The loan with an obligation to buy

[bonespost]

PSG have done it with Serge Aurier <a class="postlink" href="http://www1.skysports.com/football/news/11820/9392658/transfer-news-paris-saint-germain-sign-serge-aurier-on-season-long-loan-from-toulouse" onclick="window.open(this.href);return false;">http://www1.skysports.com/football/news ... m-toulouse</a>

 

[johnmc]

Right so the club have agreed an obligation to buy with Valencia with no clauses some people believe. So what contract has Negredo signed with Valencia? He wont have signed a 3 or 4 year deal so his registration is still with us. There is no way we can enforce him to sign for Valencia next year if he doesnt want to. So say Real come in, and he wants to go there, then Madrid are now negotiating for a 30 year old.

I do not see how we could force him to sign a contract if he didnt want to.

Why do you want to convince yourself that City have f**ked up ? Why is it so hard to believe that we have people that know what they are doing ?

Pipe down petal. Im not trying o convince anyone - I am not convinced way that this is a 100% purchase as you and others believe it to be. As some accounting people have said if it was 100% it would be a breach of something or other.

Maybe it will go through without a hitch this time next year, who knows. If it does the fee is a very good one. But honestly now, do you think this is a 100% cast iron, no get out from either party? Remember we have been burnt by doing this before with Caicedo

 

[BlueKolarovWorker]

So, if I've understood earlier comments correctly, if we take the square root of an apple and multiply it by the number of times Rooney has been caught with his trousers down and then add that to the number of cranes currently not in operation by the South Stand before cleverly dividing this number by the lack of attention shown by the media and hold on to this for the next four years, the Beast deal is in line with the restraints of FFP.

I hope I've got this right.

 

[johnmc]

PSG have done it with Serge Aurier <a class="postlink" href="http://www1.skysports.com/football/news/11820/9392658/transfer-news-paris-saint-germain-sign-serge-aurier-on-season-long-loan-from-toulouse" onclick="window.open(this.href);return false;">http://www1.skysports.com/football/news ... m-toulouse</a>

That says they have the option to make it permanent. Im not aware of any deal where theres been anything other than a option to buy but not saying its never happened

 

[cleavers]

Maybe it will go through without a hitch this time next year, who knows. If it does the fee is a very good one. But honestly now, do you think this is a 100% cast iron, no get out from either party? Remember we have been burnt by doing this before with Caicedo

It was a serious question, so I have no need to "pipe down" thanks, all you needed to do was answer the question.

As I said above I think it was a convenience for Valencia, who don't have the money until their takeover is complete, and while it may not kick in till next summer, I imagine those in charge of our club have it completely cut and dried, given how long the negotiations seem to have taken.

I really can't see anything to be worried about, but if you don't trust our suits to have this sewn up, that's your choice.

I'm sure a loan can be converted into a permanent deal outside of transfer windows anyway, which may well be the case with this one.

 

[Armitage]

Not read all the previous posts. This loan-sale deal was done to benefit us. We do not need the money on this years FFP, but it will be of more use on next year's FFP.

 

[Nixon_The_Bike_Thief]

Not read all the previous posts. This loan-sale deal was done to benefit us. We do not need the money on this years FFP, but it will be of more use on next year's FFP.

That cant be right as FFP is judged on a rolling period of a number of years. The this year next year scenario not only doesn't work but will be irrelevant to us by Christmas anyway.

 

[bluesince76]

This loan with option/requirement to buy was mentioned on TalkSport last night and was described as a way of getting round FFP for clubs like City. Having thumped the steering wheel, I realised there was no point growing another ulcer and that the Sheikh bought the wrong club if he wanted positive PR in the UK.

 

[bluechampion7891]

I dont think it counts as income towards this year. Consider why the clubs who are buying players on such deals: they are deferring payment (obligatory) to the next year so that it doesn't show up in this years account. Which means the reverse should be true, that city can't count the 24 odd million in this years account.

 

[ianw16]

I dont think it counts as income towards this year. Consider why the clubs who are buying players on such deals: they are deferring payment (obligatory) to the next year so that it doesn't show up in this years account. Which means the reverse should be true, that city can't count the 24 odd million in this years account.

So on that basis we could have signed Messi in this window with a ten bob down payment, and the other £100m odd next season when we are free of FFP restrictions? Just cannot see that UEFA have not factored this into their thinking regarding FFP. Otherwise clubs are just going to be looking at their 3 year account figures, realising that the striker they need to win the CL is beyond their ability to pay, and doing one of these type of deals.
If UEFA have indeed left a loophole, why weren't we exploiting it?

 

[Armitage]

I dont think it counts as income towards this year. Consider why the clubs who are buying players on such deals: they are deferring payment (obligatory) to the next year so that it doesn't show up in this years account. Which means the reverse should be true, that city can't count the 24 odd million in this years account.

So on that basis we could have signed Messi in this window with a ten bob down payment, and the other £100m odd next season when we are free of FFP restrictions? Just cannot see that UEFA have not factored this into their thinking regarding FFP. Otherwise clubs are just going to be looking at their 3 year account figures, realising that the striker they need to win the CL is beyond their ability to pay, and doing one of these type of deals.
If UEFA have indeed left a loophole, why weren't we exploiting it?

Because you still need to raise the money to pay for it.

 

[FanchesterCity]

As far as FFP is concerned (and subject to my understanding):

Any transfer agreement we undertake counts right now. e.g. Buy now, pay later doesn't get you round FFP. This is basically the 'Net Transfer Position'.

Now, onto more subtle matters... the 'loan with an obligation to buy'.

There's a very important factor to consider here. The 'obligation' to buy is on Valencia. Since we have no sight of the actual contract itself, we do not know if there is an obligation on our part to sell.

It is perfectly feasible that City have placed the obligation to buy on Valencia, but still kept the right / option not to sell, or effectively waive their obligation. We don't know if Valencia can or cannot compel City to sell.

IF City have imposed the obligation on Valencia but reserved the right to keep him, then arguably our Net Transfer Position is nil. We have not COMMITTED to sell at this point.

Again, without sight of the actual contract, we can only speculate, I'm merely saying that an obligation to buy doe NOT necessarily imply an obligation to sell.

 

[bluechampion7891]

I dont think it counts as income towards this year. Consider why the clubs who are buying players on such deals: they are deferring payment (obligatory) to the next year so that it doesn't show up in this years account. Which means the reverse should be true, that city can't count the 24 odd million in this years account.

So on that basis we could have signed Messi in this window with a ten bob down payment, and the other £100m odd next season when we are free of FFP restrictions? Just cannot see that UEFA have not factored this into their thinking regarding FFP. Otherwise clubs are just going to be looking at their 3 year account figures, realising that the striker they need to win the CL is beyond their ability to pay, and doing one of these type of deals.
If UEFA have indeed left a loophole, why weren't we exploiting it?

Because you still need to raise the money to pay for it.

1) probably b/c we wanted to play it safe
2) maybe there wasn't a player available that we wanted, also add to the fact that you have to make the selling club agree to the deal too. Rumors (and they are probably BS) that we asked Di maria to delay his decision to join the rags, for that same reason.
3) PSG have made such a deal already, Mendes being quoted as mentioning that Falcao to rags is a loan b/c of FFP (dont knwo whether that is true or not)
4) We dont need Messi :).

 

[pardoeofftomexico]

The loan fee comes into our current years accounts. The sale cannot come into our accounts until the accounting year when the sale takes place. I can see no FFP advantage for us and maybe a disadvantage if we wanted to bring more income in this years accounts. Of course, for all we know the ultimate sale may be due to take place on or before 31.05.15 which would bring it into this years accounts.

There would usually be no advantage for FFP in delaying a sale because UEFA look at 3 consecutive years accounts although in our special case they are particularly looking at 2014 and then 2015.

 

[Chippy_boy]

Maybe it will go through without a hitch this time next year, who knows. If it does the fee is a very good one. But honestly now, do you think this is a 100% cast iron, no get out from either party? Remember we have been burnt by doing this before with Caicedo

It was a serious question, so I have no need to "pipe down" thanks, all you needed to do was answer the question.

As I said above I think it was a convenience for Valencia, who don't have the money until their takeover is complete, and while it may not kick in till next summer, I imagine those in charge of our club have it completely cut and dried, given how long the negotiations seem to have taken.

I really can't see anything to be worried about, but if you don't trust our suits to have this sewn up, that's your choice.

I'm sure a loan can be converted into a permanent deal outside of transfer windows anyway, which may well be the case with this one.

I think perhaps what you are struggling with is this.

Personally I am of the opinion that there will be some words in the contract that make it look like a loan and make the ultimate transfer in 12 months conditional on some criteria or other. Why? Because if it's been done to get around FFP, as we are being led to believe, then this sort of wording has to be in there so that it doesn't look like a cast iron sale with deferred payment terms, which would need to be accounted for in full in Valencia's current accounts.

However, I am not remotely concerned by this, if indeed it is true. Both City and Valencia (and indeed Negredo's agent) had a hand in this, and all parties are happy with it. I am certain therefore that the deal will complete in due course and the transfer will be done. Whatever words exist in the contract for the benefit of the accountants doesn't change the fact that we've agreed to sell and they have agreed to buy. Hence Valencia even referring to it as an obligation to buy. Of course he might get hit by a bus (god forbid) or whatever and in that case doubtless the deal is off, and equally doubtless, we would not have a problem with that.

Just because people think what I am suggesting doesn't make it scaremongering or suggesting cause for concern.

 

[Centurions]

Not read all the previous posts. This loan-sale deal was done to benefit us. We do not need the money on this years FFP, but it will be of more use on next year's FFP.

No it wasn't, it was done entirely to suit Valencia and is why possibly the fee was higher than anyone expected. The higher fee and goodwill generated with Valencia are the only positives for us.

 

[Chippy_boy]

Not read all the previous posts. This loan-sale deal was done to benefit us. We do not need the money on this years FFP, but it will be of more use on next year's FFP.

No it wasn't, it was done entirely to suit Valencia and is why possibly the fee was higher than anyone expected. The higher fee and goodwill generated with Valencia are the only positives for us.

Indeed so, and in January lets hope we are not regretting being £24m worse off than we would have been with a straight sale.

 

[Oyster28catcher]

FFP and loan to buy... staggered payments...

UEFA will soon have to ban pawn brokers and Cash Converter payday loans at this rate. The muddy waters are so muddy now they are a solid plateau of stinking ManUre filled tripe backwash.