Financial results

[Lilbaz]

We are closer to the revenue of Villa than we are Liverpool. They really need to look at City's Commercial deals as well.

 

[225]

I thought Abramovich wrote off all that Chelsea debt?

 

[Lilbaz]

I thought Abramovich wrote off all that Chelsea debt?

No he created Chelsea holdings which has all the debt. He hasn't writ off a penny. Not nice to say but it would be nice if something happened to him. Maybe not death but arrested or something.

 

[Lilbaz]

http://www.theguardian.com/football/2010/may/19/roman-abramovich-chelsea-loan-debt

Old article explaining it.

 

[Lilbaz]

So how much moneys worth has our academy produced in the last 4 years? Caulker £9m, Livermoore £9m, Kane? Mason? Rose? Townsend? Carroll? Pritchard? Then you have the next lot who are just starting to get first team football.

Very good move by Levy making the training ground first, stadium second. Really starting to think that when the stadium opens we will be in a very good position to challenge. Hopefully Poch can stay and make the first team a bit more successful. But it is looking bright. Levy must be happy. Even though we are not quite there yet.
The changes to the rules for agents and the fact that they will not get a peeny for transfers for under 18's will only be another boost.

 

[TH1239]

Our financials have been boosted largely because of the game-changing television rights deal. That accounts for virtually all of our additional revenue last year. By 2017, we'll probably be in the top 10 in Deloitte's money league, possibly surpassing Juventus.

Levy's biggest decision in the coming years will be how he allocates the television revenue in our expenditures. The 2016-2019 deals are likely to net a club finishing 6th somewhere in the neighborhood of 140 million pounds, up 83 million pounds from what the club earned just two seasons ago for finishing 5th. It seems assumed on this forum that ALL of our television revenue surpluses will be going toward delivering a 100% debt free stadium by 2020, which would be unparalleled, as far as I'm aware, in the professional sports world (if someone can show me an example of a professional team in the United, States, Asia, or Europe financing a stadium ENTIRELY on incoming team revenues, I'd love to see it).

Now a debt-free stadium opening in 2020 may sound great to many here, but you need to understand that clubs throughout the EPL will take that television revenue and invest virtually all of the new incoming money on transfer fees. We've seen it already this past summer, and this summer, we will see the top 5 teams engage in spending that will probably shock people here. Even a team like West Ham can legitimately spend 200+ million pounds NET in the next 5 years improving their first team. So, if we are intent to ONLY spend what we bring in via player sales, we probably won't come close a top 4 finish after this season again for many years, and it wouldn't be unreasonable to expect us with a few injuries and players leaving (frankly it should be expected that players who can earn far more at bigger clubs who can spend to improve the team around them in their primes wouldn't wait until 2020 to see the club really "go for it) to perhaps fall down to the mid-table ranks for brief period.

 

[KenilworthSpur]

Net assets will include all assets (both tangible and intangible ) less total liabilities. Can't analyse it properly though until the full results are released.

Player valuations will be intangible assets though........and in the case of Ade and Soldado that's quite accurate .

Am I correct in thinking that intangible also means unsellable...

 

[SlickMongoose]

Am I correct in thinking that intangible also means unsellable...

Nope.

 

[Lilbaz]

Our financials have been boosted largely because of the game-changing television rights deal. That accounts for virtually all of our additional revenue last year. By 2017, we'll probably be in the top 10 in Deloitte's money league, possibly surpassing Juventus.

Levy's biggest decision in the coming years will be how he allocates the television revenue in our expenditures. The 2016-2019 deals are likely to net a club finishing 6th somewhere in the neighborhood of 140 million pounds, up 83 million pounds from what the club earned just two seasons ago for finishing 5th. It seems assumed on this forum that ALL of our television revenue surpluses will be going toward delivering a 100% debt free stadium by 2020, which would be unparalleled, as far as I'm aware, in the professional sports world (if someone can show me an example of a professional team in the United, States, Asia, or Europe financing a stadium ENTIRELY on incoming team revenues, I'd love to see it).

Now a debt-free stadium opening in 2020 may sound great to many here, but you need to understand that clubs throughout the EPL will take that television revenue and invest virtually all of the new incoming money on transfer fees. We've seen it already this past summer, and this summer, we will see the top 5 teams engage in spending that will probably shock people here. Even a team like West Ham can legitimately spend 200+ million pounds NET in the next 5 years improving their first team. So, if we are intent to ONLY spend what we bring in via player sales, we probably won't come close a top 4 finish after this season again for many years, and it wouldn't be unreasonable to expect us with a few injuries and players leaving (frankly it should be expected that players who can earn far more at bigger clubs who can spend to improve the team around them in their primes wouldn't wait until 2020 to see the club really "go for it) to perhaps fall down to the mid-table ranks for brief period.

You are forgetting one crucial point. The premier league ffp was brought in to restrict spending for the very reason that we had gotten a massive tv deal. They did not want all of the money going straight into players pockets. These rules are still in place. Each team will only be allowed to increase their wages by £4m a year. Wether these rules will be relaxed for the new tv deal is yet to be seen but I doubt it. Not while many clubs still hold massive debts.

 

[Dinghy]

So, if we are intent to ONLY spend what we bring in via player sales, we probably won't come close a top 4 finish after this season again for many years, and it wouldn't be unreasonable to expect us with a few injuries and players leaving (frankly it should be expected that players who can earn far more at bigger clubs who can spend to improve the team around them in their primes wouldn't wait until 2020 to see the club really "go for it) to perhaps fall down to the mid-table ranks for brief period.

I really don't believe that to be the case. If needs be levy will put back the debt free status. He will not allow us to fall to mid-table obscurity. The financial model that he seems to be following is to have us at least looking like we are on the brink of breaking into the real big-time. He has convinced investors that whilst we are not quite perennial top-4 we are at least perennial challengers. This means that whilst we can't quite compete with the top-4 we are far a better bet than the rest and hence our income/sponsorship deals etc come with a premium (just not yet CL premium). If we do get into the top-4 at a discount it is a bonus (our year in the CL was such a bonus and has helped with this image)
The thinking behind this is to put us in the very best position once we do become debt-free with a brand spanking new training ground and stadium. At that point we will really be able to go toe to toe with the very richest clubs in the world petro dollars or not.

 

[Lilbaz]

Also we have already spent a massive amount on the stadium, well over £100m. We should get possibly another £100m for naming rights and more for pre selling corporate boxes etc...

Even if we have to borrow £200m it will be over 20 years at a low interest rate. Arsenal still haven't paid off theirs because it is simply not worth it.

Will we need to put all of the tv money into the new stadium? I doubt it, but we might. It will be up to Levy to decide.

 

[TH1239]

You are forgetting one crucial point. The premier league ffp was brought in to restrict spending for the very reason that we had gotten a massive tv deal. They did not want all of the money going straight into players pockets. These rules are still in place. Each team will only be allowed to increase their wages by £4m a year. Wether these rules will be relaxed for the new tv deal is yet to be seen but I doubt it. Not while many clubs still hold massive debts.

This is a meaningless regulation in the grand scheme of things because all this does is restrict wage growth using EXCLUSIVELY television rights revenues by 4 million pounds a season. It does NOTHING to restrict a club from taking a 90 million pound check for television rights and using all of it for transfer fees. It does NOTHING to restrict a club from then taking commercial revenues and incoming transfer fees and redirecting that income to cover wage increases far above 4 million pounds a season. How else do you think so many teams in the league have seen their wage bills go up so much this past year (far above 4 million pounds)?

 

[dagraham]

Am I correct in thinking that intangible also means unsellable...

Not at all. Assets are classed as either tangible (buildings, equipment etc) or intangible (intellectual property rights for instance).

Within football clubs players are just classed as intangible.

 

[Lilbaz]

This is a meaningless regulation in the grand scheme of things because all this does is restrict wage growth using EXCLUSIVELY television rights revenues by 4 million pounds a season. It does NOTHING to restrict a club from taking a 90 million pound check for television rights and using all of it for transfer fees. It does NOTHING to restrict a club from then taking commercial revenues and incoming transfer fees and redirecting that income to cover wage increases far above 4 million pounds a season. How else do you think so many teams in the league have seen their wage bills go up so much this past year (far above 4 million pounds)?

Sorry you stated "the EPL will take that television revenue and invest virtually all of the new incoming money on transfer fees". Which they cannot as they need to pay wages and are limited of how much of the tv money they can spend on wages. They are also limited to how much of a loss they can make.
I know exactly how the FFP works. Yes they can increase their wages beyond £4m a year but only if they increase other forms of income. So if they cannot increase other forms of income, they are limited to an increase in wages of £4m a year. Put it in perspective Kevin Nolan is on £3m a year.

 

[225]

Not at all. Assets are classed as either tangible (buildings, equipment etc) or intangible (intellectual property rights for instance).

Within football clubs players are just classed as intangible.

As you've said, intangible assets are those which lack a physical presence or substance.

For the benefit of elaboration (for others), it's essentially something that can't be physically handed over in entirety. Players are classified as 'intangible' as you can't own a human being, so clubs can only own the playing rights to that player during the course of the contract. The rights aren't physical, so therefore the rights to a player are intangible.

Tangible assets are the opposite; they are things which have a physical presence (as per dagraham's comment).

Fixed assets are "property, plant & equipment" - essential items used in the day to day running of a business, so perhaps a training ground & equipment, stadium, etc. This would possibly include Spurs Lodge on our books, until we find a use for it or sell it.

Liquid assets are anything financial - bills, cash, loans, investments. This would be transfer fees owed, money in the bank, etc.

Think that's about the jist of it

 

[StartingPrice]

...include Spurs Lodge on our books, until we find a use for it or sell it.

It's going to be a school for the autistic, I think.

 

[Spursidol]

You are forgetting one crucial point. The premier league ffp was brought in to restrict spending for the very reason that we had gotten a massive tv deal. They did not want all of the money going straight into players pockets. These rules are still in place. Each team will only be allowed to increase their wages by £4m a year. Wether these rules will be relaxed for the new tv deal is yet to be seen but I doubt it. Not while many clubs still hold massive debts.

Absolutely correct. All the PL clubs are now bound to increase wages by no more than £4m pa funded by TV revenues (and as can be seen from my earlier post that's the largerst revenue stream by far - and the fastest growing, other revenue streams currently growing slowly) for the forseeable future as agreed by the 2/3rds of PL Chairmen and therefore binding.

So the idea of splurging it all on on transfer fees for more players on a largely 'flat' wages bill plus FFP rules, means its just not going to happen.

Of course once we have our new stadium bult we may be using some of the TV revenues to pay off the stadium and some of the increased mtch day revenues on wages (subject to bankning covenants etc), but that's a few years away

 

[Spursidol]

Thought a couple of figures might be useful to put things into perspective:

Gross Income/Revenue :

Year to June 2014 - Total £181m (Match day and Commercial £86m, TV £95m,)
Year to June 2013 - Total £147m (Match Day and Commercial £90m, TV £57m ),

So we've got an increase in TV revenues of £38m - but can only use £4m of that increase for increased wages.

We've also made a profit pre player trading so can use some of that for extra wages - but of course if we make a loss in the year to June 2015 on player trading (cough.... Paulhino, Soldado et al) we need to pay for that out of the pre player trading profits, otherwise we need to watch FFP rules....and indeed repaying that part of the stadium not funded by a stadium naming rights deal.

Also worth considering that if we pay £30m pa for the next few years on new players on 3 year contracts (providing we can afford their wages of course) - then the aggregate amortisation in P& L will increase by £30m by year 3. A big increased cost which needs to be covered by increased income - otherwise we risk problems with FFP rules, and I suspect £30m pa may be too high

So Levy's got some wriggle room to increase wages and ditto transfer fees ....but maybe not as much as some might think

Many of the other clubs need to consider what money they need to repay debts (although not Spurs) -which I suspect is one of the reasons why the PL chairmen voted to limit the amount of money from the hugely increased TV deal could be spent on player wages. In short other clubs need to repair their balance sheets. So some other PL Clubs maybe have less 'wriggle room' than Spurs ?

 

[TH1239]

If EPL Financial Fair Play is what some of you claim, please explain how Everton's wage bill increased 6.3 million pounds last year, while they spent nearly 30 million pounds net in transfer fees? How did West Ham see their wage bill increase by nearly 8 million pounds last year, while also nearly spending 30 million pounds net in transfer fees? It's not like these teams saw huge explosions in gate receipts or commercial revenue. It appears to me that these clubs are just shifting funds around to cover heavy wage increases beyond the much lauded 4 million pound figure that is associated with FFP, and there is nothing this regulation can do about it.

Again, I think people are going to be shocked when at least 8 EPL teams this summer see heavy transfer spending, far greater than anything we've seen yet. It wouldn't remotely surprise if the top 5 spent a combined 400 million pounds net to basically snap up all top tier available talent across the continent. I expect the likes of Stoke, West Ham, and Everton to at least match their spending this past summer (somewhere between 20-30 million pounds).

I expect us to spend more or less what we bring in via sales. Given the length and complexity of negotiations, I expect a summer very similar to last, where we spend later in the window for lesser known players whose contracts are expiring (Stambouli) or those who have relatively affordable release clauses (Fazio).

If we want to succeed in the coming years, it'll seemingly have to come from keeping players like Eriksen, Vertonghen, Lloris, and Kane at the club for starters, and then having others break through and improve collectively over time.

 

[Lilbaz]

If EPL Financial Fair Play is what some of you claim, please explain how Everton's wage bill increased 6.3 million pounds last year, while they spent nearly 30 million pounds net in transfer fees? How did West Ham see their wage bill increase by nearly 8 million pounds last year, while also nearly spending 30 million pounds net in transfer fees? It's not like these teams saw huge explosions in gate receipts or commercial revenue. It appears to me that these clubs are just shifting funds around to cover heavy wage increases beyond the much lauded 4 million pound figure that is associated with FFP, and there is nothing this regulation can do about it.

Again, I think people are going to be shocked when at least 8 EPL teams this summer see heavy transfer spending, far greater than anything we've seen yet. It wouldn't remotely surprise if the top 5 spent a combined 400 million pounds net to basically snap up all top tier available talent across the continent. I expect the likes of Stoke, West Ham, and Everton to at least match their spending this past summer (somewhere between 20-30 million pounds).

I expect us to spend more or less what we bring in via sales. Given the length and complexity of negotiations, I expect a summer very similar to last, where we spend later in the window for lesser known players whose contracts are expiring (Stambouli) or those who have relatively affordable release clauses (Fazio).

If we want to succeed in the coming years, it'll seemingly have to come from keeping players like Eriksen, Vertonghen, Lloris, and Kane at the club for starters, and then having others break through and improve collectively over time.

Because they hadn't reached the max wages they were allowed due to ffp.

If we had not used the £52m pa + commercial i.e our commercial was £86m but we only spent £42m of the tv (total wages £138m) last year then that would mean we could increase our wages this year by £14m. (£10m we hadn't used + £4m increased allowance). £152 m allowed on wages this year. Which we don't spend near and I doubt we will as we have other expenses.

The new tv deal doesn't change the fact that the increase of wages as part of tv revenue can still only increase by £4m a year.