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Swiss Ramble Saints report


whelk
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Would someone mind explaining Amortisation to me? Not quite following that and how we use it? :blush:

 

Cheers guys :o

 

Based on the principle that you pay a transfer fee up front which is their value, and that you get nothing back when their contract expires, so they're worth nothing at the end of that contract, the amount they are worth (in accounting terms) reduces each year:

 

[u]     Transfer fee          [/u]
Number of years of contract   = Reduction in value of player per year of contract (amortisation) 

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Would someone mind explaining Amortisation to me? Not quite following that and how we use it? :blush:

 

Cheers guys :o

 

Basically, if you buy a player for £20m on a 4 year contract, then £5m will hit the P+L in each of those 4 years (expense), with the rest of it hitting the balance sheet (asset).

 

It's just a way of spreading a cost over the life of the contract, rather than taking that cost all in 1 day when it's bought. It's the difference between an Income Statement and a Cash Flow statement.

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The club has often publicly stated that 2016/17, and not 2015/16, is the season we're targeting for significant commercial growth. That ties in with the 1 year Adidas deal and Veho sponsorship deal ending at the end of next season. Next year will be huge for us because if we can maintain a Top 8 finish AND half decent European campaign then that strengthens our 'brand' for these commercial opportunities. However, a mediocre league campaign (more likely to happen with European football in my opinion) may hamper that, though European football could help a little. But I doubt there is much money at all to strengthen the squad without sales so how we approach things will be interesting.

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TheSwissRamble is always such a good read. The Net Transfer comparison really highlights the success of our buying/selling/player-production over the past three seasons to the current point in time (compared to, say, Liv/Spurs), I.e. within a few points of these teams (exc. the performance-value of our salary commitments - which we'd 'win' anyway).

Edited by Donatello
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Wow - really demonstrates how relatively insignificant the fanbase is at this level compared to the Championship and below when you look at matchday revenue as a proportion of turnover!

 

Exactly what I thought. Makes you understand why protests etc against high ticket prices often fall on death ears.

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Much as I want Saints to finish as high as possible, the relatively low earnings from the Europa league set against possible repercussions in League form and cost of improving squad makes me wonder if qualification would be beneficial for the club

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Much as I want Saints to finish as high as possible, the relatively low earnings from the Europa league set against possible repercussions in League form and cost of improving squad makes me wonder if qualification would be beneficial for the club

 

Basically Daniel Levy and Poch's thinking in a nutshell.

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Just backs up that we're very unlikely to finish Top 4 anytime soon. £400m turnover v £100m. It's like a Prem v C'ship side. Ticket income £100m v £17m. Shirt sponsorship £45m v £1m. These are massive chasms that are never likely to be bridged and thanks to FFP can't be supplemented by outside investment.

 

Also shows that fans need to get used to seeing players being sold. It's part of our strategy!

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Much as I want Saints to finish as high as possible, the relatively low earnings from the Europa league set against possible repercussions in League form and cost of improving squad makes me wonder if qualification would be beneficial for the club

 

Exactly. I am not sure that being in the Europa is at all worth it. Swansea welcome to finish 7th or Villa the Cup.

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Much as I want Saints to finish as high as possible, the relatively low earnings from the Europa league set against possible repercussions in League form and cost of improving squad makes me wonder if qualification would be beneficial for the club

 

It's not that hard a choice, go for a high league place and receive some European expose, attract higher calibre players and perhaps more commercial income but likely drop a few places in the league the following season? Everton have suffered but Spurs haven't but it's something that needs to happen to advance the club.

 

I wonder if the club would introduce a few more younger players having to cope with Thursday night football. I'm sure if we get there, the club have plans in place.

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Much as I want Saints to finish as high as possible, the relatively low earnings from the Europa league set against possible repercussions in League form and cost of improving squad makes me wonder if qualification would be beneficial for the club

 

 

Basically Daniel Levy and Poch's thinking in a nutshell.

 

 

Exactly. I am not sure that being in the Europa is at all worth it. Swansea welcome to finish 7th or Villa the Cup.

 

Of course, if that is your way of thinking, exactly what are you trying to accomplish. We are not likely to win the league. This year may have been our best shot at Champions League football--at least for a while. Will we become a strange version of Arsenal and shoot for our 8th place trophy every year?

 

It's not that hard a choice, go for a high league place and receive some European expose, attract higher calibre players and perhaps more commercial income but likely drop a few places in the league the following season? Everton have suffered but Spurs haven't but it's something that needs to happen to advance the club.

 

I wonder if the club would introduce a few more younger players having to cope with Thursday night football. I'm sure if we get there, the club have plans in place.

 

This.

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Wow - really demonstrates how relatively insignificant the fanbase is at this level compared to the Championship and below when you look at matchday revenue as a proportion of turnover!

 

Some of us were pointing this out in the Championship when discussing ticket prices, I've still got the last Swiss Ramble article bookmarked and that compared the seasons since admin and mentioned the bad timing of the relegation as the tv deal (and parachutes) went up twice in our absence.

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Much as I want Saints to finish as high as possible, the relatively low earnings from the Europa league set against possible repercussions in League form and cost of improving squad makes me wonder if qualification would be beneficial for the club

 

Europa League earnings are one of the ways we can enhance our ability to spend more under FFP AND attract better players, Swansea are benefiting from that this season as they've just shed the not-good-enough or too-expensive signings they brought in for their Europa season and kept the better ones. We can do that but with a higher starting point, as we'd have qualified through the League and not the League Cup.

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Europa League earnings are one of the ways we can enhance our ability to spend more under FFP AND attract better players, Swansea are benefiting from that this season as they've just shed the not-good-enough or too-expensive signings they brought in for their Europa season and kept the better ones. We can do that but with a higher starting point, as we'd have qualified through the League and not the League Cup.

 

All good points. However, it does appear that we are nowhere near approaching the standard salary cap for the current year (56 million). Remember that even though our salary expense last year was over 60 million, a large chunk of that was not for players and, therefore, did not count against the FFP salary cap rules.

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Much as I want Saints to finish as high as possible, the relatively low earnings from the Europa league set against possible repercussions in League form and cost of improving squad makes me wonder if qualification would be beneficial for the club

 

The Europa League is a poisoned chalice ...........and very much not worth it financially........but maybe that's what EUFA wanted to protect the so called big clubs .......

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Europa League earnings are one of the ways we can enhance our ability to spend more under FFP AND attract better players, Swansea are benefiting from that this season as they've just shed the not-good-enough or too-expensive signings they brought in for their Europa season and kept the better ones. We can do that but with a higher starting point, as we'd have qualified through the League and not the League Cup.

 

The earnings are chump change compared to the champions league.............and where did it get Swansea? a season of mediocrity in 2013/14 and better in 2014/15........and as for Newcastle..........

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All good points. However, it does appear that we are nowhere near approaching the standard salary cap for the current year (56 million). Remember that even though our salary expense last year was over 60 million, a large chunk of that was not for players and, therefore, did not count against the FFP salary cap rules.

 

Are you sure? I only ask as Manchester City have removed all their non-football staff into a different company so are out of the finances of the football club. There is no reason to do this if they are not included anyway.

 

The earnings are chump change compared to the champions league.............and where did it get Swansea? a season of mediocrity in 2013/14 and better in 2014/15........and as for Newcastle.........

 

I would say Mike Ashley is a bigger factor than the UEFA Cup. This season Spurs are sixth and Everton are eleventh, probably finish ninth. They say that participation in the Europa league costs two league places. So I'd say it's still worth it especially if the club plans well for it and uses the whole squad.

 

From next season, there is an increase in money received for playing games in the Europa league, not sure how much though.

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The earnings are chump change compared to the champions league.............and where did it get Swansea? a season of mediocrity in 2013/14 and better in 2014/15........and as for Newcastle..........

 

As I pointed out, they qualified via League Cup so they didn't have the squad to challenge high up the league to begin with. They came 9th that season with 46 points, 15 points off 7th, and 26 points behind League qualification for Europa League in that particular season.

 

So "where it got Swansea" was into the Europa League, and a season later, to a record points total and being within 4 points of a likely Europa League place through league position with 3 matches to go.

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Europa League prize money is now 1:3.3 of the Champions League winner money from next season, compared to 1:4.3 previously.

 

Only £11m for winning it compared to £70m for winning CL, but the payments for just being in it have risen significantly compared to rises in Champions League money so it's less, but it's not as much less as it used to be.

 

Bigger picture however, is that all Premier League prize money from 2016/17 dwarfs even the Champions League money - the important thing is that the Europa League or Champions League money raises the threshold of the maximum clubs can spend on wages under FFP, giving us the chance to spend on more players or on better quality players if we want to.

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Europa League prize money is now 1:3.3 of the Champions League winner money from next season, compared to 1:4.3 previously.

 

Only £11m for winning it compared to £70m for winning CL, but the payments for just being in it have risen significantly compared to rises in Champions League money so it's less, but it's not as much less as it used to be.

 

Bigger picture however, is that all Premier League prize money from 2016/17 dwarfs even the Champions League money - the important thing is that the Europa League or Champions League money raises the threshold of the maximum clubs can spend on wages under FFP, giving us the chance to spend on more players or on better quality players if we want to.

 

Got the last bit..........so we can raise our wages about 1/7 th higher because of the extra money???? ........

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Got the last bit..........so we can raise our wages about 1/7 th higher because of the extra money???? ........

 

What it means (assuming Europa League qualification, additional prize money etc) is that we have the potential to spend more if we want to without breaking FFP rules, because our revenue is higher as a result of that additional prize money, and the allowable players' wage limit is calculated as a percentage of revenue.

 

Redslo has already pointed out that we're short of hitting the wage cap anyway because our wage figures include non-playing staff and the restrictions only apply to playing staff (i.e. we've got some wiggle room already, this just gives us more of it) and there's a bit more complexity than that as the limits are still being adjusted downwards year on year so teams are allowed time to adjust wages to meet the limits due to being held to existing contracts, but I'm sure he'll confirm if this is wrong. :)

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What it means (assuming Europa League qualification, additional prize money etc) is that we have the potential to spend more if we want to without breaking FFP rules, because our revenue is higher as a result of that additional prize money, and the allowable players' wage limit is calculated as a percentage of revenue.

 

Redslo has already pointed out that we're short of hitting the wage cap anyway because our wage figures include non-playing staff and the restrictions only apply to playing staff (i.e. we've got some wiggle room already, this just gives us more of it) and there's a bit more complexity than that as the limits are still being adjusted downwards year on year so teams are allowed time to adjust wages to meet the limits due to being held to existing contracts, but I'm sure he'll confirm if this is wrong. :)

 

I can confirm that there is more complexity but addressing it would require inside information about the club's finances so there is nothing we can do but speculate. My speculation is that the desire to get to (at least) a break even cash flow basis is the limiting factor not the wage salary cap. I believe that Liebherr does not want to keep putting in the 12 to 15 million pounds per year that she could put in under UEFA's FFP rules. This is supported by a comment I remember (but cannot now find) about how they had to recalculate everything last summer after each transaction. That only really makes sense if cash flow was the big concern...but I could be wrong.

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I can confirm that there is more complexity but addressing it would require inside information about the club's finances so there is nothing we can do but speculate. My speculation is that the desire to get to (at least) a break even cash flow basis is the limiting factor not the wage salary cap. I believe that Liebherr does not want to keep putting in the 12 to 15 million pounds per year that she could put in under UEFA's FFP rules. This is supported by a comment I remember (but cannot now find) about how they had to recalculate everything last summer after each transaction. That only really makes sense if cash flow was the big concern...but I could be wrong.

 

So to recap .....we know FA ......but the club is privately held so wouldn't expect anything different ..........

As long as the club is run professionally and legally I'm OK with that.........

 

 

Did the swallows come back ???

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