally agree with this - especially the Etihad deal. When everyone was up in arms about it, it turns out that it has been massively beneficial for Etihad and was actually undersold by Cook. If City were negotiating the same deal now, it would be nearer to £600m++ and would have had some kind of break clause or uplift ability depending on exposure and gain.

 

[Cobwebcat]

I would say both the Nike and Etihad deals are under market value.

totally agree with this - especially the Etihad deal. When everyone was up in arms about it, it turns out that it has been massively beneficial for Etihad and was actually undersold by Cook. If City were negotiating the same deal now, it would be nearer to £600m++ and would have had some kind of break clause or uplift ability depending on exposure and gain.[/quote]

How do we know it doesn't?

 

[Mr. Aguia]

Still doesn't work that way.
Footballing income - Footballing expenditure = FFP figure
Ticket, Advertising, Broadcasting, Merchandise Income - Wages and Amortization, Football related costs = what UEFA look at.
They'll look at us getting a loan even less favourably than investment from the Sheikh.
The reason the scum/arsenal/real etc were allowed to do it is because they did it more than 10 years before FFP existed.

Not saying I'm right but as Platini specifically said loans are fine as long as you can afford the interest I'd need to be pointed in the direction of the rules to the contrary before I believed you 100%.

All that matters is revenue (income) and expenses (outgoings). A loan just affects how much cash you have got and how much debt you have on the balance sheet. It doesn't change your revenue or expenses (other than adding to your expenses in terms of interest payments).

So a club can borrow what it likes and it doesn't help FFP at all.

This is how I see it as well. The point it seems he's making is can they use a loophole around FFP. By getting a loan and using that money to buy players but only the yearly payments being counted as "spending". It's an interesting idea but I don't think UEFA would see it that way. IMO they would count all money spent on players regardless of how much of "our money" was being used opposed to the "banks money". They would just say we spent 200m, regardless of the payment plan so to speak.

Wondering how the NYCFC and the club in Australia could help us beyond having them pay us for scouting costs. Could we sell say Clichy to NYCFC for 20m?