Net Spend guff...

[SteveH]

Good OP

Sadly wasted on many on here who just dont get concept of 'income and expenditure'.

 

[Everlasting Seconds]

1.) "Where does this money come from?". How about the hundreds of millions in revenue that we make from sources beside player trading. TV money, advertising, how about the fucking money that people pay to go to games expecting that their expenses get reinvested into the team that they are supporting?

Hundreds of millions? Over what period is that counted, the last 1.000 years put together?

 

[hodsgod]

Money which over the last ten years has virtually all been spent on players (Wages + transfer fees), and what hasn't has gone on infrastructure investment.

A net spend on players would mean we'd spent more on players than we earned surely? Or do you mean something else?

We have built a new trainng centre and bought many properties to allow the redevelopment of WHL! I wouldn't call that a lack of investment on nfrastructure. It's not a new stadium either of course.

What are you saying in your original post?

You can definitely have a net spend on player purchases and sales every season. It's clear that player sales are not the only revenue stream. I run a business and our investment on machinery is never ever recovered by selling the machines. It's recovered by revenue. In fact I don't know any business that makes money by trading capital assets. There may be some of course.

You can't have total outgoings greater than total incomings for a great many years, this is bloody obvious.

What do you make of Man U and Rio Ferdinand? They bought him for a record fee and got nothing for him, were they totally wrong to buy him?

 

[SpursManChris]

It was so common on here for people to cry, "sold Bale for 80 and spent 100, so we only spent 20 net" and it used to piss me off so much. I get what they wanted, they wanted Bale's move to be justified, but you can't just
spend 80+ net (160+ million) without bringing in either, A, a shitload of random non-big name players or B, one or two big name players.
A: You really think it's easy to identify 160 million worth of suitable non-big name players?
B: Why would any big names come to us? Who did you want us to buy, fucking Messi and Ronaldo? Bloody hell mate.
You wanted us to spend 160 million pounds? Really? Are you mad?

 

[JUSTINSIGNAL]

Regarding wages I wonder how many players have contracts that see them increase or not depending on champions league footy? Most of them I would presume.

I can see why it's hard to get rid of players sometimes, most won't earn what they get at Spurs. It's frustrating but Levy's right to try and squeeze as much as possible from sales, then we can spunk the proceeds on world class talent like Vlad or Pauli*.....

* buying players has never been a science of course just ask Rodgers...

This is a good point. I see many people moaning on here when we are negotiating for players saying "levy stop haggling over the wages or fee and pay what is needed". Then they moan that we can't get rid of players because they are on big wages.

The point is Levy does haggle to protect the club against players who flop. If we just pay what the buying clubs and player want then it will make it even harder to get rid of players who don't make it. And we will end up writing off millions on bad investments. Which would have a knock affect on our future transfer budgets. Basically it makes terrible business sense.

 

[jonathanhotspur]

I think a lot of people get frustrated that we've got a billionaire owner who rarely, if ever, dips his hand in his pocket - unlike many other clubs who do have a net spend for this reason (and don't go out of business). Obviously the fact is that we're run by an investment company so that's never going to happen, but again that's a reason many people get frustrated with ENIC and want new owners.

Just enjoy the fucking sermon, will you?

 

[CowInAComa]

People keep writing they want us to have a net spend on players each year as if that should be the goal... what a load of bollocks.

You can't have a net spend on players each year without going out of business, not in the way people mean it anyway. Net spend in the narrow sense that it's bandied on here means you're spending more on players then you're getting by selling them, so where's this money to come from? In the real world player expenditure should include wages and at the moment we spend all the money we make on players, meanwhile we've borrowed a little to build some infrastructure.

In fact spending more on players than you get for them is a sign of failure, it's the lower league clubs that all suffer from a net spend on players, and that's because they keep spending on players who when sold turn out to be worth less than what they cost. Explain to me a business that thrived by spending more on stock than it got from selling it. The whole notion is inane. The only successful clubs with a net spend on players are those for whom money is no object because they're being bankrolled, and UEFA's trying to clamp down on that. Of the other big clubs none of them have a net spend, but they do have bigger incomes.

Part of the problem is that people look at transfer fees and not wages when estimating player expenditure, and then they only consider income from player sales. Which is absurd of course. But even by that idiotic measure spending more on players than you get back is stupid, as it means you're presumably also paying higher wages, but now this has to be sustained by other revenue. Ah, but we could qualify for CL if only we risked a bit... he who dares wins Rodders!!! Except that spend more on the hope that we qualify, or after we did qualify, and then don't qualify the spending more doesn't go away, we're spending more on those players for every year of their contract, and so then we have to get rid if we can, which means a fire-sale, which means a positive net spend (whoopy-do!), and now where's that money we want to spend to get us in the CL? It's going on the interest we have to pay to furnish the debt we got into when we didn't qualify for CL every year! Genius.

Using the must spend logic, people would actually have been much happier had we sold Bale for 40m and had a nice big net spend figure.

 

[CowInAComa]

Our issue is not that we dont spend enough. Its that we are shit at spending what we do wisely.

We've never come out the back of a big spending spree in better shape than we were before. Either with the Bale money or the Bentley/Bent etc summer.

 

[talkshowhost86]

Maybe the people demanding 'net spend' are simply unhappy with the state of the goals at WHL?

BOOM!

 

[Everlasting Seconds]

If I do 15 minutes hard work for a payment of 5 pounds, and subsequently pop into the nearest pub for a pint, after I've paid for that pint...

A) Do I have a surprising 6 pounds left to spend on 1.5 more pints, or
B) Have I already spent 4 pounds on beer, left with only 1 pound to cover dinner & flowers for the missus.

 

[Bulletspur]

Why would people think that this prevents us from getting rid of players?

Is that a serious question?

 

[dontcallme]

I agree with the OP in general but it does fail to take into account that we have other forms of income than player sales.

We pay the 2nd highest ticket prices in the league. Levy is often praised for negotiating good sponsorships deals. Then there are revenue from TV, competition participation etc.

I'm not too fussed about net spend. I don't want us to strive to spend more than we sell on transfers but there are times we let ourselves down.

In the summer we sold Bale we got over-excited and bought lots of new shiny toys. It seemed to be strategical to spend what we'd earnt.

Fast forward 2 seasons to a new manager who will naturally want to being in a few of his own players and suddenly he has little money to spend. A big bid for Schneiderlein might have made Poch's transition as manager a lot smoother but we just didn't do it.

 

[dontcallme]

Is that a serious question?

He likes asking questions.

 

[Wheeler Dealer]

City have the best accounts in the world that can produce a set of accounts that

Areas you can get money from aside from player trading

Ticketing
Sponsorships
Prize money
Endorsements (maybe under sponsorships)
Merchandise
TV & Image rights
Hospitality services

Off the top of my head. I'm sure there are dozens more

Or the Man City way of releasing £350m turnover based on so called commercial activities...

 

[Blake Griffin]

Sorry, just realised that I was less than clear in the OP and so have amended it. Here's the 2nd para edit:

"You can't have a net spend on players each year without going out of business, not in the way people mean it anyway. Net spend in the narrow sense that it's bandied on here means you're spending more on players then you're getting by selling them, so where's this money to come from? In the real world player expenditure should include wages and at the moment we spend all the money we make on players, meanwhile we've borrowed a little to build some infrastructure."

Hope that's a clearer.

it's not clear to me. our wages to turnover ratio is about 60%-65% last time i checked. transfer fees are recouped from sales. so the only way we'd be spending more than we bring in is if that other 35%-40% was being spent as well.

 

[The Apprentice]

Open your bloody chequebook Levy.

 

[millsey]

Our issue is not that we dont spend enough. Its that we are shit at spending what we do wisely.

We've never come out the back of a big spending spree in better shape than we were before. Either with the Bale money or the Bentley/Bent etc summer.

That's because you have to replace world class players with world class players. You can't replace with even 20 good players. World class win games again and again. Prob is we can't attract ones already world class. I imagine the club thought lamella would be there in a couple of years

 

[millsey]

Open your bloody chequebook Levy.

Yes let's go down the Leeds and Portsmouth route. Ye ha!

 

[dagraham]

There was I thinking we are a football club, when if fact it appears we are a playing trading company.

Football clubs are run as businesses, but you can't compare players to stock. On the books they will most likely be classed as intangible assets anyway.

I'm not sure anyone is suggesting we should operate a net spend on players every season or break our wage structure, just that if we want to compete at the business end of the table if might be necessary to actually spend some of the money generated from the biggest ever T.V deals to date on the playing squad, rather than all on the infrastructure.

In other words, an eye on the short/medium term as well as the long term. And a few more calculated risks taken. You can run a tight ship, but you can't eliminate the element of risk. Risk is inherent in business. Every business from a local corner shop to Apple had to take a risk at some point in order to grow.

 

[The Apprentice]

Yes let's go down the Leeds and Portsmouth route. Ye ha!

I just have this wonderful vision in my mind of Levy slamming his chequebook down on the table and drawing his gold embossed Parker pen out of his blazer, like the sword from the stone.

Cheque books and fax machines.