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

[KS55]

Reading the above, whatever form it takes, it doesn't sound like a particularly insurmountable issue for us. And if it's wages + amortisation then Liverpool are largely in the same boat as us

To reduce the impact of amortization, contracts could be for 10 years. The player would get the ability to release himself after, say, five years for a nominal fee but, if he wanted to continue, he would simply renegotiate his wages and the buy out fee would go up, then down.

 

[Newman Noggs]

"Muslims are the enemy" as one potential owner of Chelsea said to his son.

Slight edit.

 

[Prestwich_Blue]

Ok, I understand that, if owners loans are zero interest and no debt accrued why didn’t our owners just inject a soft loan and avoid the shit storm we endured over FFP?

Surely just as sponsorship deals are commercially correlated, loans have to be evaluated to ensure a market percentage interest is applied to debt.

Based on the Rags commercial debt Chelsea should be evaluated at around 150m per year in interest payments.

Because loans aren't revenue so Sheikh Mansour could lend us £1bn, £2bn, £5bn but we'd still only be able to spend our operational income.

 

[hammocity]

Because loans aren't revenue so Sheikh Mansour could lend us £1bn, £2bn, £5bn but we'd still only be able to spend our operational income.

Weren’t Chelsea increasing their loan year on year without paying back a single penny, the debt as I understand will be on the balance sheet but the 1.5b has been spent, partly before FFP but also afterwards. The loan had zero interest, surely they spent it on transfers, wages and Operational Costs or am I missing something?

 

[Spanishbob]

That's shocking journalism. Nothing about why Barca had to release Messi, absolutely nothing to do with FFP but massive financial miss management resulting in hundreds of millions of debt all due at once and their management team illegally hiding it. Or about the richest German team being mostly sponsored by the clubs that own them. Nothing about Madrid winning it 4 times in the last decade and Bayern twice. Tw@t has an agenda and a half

And a lying twat to boot. State owned City my arse.

 

[halfcenturyup]

Weren’t Chelsea increasing their loan year on year without paying back a single penny, the debt as I understand will be on the balance sheet but the 1.5b has been spent, partly before FFP but also afterwards. The loan had zero interest, surely they spent it on transfers, wages and Operational Costs or am I missing something?

Money is taken into account for FFP when it is spent, not when it is put into a club by loan or by equity. People need to forget about these Chelsea loans, there is no there there. Loans or equity, makes no difference for FFP, all that is important is how much gets spent.

 

[SWP's back]

Got to be approved first but they're talking about implementing them over a 3 year period, with the limit being 90% first year, then 80% and then 70%. As usual, it's a pile of horse shit as just looking at the Profit & Loss account for previous years tells you very little, if anything, about a club's future financial issues.

So is this just to ensure that owners can take a huge dividend every year?

 

[Prestwich_Blue]

Weren’t Chelsea increasing their loan year on year without paying back a single penny, the debt as I understand will be on the balance sheet but the 1.5b has been spent, partly before FFP but also afterwards. The loan had zero interest, surely they spent it on transfers, wages and Operational Costs or am I missing something?

I see what you're saying. It's a good point which underlines the fundamental problem with FFP (or any other system that ties spending to revenue).

There's a difference between profit and cash. In the Profit & Loss account, which FFP uses, transfer fees are accounted for via amortisation. So imagine spending £250m on players one summer, which you pay £50m cash for initially, with 2 further instalments of £100m after 12 and 24 months.

You'd amortise them at £50m a year, and if you make a profit of £50m before amortisation, you'd break even and be OK for FFP purposes. You might record the same numbers in your P&L Account the following year but if you didn't have that £100m cash you needed to pay the following year, then you'd need to find the money from somewhere else or go into administration if you couldn't, as nearly happened to us in 2008. Chelsea would borrow cash from RA to fund any transfer or other spending where they had a shortfall of cash. That never goes through the P&L account, which is all FFP looks at.

In La Liga they look at a club's available future cash flow and set forward spending limits based on that, which is why Barcelona got hammered this season. Tebas may be a racist/ active fascist but that's a far more sensible system than UEFA's.

Hope that explains it a bit better.

 

[levets]

Sorry if this has already been posted(probably has) but I want to make sure nobody has missed this one because I did. Pleasantly surprised with the balance, even going back to the start of the PL, discussing United's rise and the broadcast revenue splits. The replies are gold, Tifo are on the payroll now according to some militant anti-city crusaders.

Somebody at the Athletic thinks we won the Prem for the 1st time in 2012/2013

 

[levets]

Our owners think long term. So a swop of debt for equity gave them the ability to manoever the move into CFG with potential to sell shares in the group. So, no soft loan. Whether that would have saved us from attacks by the American red shirts, I doubt. At least one of them has a real problem with Muslim arabs; the owner of Liverpool calls Khaldoon "the terrorist." "Muslims are the enemy" as one US sports tycoon said to his son.

Is that correct? Henry referred to Khaldoon as ‘The Terrorist’?