red thru&thru
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- Mar 2, 2004
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FFP has changed from this year to FFP sustainability rules where 90% of the clubs turnover can be spent this year, if our turnover is £540m this year and wages are reduced due to Europa League to £325m New owner adds more than £100m because we don’t even have a working Cashflow right now, hence the loan deals in January. For the record 90% of £550m is £495m which could be spent on Wages, Agent fees, Administrative costs, and amortised transfer fees. So when you say selling players, does not give you another £200m it doesn’t quite work like that, the new rules are designed to get all clubs running at 70% wage, transfer, Admin and agent fees combined to gross turnover in 3 years time. This year we could sell players like Dean Henderson (20m) Antony Elanga(15M), S Mctominay (25m) all on 4 year contracts and receive £15m back on our transfer kitty yearly which could then be multiplied by 4 if we bought any new players this summer, effectively adding £60m to a transfer budget. These players cost the club nothing so there is no cost amortised to be subtracted from the amortised sale price. To be clear your right about the debt and the £60m in loses for a new owner but these costs and the interest payments would have been part of administrative running costs so eg if the Glaziers carried on and the wages were £325m, interest £20-30m on existing debt, the actual loss not only affects FFP but the cash in the bank and our ability to pay more than the sustainability rule.
Our transfer budget would be 325+25+120m loss so we would have £25m multiplied by 5 if we spent £125m on one player an and agent fees so a budget of probably £115m plus 10% of that as agent fees. So just like Todd Boehly with Chelsea who spent nearly £600m by putting players on 7 year contracts and amortising costs by 7 years, New owners if they cleared the debt, reduced interest payments and put working capital in the bank, they could effectively spend £400-500m combined over two transfer Windows
Nice breakdown. Thanks for that.
I'm also going to assume, incorrectly maybe, that in the future, clubs will bring down their asking price, knowing that clubs can only spend 70% of their revenue, including the agent fees, etc.
So, even though the amount a club can spend on transfers is reduced, players asking price will also reduce. In theory, meaning we can still buy 4 to 5 players a season and not have to spend £250+ a year, like you have to now.