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Where is the money coming from?

onthetwo

Well-Known Member
May 19, 2006
4,582
3,406
I wonder what impact, if any, the no crowds until March will have on our future spending on transfers. Don't think Levy anticipated this.
i was thinking the same (and wondering if there was any insurance coverage in the event that the club had to close the stadium for an extended period)? Also re the cash flow point, biggest annual influx there would surely come from season ticket renewals in August so thats got to be in the tens of millions if my maths is right (something like 30k holders all paying roughly £1k up-front?)
 

Dazza86

Well-Known Member
Apr 28, 2011
335
613
We often hear that we have a lot of accessible cash as a club, and based on what we've currently spent, it's not like we would have needed an injection of cash to do what we're doing. It all fits within the realms of how our finances have been consistently analysed (lots of profit, healthy wages to turnover, key players not on the wage bill, low expenditure for years and one of two clubs to be approved by BoE for a loan on extremely beneficial terms).

If we do continue buying, it also fits in with what Levy has said for about a decade and the narrative of ENIC as an investment company. He's constantly said the market for players is like a bubble. With this correction, it makes sense Levy would jump on it, and I hope he does. Might see us slow down if the bubble starts to return though.

Financially, the core loss clubs are facing (so far) is the gate receipts. That hurts us becuase of the stadium mortgage, but we're very healthy with other revenue channels. I don't think the TV money is set to change, so the value of a better league position vs cost of players is even better now that it was before. Essentially, spend lower on players now for the same financial returns next year as there was last year (and the years before). The risk is reduced but the reward (in 12 months) should be the same.

I think it's Levy now being able to make the most of the hard times. Still hampered a little bit by the stadium investment but, even with that, we're way better off than other clubs around the world who really, really relied on that pre-COVID cash - be it player sales or gate receipts.
 

rez9000

Any point?
Feb 8, 2007
11,942
21,098
There are 2 things being mixed up Profit and Cashflow

In respect of profit, yes we will have taken a revenue hit in respect of COVID, but going in to this window, our expected revenues (broadcasting. advertising, sponsorships, prize money, tours etc.) would still significantly outstrip our costs (Salaries/player and ground depreciation/interest payments etc.). The new players will incur salary costs, but their transfer fees get depreciated over life of contract. It is not a case of spend £50m on Ndombele, bang £50m plus salary hit that years profit, but £10m hits each of the next 5 years profits.
There is room, and always has been room in our accounts for significant spend on players (in fact way more than we were doing even last summer), we have just never chosen to do it, but we are now taking the opportunity the current market offers.
Also I would expect us to recoup some towards end of window in respect of sales. We may even be prepared and planning on making a small loss this year (but in respect of FFP we have so much available space, it is totally irrelevant)

In respect of cashflow, this is where things are a little less clear because we did max out our cash by paying off £500m of the stadium (only borrowed half of the stadium costs and used up our cash reserves). We did have to take out a new loan from BoE, which whilst opportune due to the low interest rates, and it does have to be paid back in full early next year does still suggest we had a short term cashflow issue.
However in respect of cashflow timelines, cash would have been received recently for first half of this seasons broadcasting deal, and you don't pay off all the purchase price of players in one go, but in almost all cases it is structured (say 40% initially, 20% over next 3 years).
There could be an unexpected cashflow injection coming up, be it from external sources or just ENIC, however If we need to restructure some debt at end of season we have the assets to be able to support it, as we do need to repay the BoE loan, and debt is not a bad thing per se.

But in the main, one thing you can be assured, for all his faults, we are in good hands with the current owners in respect of profit and cash management, we will not be spending any more than we can afford, so just enjoy the owner actually doing what we have been crying out for him to be doing for the majority of his tenure, knowing full well that the club is not stretching itself anywhere near to the max.
That last paragraph is an excellent summation. Of all the clubs not owned by sugar daddies, the least susceptible to the vagaries of the current situation would be us - precisely because we have a chairman who (whatever faults he may or may not have) has his finger firmly on the pulse of the financial aspects of football and is a superb operator in that regard.
 

midoNdefoe

the member formerly and technically still known as
Mar 9, 2005
3,107
3,166
We’ve been caked for years and seemed to be willing to spend on the right player if it arose.
Now the market has dropped like a stone and we’re plundering. There are lots of clubs who have been operating at the higher ends of their turnover, who must surely be ripe for the picking now.

As others have said, we’re run by investors and we’re in their sort of market now.
 

idontgetit

Well-Known Member
Aug 21, 2011
14,387
30,710
Seems explainable by the club being run incredibly well in terms of finances. Was wondering though, whether maybe the stadium naming rights had been sorted out or something like that, with the deal being kept secret until the transfer window was finished. Amazon and Nike were reported to be interested back in April with figures like £25m a year getting floated.
 

Neon_Knight_

Well-Known Member
Jul 20, 2011
3,972
6,597
is FFP still enforced?
We might get a £10m fine if we report half our transfer spend as "capital infrastructure costs" and Tavistock Group / ENIC owned companies sponsor us for multiple times market value, then we refuse to cooperate until UEFA's 3-year window has passed. ;)

How does 'The Ultimate Finance Stadium' sound to you? If we get £400m over 10 years (Man City's Etihad deal)...who cares!
 

Neon_Knight_

Well-Known Member
Jul 20, 2011
3,972
6,597
Seems explainable by the club being run incredibly well in terms of finances. Was wondering though, whether maybe the stadium naming rights had been sorted out or something like that, with the deal being kept secret until the transfer window was finished. Amazon and Nike were reported to be interested back in April with figures like £25m a year getting floated.
The Emirates stadium deal is only £6m per year (£90m over 15 years), so £25m sounds like a decent offer to me. :greedy:
 

Spursmatty87

Well-Known Member
Jul 7, 2016
1,918
5,046
Personally I think we are spending this summer whilst targets are relatively cheap. Forgetting Bale for a second when over the last 5 years would you of got a premier league dm captain, one of the best rb in the premier league and the Spanish leagues lb of the year for under £60m.

It’s just to good for Levy to turn down. Don’t worry we’ll all be moaning again next summer when we spend nothing.
 

DogsOfWar

Well-Known Member
Jan 12, 2005
2,290
3,601
I think it's simply that he finally got his man in Mourinho, Jose has told him what he needs to achieve Levy's objectives for him (eg, a return to top four), and then Levy delivering those targets as he has 100% faith in him.
The transfer market dropping is just a bonus which means we might get a couple of extra players in within the budget.
 

dagraham

Well-Known Member
Sep 20, 2005
19,115
46,078
Feel like this thread is a bit premature as we haven’t actually spent that much yet.

Talk of big money being spent on 2 or 3 more players is just that at the moment. Talk.
 

Bulletspur

The Reasonable Advocate
Match Thread Admin
Oct 17, 2006
10,688
25,242
I'm interested because I'm a ST holder and pump loads of my hard-earned cash to the club.

You don't have to care.
And you do not have to pay. I find it amusing that people like you seem to suggest that you are forced to give away your hard earned money to the club for nothing. You made that choice, you pay you get to watch the games. You would have a point if you were getting nothing in return.
 
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peterballb

Well-Known Member
Aug 27, 2013
158
1,327
I have never been concerned with DL and the purchase of players by THFC. Levy does not generally agree to fees above market value, and, as we all know, generally tries to knock it down as far as he can. Clubs get in to trouble when they agree wages that are beyond what a player should make. I am not talking relative to other clubs, I am talking within an individual club. There has always, under Levy, been a clear wage structure. This is far more of a concern for our investors, than a net transfer spend of 100M. If the players you buy are worth more than that, the asset sheet will be fine.

As an aside, We have brought in Hojbjerg, Hart, Doherty, Bale and Reguilon. Others likely to follow. What the total net transfer number will be, I know not. Kyle Walker Peters was sold for what appears to be a fair amount (no doubt with a sell on attached). I cannot see us holding on to all three of Doherty, Aurier and Foyth. One will go. I do not see it being a loan. CCV and Rose do not have numbers. They will both be sold. Clarke and Sessegnon likely to be loaned. Skipp already out on loan.

Mourinho is right, there are too many senior players. (30 listed not including Skipp) What I expect to occur is that certain players will eventually become surplus to numbers, not because they are not good players, rather because there is just not enough playing time and some will just not be first or second choice. If Bergwijn develops as I expect he will, and supposing Dele knuckles down, we would have Kane, other striker, Dele, Bergwijn, Son, Bale, Lo Celso, Ndombele, Moura, Lamela - 10 players likely for 4 spots. Potentially Clarke, Sessegnon, Parrott in the wings. Senior players will be sold in January or next summer. I cannot see Moura getting playing time once Bale is in there. Lamela is far more influential off the bench than most others. And, if Dele does not knuckle down and perform to expectation, he will not last in a Mourinho environment. Value remains there for each of the players. What is a loss in the summer will be a profit in the New Year.

Levy will balance it all out and we'll all be wondering how the heck he managed to do it. Finish in the top 4 and all will be good. CL solves all sorts of problems.
 

stonebrow

Well-Known Member
Jun 28, 2012
1,014
2,738
Feel like this thread is a bit premature as we haven’t actually spent that much yet.

Talk of big money being spent on 2 or 3 more players is just that at the moment. Talk.
Exactly, we get the 'talk' of spending big on transfers every window but it rarely materialises or if it does its not in the areas of the squad we are in desperate need of investing.
 
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