Lionel Messi | Joins Inter Miami (pg4111)

[Chippy_boy]

I wondered if I might confuse things with the fruit!

But to reiterate, I am NOT saying that the Messi deal makes no sense. I am also not saying that there would not be great benefits, kudos etc.

But purely from a business sense, you cannot take savings you would make anyway and throw them in the pot to justify an unrelated transaction. As I said before, that would be to confuse "can I afford it" with "does it make sense". That's got nothing to do with FFP.

There are other benefits to buying Messi - We are still building our global brand - a player like Messi would increase that significantly and a lot quicker therefore giving you potentially larger revenue streams for a longer period. it'slike a business buying an executive box or advertising - they would never get that money back other than the potential gains they may offer the business through new channels. That doesn't include the football benefits that Messi would bring to the team.

Of course, everyone gets that.

 

[Prestwich_Blue]

I see what you're saying Chippy_boy but I don't think you've quite understood my case. You're trying to make a traditional business case for Messi versus the other players and you're right that that you probably wouldn't take any savings you'd make anyway into the equation.

But you need to look at it differently. It's not a straight business case but impacts the whole financial picture. FFP is judged on accounting profit. Therefore the end of contracts (or offer of new ones) for those players, effectively increases our profit by £20m but doesn't actually bring any cash in.

If we sign Messi, the cash going out doesn't make a difference but the amortisation does. We've got £20m to play with and he'll cost us £25m a year. So in that sense he costs us an additional £5m a year on the bottom line. But in doing that deal, let's say we can get an additional £20m a year off our existing sponsors. And the same off new ones, plus he helps us fill the 12,000 new seats we're putting in (which could be worth £10m a year). So we could increase the bottom line by a net £45m a year.

 

[grunge]

I wondered if I might confuse things with the fruit!

But to reiterate, I am NOT saying that the Messi deal makes no sense. I am also not saying that there would not be great benefits, kudos etc.

But purely from a business sense, you cannot take savings you would make anyway and throw them in the pot to justify an unrelated transaction. As I said before, that would be to confuse "can I afford it" with "does it make sense". That's got nothing to do with FFP.

There are other benefits to buying Messi - We are still building our global brand - a player like Messi would increase that significantly and a lot quicker therefore giving you potentially larger revenue streams for a longer period. it'slike a business buying an executive box or advertising - they would never get that money back other than the potential gains they may offer the business through new channels. That doesn't include the football benefits that Messi would bring to the team.

Of course, everyone gets that.

Thanks for the clarification, All in all there probably wouldn't be a massive, immediate financial boost, with the amoritisation of those players as well as a the 600k a week we are saving from the previous 2 windows we could buy Messi and still be at a status quo on expenditure, or maybe even a little better off that we were.

So the choice comes down to saving the money and becoming self sufficient quicker, or spending the money and being no worse off but expanding the club for the future. personally I fall on the side of spending the money to expand the club.

 

[Chancy Termites]

Just skimming quickly through this tread. Is it true that we're signing Lee Bradbury? Fucking ace if so. We'll sell out 60,000 every match.

 

[blueparrot]

I see what you're saying Chippy_boy but I don't think you've quite understood my case. You're trying to make a traditional business case for Messi versus the other players and you're right that that you probably wouldn't take any savings you'd make anyway into the equation.

But you need to look at it differently. It's not a straight business case but impacts the whole financial picture. FFP is judged on accounting profit. Therefore the end of contracts (or offer of new ones) for those players, effectively increases our profit by £20m but doesn't actually bring any cash in.

If we sign Messi, the cash going out doesn't make a difference but the amortisation does. We've got £20m to play with and he'll cost us £25m a year. So in that sense he costs us an additional £5m a year on the bottom line. But in doing that deal, let's say we can get an additional £20m a year off our existing sponsors. And the same off new ones, plus he helps us fill the 12,000 new seats we're putting in (which could be worth £10m a year). So we could increase the bottom line by a net £45m a year.

Agree but if his buyout is £200 mill wouldn't this amortised fee be £40m over 5 years

 

[Chippy_boy]

I see what you're saying Chippy_boy but I don't think you've quite understood my case. You're trying to make a traditional business case for Messi versus the other players and you're right that that you probably wouldn't take any savings you'd make anyway into the equation.

But you need to look at it differently. It's not a straight business case but impacts the whole financial picture. FFP is judged on accounting profit. Therefore the end of contracts (or offer of new ones) for those players, effectively increases our profit by £20m but doesn't actually bring any cash in.

If we sign Messi, the cash going out doesn't make a difference but the amortisation does. We've got £20m to play with and he'll cost us £25m a year. So in that sense he costs us an additional £5m a year on the bottom line. But in doing that deal, let's say we can get an additional £20m a year off our existing sponsors. And the same off new ones, plus he helps us fill the 12,000 new seats we're putting in (which could be worth £10m a year). So we could increase the bottom line by a net £45m a year.

Thanks, I understand all that PB, as indeed I understand about FFP having been through the documents at some length (as I know you have).

FFP is an extra hurdle that I agree is helped by the disposal of existing assets and reduced amortisation costs. We are agreed on that. I have made my point however about the business case and it seems you understand. That was all.

 

[Chippy_boy]

I am starting another post so as to draw a line under my previous point, and to move on to a different debate:

That is, I am not sure we really know the basis on which Sheikh Mansour views the club. The rhetoric coming from Abu Dhabi is that it is an investment which utlimately he wishes to see a profitable return, albeit over a long term and with significant negative cash flow and losses along the way.

However, I am not entirely sure I believe that. It is quite possible that the wider benefits to Abu Dhabi are more important to him, or perhaps even that we are simply his toy.

In either of these two scenarios, whether buysing Messi is good business or not is really rather irrelevant. The only questions would be (a) does the Sheikh want to do it, (b) Can we afford it - answer is Yes, we can, and (c) can we do it within the constraints of FFP. I think the answer to (c) is yes as well, as per PB's postings.

So it may just come down to whether the Sheikh wants to do it or not, and at what price Barca would be prepared to sell. The straightforward City business case might not be that important actually.

 

[rushts]

I am starting another post so as to draw a line under my previous point, and to move on to a different debate:

That is, I am not sure we really know the basis on which Sheikh Mansour views the club. The rhetoric coming from Abu Dhabi is that it is an investment which utlimately he wishes to see a profitable return, albeit over a long term and with significant negative cash flow and losses along the way.

However, I am not entirely sure I believe that. It is quite possible that the wider benefits to Abu Dhabi are more important to him, or perhaps even that we are simply his toy.

In either of these two scenarios, whether buysing Messi is good business or not is really rather irrelevant. The only questions would be (a) does the Sheikh want to do it, (b) Can we afford it - answer is Yes, we can, and (c) can we do it within the constraints of FFP. I think the answer to (c) is yes as well, as per PB's postings.

So it may just come down to whether the Sheikh wants to do it or not, and at what price Barca would be prepared to sell. The straightforward City business case might not be that important actually.

Can this one be vegetables please.

 

[Anonymous]

I am starting another post so as to draw a line under my previous point, and to move on to a different debate:

That is, I am not sure we really know the basis on which Sheikh Mansour views the club. The rhetoric coming from Abu Dhabi is that it is an investment which utlimately he wishes to see a profitable return, albeit over a long term and with significant negative cash flow and losses along the way.

However, I am not entirely sure I believe that. It is quite possible that the wider benefits to Abu Dhabi are more important to him, or perhaps even that we are simply his toy.

In either of these two scenarios, whether buysing Messi is good business or not is really rather irrelevant. The only questions would be (a) does the Sheikh want to do it, (b) Can we afford it - answer is Yes, we can, and (c) can we do it within the constraints of FFP. I think the answer to (c) is yes as well, as per PB's postings.

So it may just come down to whether the Sheikh wants to do it or not, and at what price Barca would be prepared to sell. The straightforward City business case might not be that important actually.

I think that what you class as the "straightforward City business case" is intrinsically linked to how Sheikh Mansour views the club. My own feeling has always been that City is a fantastic vehicle for Mansour to put Abu Dhabi on the map as the progressive, tourist friendly, least volatile of the Emirati holiday destinations. If City lose a billion over a decade but AD's tourism increases exponentially, then in the Sheikh's eyes the investment was worth it.

The Messi transfer is a no brainer. Whatever the underlying cost to City, it would increase the clubs worldwide exposure to a level which could probably only be matched by Madrid and Barca. That in and of itself is enough if you agree with my above paragraph regarding how City's exposure helps AD.

 

[Didsbury Dave]

I am starting another post so as to draw a line under my previous point, and to move on to a different debate:

That is, I am not sure we really know the basis on which Sheikh Mansour views the club. The rhetoric coming from Abu Dhabi is that it is an investment which utlimately he wishes to see a profitable return, albeit over a long term and with significant negative cash flow and losses along the way.

However, I am not entirely sure I believe that. It is quite possible that the wider benefits to Abu Dhabi are more important to him, or perhaps even that we are simply his toy.

In either of these two scenarios, whether buysing Messi is good business or not is really rather irrelevant. The only questions would be (a) does the Sheikh want to do it, (b) Can we afford it - answer is Yes, we can, and (c) can we do it within the constraints of FFP. I think the answer to (c) is yes as well, as per PB's postings.

So it may just come down to whether the Sheikh wants to do it or not, and at what price Barca would be prepared to sell. The straightforward City business case might not be that important actually.

It's a point I make regularly on here when we discuss FFP, and you get people going "this club is going to be in big profit very soon". It isn't. The best the club can realistically aspire to in the short to medium term is break-even ish. And when it gets there Abu Dhabi will have invested well over a billion pounds which they will never ever get back.

They are, of course, not in this to make money directly from the club. There are quotes (I think in David Conn's book) from Khaldoon about how they never dreamed that owning a football club could be so high-profile.

They are in it to use City as one giant Abu Dhabi billboard, so that when they want to do long-term deals with the biggest players in world industry, and I mean the biggest of all, they are seen as the people to do business with.

Long term City are about ensuring the ongoing prosperity of Abu Dhabi when the oil runs out.