Spurs Thread - 2021/22

[hammocity]

It’s not really anything to do with ffp. Just means they’ve got more available cash to spend.

Can you explain this, more to do with Chelsea. Abramovich effectively lost/invested 45m per season in the Club. This was in the form of “soft” loans so no interest accrued. However that loan has now reached 1.5b, it’s apparently being written off as part of the takeover.

We were obviously investigated over Sponsorship’s and overspending, why couldn’t Sheikh Mansour just do a Chelsea and provide soft loans to cover the Operational costs.

I believe at the very least Chelsea should have to incur costs on the soft loans as part of FFP, IE that loan should have appropriated interest added for Financial calculations, that interest need not appear on the balance sheet but commercial interest on a loan of 1.5b would be 75m at a flat rate of 5%.

 

[meltonblue]

Can you explain this, more to do with Chelsea. Abramovich effectively lost/invested 45m per season in the Club. This was in the form of “soft” loans so no interest accrued. However that loan has now reached 1.5b, it’s apparently being written off as part of the takeover.

We were obviously investigated over Sponsorship’s and overspending, why couldn’t Sheikh Mansour just do a Chelsea and provide soft loans to cover the Operational costs.

I believe at the very least Chelsea should have to incur costs on the soft loans as part of FFP, IE that loan should have appropriated interest added for Financial calculations, that interest need not appear on the balance sheet but commercial interest on a loan of 1.5b would be 75m at a flat rate of 5%.

The way Mansour did it was very similar to how Spurs have done it - he effectively increased his equity in the club, so more funds were able to go on the balance sheet. It’s effectively the same thing, it meant the club could make an operational loss but still had available funds to invest (we haven’t needed it from him for a long while now). They’ll still be limited by the allowable losses for ffp, but they’ve at least got the funds there.

That’s better for the clubs than either taking a loan or the owner giving the club a loan. I don’t agree Chelsea should have paid interest on it, I just think if owners invest, they should only be allowed to do it through an increase in equity.

 

[BrianW]

To be honest, I see no objection whatsoever to equity investment. It's no different to (say) Lloyds Bank offering shareholders a chance to buy extra shares to build the business. To me, that is infinitely better than (say) a company borrowing £500 million and putting itself in debt.

Yet somehow, if Sheikh Mansour wants to buy more shares in a company he principally owns, it's 'unfair'. Whereas purchasing a club like Burnley (or United) by borrowing a vast sum against its assets is just fine and dandy. It's the economics of the madhouse. Which is more likely to lead to a club becoming bankrupt?

 

[StillBluessinceHydeRoad]

To be honest, I see no objection whatsoever to equity investment. It's no different to (say) Lloyds Bank offering shareholders a chance to buy extra shares to build the business. To me, that is infinitely better than (say) a company borrowing £500 million and putting itself in debt.

Yet somehow, if Sheikh Mansour wants to buy more shares in a company he principally owns, it's 'unfair'. Whereas purchasing a club like Burnley (or United) by borrowing a vast sum against its assets is just fine and dandy. It's the economics of the madhouse. Which is more likely to lead to a club becoming bankrupt?

This is what is perplexing about FFP. A club, which is in no danger of going bust because of the wealth of its owner(s), may not benefit from owner investment to buy players but apparently a loan from anyone for the same purpose is OK! Now the argument that FFP is to protect the financial stability of clubs is torn to shreds by the failure to do anything to forbid leveraged purchase. The real problem is, however, that UEFA wishes to choose those parts of the law (the real law) which appease those clubs which consider their past so much more important than football's present. UEFA caved in to threats of break away if it forbade debt, which is an accepted means of raising capital for investment in law throughout Europe, and instead agreed to place controls on spending. Any system of regulation which seeks to draw distinctions between the "cleanliness" of the money potentially coming into the game is bound to be marred by inconsistency and injustice and the financial health of the game will suffer. At the moment UEFA seeks to protect club owners at the expense of fans and the game.

 

[meltonblue]

This is what is perplexing about FFP. A club, which is in no danger of going bust because of the wealth of its owner(s), may not benefit from owner investment to buy players but apparently a loan from anyone for the same purpose is OK! Now the argument that FFP is to protect the financial stability of clubs is torn to shreds by the failure to do anything to forbid leveraged purchase. The real problem is, however, that UEFA wishes to choose those parts of the law (the real law) which appease those clubs which consider their past so much more important than football's present. UEFA caved in to threats of break away if it forbade debt, which is an accepted means of raising capital for investment in law throughout Europe, and instead agreed to place controls on spending. Any system of regulation which seeks to draw distinctions between the "cleanliness" of the money potentially coming into the game is bound to be marred by inconsistency and injustice and the financial health of the game will suffer. At the moment UEFA seeks to protect club owners at the expense of fans and the game.

A loan or owner investment are both ok, ffp doesn’t stop either of those from happening or differentiate as it doesn’t look at the balance sheet.

I’ve always argued it should do though.

 

[Silvanova]

I’ve not seen this before. Interesting chart, thanks. Gave it a search and is off a daily mail article apparently. Somewhat amazed the rags have so much further they could spend.
Really shows the liverpool owners not bothering to reinvest in the football doesn’t it, and the fact we’re spending at similar levels with respect to our income as Norwich really puts the ffp whining into perspective.

Conte might be onto Levy after he sees this. Now they’re in the CL again have to see if they’re interested in ensuring they stay there and going into the market aggressively

 

[GOULDYBOBS]

How is it possible within FFP?

Their owners are white

 

[Corky]

Good signing in Fraser, no wonder Soton stopped playing him.

 

[waspish]

What’s Kane doing on an American chat show?

 

[GunnerGer]

The way Mansour did it was very similar to how Spurs have done it - he effectively increased his equity in the club, so more funds were able to go on the balance sheet. It’s effectively the same thing, it meant the club could make an operational loss but still had available funds to invest (we haven’t needed it from him for a long while now). They’ll still be limited by the allowable losses for ffp, but they’ve at least got the funds there.

That’s better for the clubs than either taking a loan or the owner giving the club a loan. I don’t agree Chelsea should have paid interest on it, I just think if owners invest, they should only be allowed to do it through an increase in equity.

Think it's the exact same way Rangers have rebuilt. People going on about the losses Rangers have made and the £100M debt they are in, but that's just not the case. Nearly all the loans were actually investors buying more equity in the club, and this was always the plan, to front load investment to get them competitive again with Celtic until they are at the point they are now, which is break even and rely on player trading and European football to make profits to invest on more players.