Leicester Bid £3 /£5/£7.5 million for Ulloa

[Icy Gull]

How does this work? Surely any transfer fees received during the current accounting period ending 30th June (eg for Bridcutt, Barnes and El Abd) go towards reducing the losses for 2013/14?

So you are suggesting that last season's fees received for transfers are outside of whatever budget has been arranged for this season and by the same token any money received for Ulloa this year will go towards covering this season's losses?

I think we may be in a relegation battle if this is the case, and we can kiss goodbye to a shot at the playoffs.

You paint a depressing scenario, hope you are very wrong. We need to acquire some quality players and with FFP seeming to have no influence over any other clubs we are not going to do that on the cheap. Using transfer fees to bolster the budget seems a no brainer to me, but I am no accountant.

 

[DavidinSouthampton]

Depends entirely on the player. If he is not going to perform as a result then get rid. Bennett for us and Suarez for Liverpool have proved that good negotiations with the player and them being reasonable can work, but it doesn't always. I don't think that Bloom has ever exuded the signs of a man to give in.

Totally agree. Some players will just knuckle down and get on with it, others are less able to do so.

 

[Titanic]

Err, no. No, I wasn't suggesting that.

I was simply suggesting that there are consequences of whatever decision the club makes.

Take Bridcutt and Ulloa, for example. If it's true (or even if Leo simply believes it to be true) that the club's hand in selling Liam was, to some degree at least, forced by Bridcutt going on strike, then I would suggest that if Leo wants away, he may now be more tempted to go on strike to make it happen than he may have before seeing Liam use that tactic. S'all.

and all I am saying is that if Leo 'wants away' then the club will let him go for the best price they can achieve. Not exactly rocket science, is it?

and certainly not a stick to beat the club with, which you seem to be intent on.

 

[Goldstone1976]

and all I am saying is that if Leo 'wants away' then the club will let him go for the best price they can achieve. Not exactly rocket science, is it?

and certainly not a stick to beat the club with, which you seem to be intent on.

I think we're in violent agreement actually! I certainly don't intend to beat the club with a stick, big or otherwise, and reading my posts again, I don't believe I have done so. But if you read them that way, I can only say that wasn't my intention

 

[Thunder Bolt]

Err, no. No, I wasn't suggesting that.

I was simply suggesting that there are consequences of whatever decision the club makes.

Take Bridcutt and Ulloa, for example. If it's true (or even if Leo simply believes it to be true) that the club's hand in selling Liam was, to some degree at least, forced by Bridcutt going on strike, then I would suggest that if Leo wants away, he may now be more tempted to go on strike to make it happen than he may have before seeing Liam use that tactic. S'all.

We know that Liam put in a transfer request, but there is nothing to say he went on strike. In fact, the club were at pains to say he was working hard in training. In his own interest to keep fit, yes, but if I remember correctly, he didn't play because he wasn't selected.
He wasn't selected because Oscar & Jonah felt he wasn't in the right frame of mind, not because he refused to play, or even said those words.
Semantics? Maybe, but there is a difference. Ulloa has a different temperament, & who's to say that he wouldn't react in a different way, particularly if he was offered an improved contract?

 

[Mackenzie]

We know that Liam put in a transfer request, but there is nothing to say he went on strike. In fact, the club were at pains to say he was working hard in training. In his own interest to keep fit, yes, but if I remember correctly, he didn't play because he wasn't selected.
He wasn't selected because Oscar & Jonah felt he wasn't in the right frame of mind, not because he refused to play, or even said those words.
Semantics? Maybe, but there is a difference. Ulloa has a different temperament, & who's to say that he wouldn't react in a different way, particularly if he was offered an improved contract?

Bridcutt told staff at the Albion that he wasn't in the right frame of mind to play.

I thought that was a pretty shitty thing to do at the time, and I still do. Bridcutt

http://www.theargus.co.uk/sport/10980273.Bridcutt_is_a_bargain__claims_Poyet

 

[DarrenFreemansPerm]

Bridcutt told staff at the Albion that he wasn't in the right frame of mind to play.

I thought that was a pretty shitty thing to do at the time, and I still do. Bridcutt

http://www.theargus.co.uk/sport/10980273.Bridcutt_is_a_bargain__claims_Poyet

This, in truck loads.

 

[Thunder Bolt]

Bridcutt told staff at the Albion that he wasn't in the right frame of mind to play.

I thought that was a pretty shitty thing to do at the time, and I still do. Bridcutt

http://www.theargus.co.uk/sport/10980273.Bridcutt_is_a_bargain__claims_Poyet

The Argus reported that incorrectly (surprise surprise) as Jonah said he had spoken to Liam & reported back that he wasn't in the right frame of mind. It's on one of the Player interviews by Jonesy.

 

[drew]

So you are suggesting that last season's fees received for transfers are outside of whatever budget has been arranged for this season and by the same token any money received for Ulloa this year will go towards covering this season's losses?

I think we may be in a relegation battle if this is the case, and we can kiss goodbye to a shot at the play-offs.

You paint a depressing scenario, hope you are very wrong. We need to acquire some quality players and with FFP seeming to have no influence over any other clubs we are not going to do that on the cheap. Using transfer fees to bolster the budget seems a no brainer to me, but I am no accountant.

I might be wrong but I think you'll find that transfers fees paid and received can be spread over a number of years. For example, if we paid £10m for a player on a four year contract then £2.5m of the contract applies to each accounting period of the contract. Equally, if we receive a transfer fee in instalments then no doubt that would be spread over the years of the instalments.

 

[Weststander]

I might be wrong but I think you'll find that transfers fees paid and received can be spread over a number of years. For example, if we paid £10m for a player on a four year contract then £2.5m of the contract applies to each accounting period of the contract. Equally, if we receive a transfer fee in instalments then no doubt that would be spread over the years of the instalments.

It's not "can", there are mandatory, backed by company law, accounting rules covering all this.

The transfer fee paid is written off on a straight line basis over the term of the players contract.

Unless they leave in the meantime, where the remainder not yet written-off is all 'charged' to the Profit and Loss Account in the year of sale at once.

Transfer fees agreed on sales are fully 'credited' to P&L in the year of sale.


Payment terms between clubs have no effect on the P&L in any year. That is a cash flow issue, merely settling the trade debtor or creditor.

'Add-ons' for example, for goals scored, being capped, promotion - are completely disregarded until they happen.

 

[drew]

It's not "can", there are mandatory, backed by company law, accounting rules covering all this.

The transfer fee paid is written off on a straight line basis over the term of the players contract.

Unless they leave in the meantime, where the remainder not yet written-off is all 'charged' to the Profit and Loss Account in the year of sale at once.

Transfer fees agreed on sales are fully 'credited' to P&L in the year of sale.


Payment terms between clubs have no effect on the P&L in any year. That is a cash flow issue, merely settling the trade debtor or creditor.

'Add-ons' for example, for goals scored, being capped, promotion - are completely disregarded until they happen.

Thanks for dotting the 'i's and crossing the 't's.

 

[wellquickwoody]

Do you not think cash from sales helped fund the training ground.

Half empty by any chance?

 

[Alex Alex Dawson oo! oo!]

I might be wrong but I think you'll find that transfers fees paid and received can be spread over a number of years. For example, if we paid £10m for a player on a four year contract then £2.5m of the contract applies to each accounting period of the contract. Equally, if we receive a transfer fee in instalments then no doubt that would be spread over the years of the instalments.

If we pay £10m for a player on a four year contract then, similar to the depreciation of tangible assets such as motor vehicles, fixtures & fittings, equipment etc, this cost is capitalised (amortised) in equal amounts over the period of the contract - ie at £2.5m per year. Thus, £2.5m appears in the Profit & Loss account of the annual return to CH (and the FFP submission) for four years as an expense just like utility bills, business rates salaries, NI, cost of stock for the club shop etc. Any signing on fee is similarly charged to the P&L account over the contact period.
If the player is sold before the end of the contract then any profit/loss is calculated from the transfer fee received less any unamortised portion of the transfer fee originally paid - ie if he's sold for £4m after two years then there's a loss of £1m which will appear as a cost/expense in that years P&L account.
I've no idea about the payment transfer fees by instalments; there's no evidence of this in the BHA FC annual accounts except where a further fee becomes payable if a player has made a certain number of First Team appearances or other specified future events have occurred (eg International debut perhaps). The additional fees are amortised as above over the remaining period of the player's contract.

 

[Alex Alex Dawson oo! oo!]

So you are suggesting that last season's fees received for transfers are outside of whatever budget has been arranged for this season and by the same token any money received for Ulloa this year will go towards covering this season's losses?

I think we may be in a relegation battle if this is the case, and we can kiss goodbye to a shot at the playoffs.

You paint a depressing scenario, hope you are very wrong. We need to acquire some quality players and with FFP seeming to have no influence over any other clubs we are not going to do that on the cheap. Using transfer fees to bolster the budget seems a no brainer to me, but I am no accountant.

The club/company (BHA FC Ltd) can set whatever budget the Board determines.

However, from an accounting (and FFP) viewpoint transfer fees on player sales are 'credited' to P&L account in the year of sale. Hence the proceeds from any sales made between 1st July 2013 and 30th June 2014 will appear in the 2013/14 annual accounts when they are filed with CH in early 2015 and the FFP return that's due with the FL by December 2014. Assuming the club is going to post another hefty £m's loss then the financial impact of the sale of Bridcutt, Barnes and El Abd is that the fees received will go to mitigate the annual loss for 2013/14.

In a couple of week's time it all starts again from zero except that the maximum loss permitted under FFP is reduced to £6m pa inclusive of any debt/equity conversion. If we were making a profit then that could be carried forward but the Albion hasn't posted one of those since 1975.

 

[Lawro's Lip]

Just wondering. Roughly how many clubs do make a profit?

 

[sparkie]

The club/company (BHA FC Ltd) can set whatever budget the Board determines.

However, from an accounting (and FFP) viewpoint transfer fees on player sales are 'credited' to P&L account in the year of sale. Hence the proceeds from any sales made between 1st July 2013 and 30th June 2014 will appear in the 2013/14 annual accounts when they are filed with CH in early 2015 and the FFP return that's due with the FL by December 2014. Assuming the club is going to post another hefty £m's loss then the financial impact of the sale of Bridcutt, Barnes and El Abd is that the fees received will go to mitigate the annual loss for 2013/14.

In a couple of week's time it all starts again from zero except that the maximum loss permitted under FFP is reduced to £6m pa inclusive of any debt/equity conversion. If we were making a profit then that could be carried forward but the Albion hasn't posted one of those since 1975.

So if, for example the permitted FFP loss is 8 million for 1 year, and we lost 5 million, then we couldn't carry the 3 million ( 8 - 5 million ), which we finished within the limit, over to the next year and add it to the next permitted loss ?

Not good, if that's the case.

 

[Creaky]

So if, for example the permitted FFP loss is 8 million for 1 year, and we lost 5 million, then we couldn't carry the 3 million ( 8 - 5 million ), which we finished within the limit, over to the next year and add it to the next permitted loss ?

Not good, if that's the case.

Would you want to carry last year's excess loss over to this year!

 

[Albumen]

apparently 7.5 million plus addons and very near to going through I have just heard

According to my sauces, close to doing the deal at £8 million with add ons

40 hours later: Any closer?

 

[Blue Valkyrie]

Hope we don't sell Ulloa.

 

[sparkie]

Would you want to carry last year's excess loss over to this year!

I mean that if Tony can afford it and wants to, could he add any amount we came in under the FFP limit this year, to next year's permitted loss.