[Albion] Panic Ye Not on the finances.

[El Presidente]

Purchases this summer £145m
Average contract length 4.5 years
Annual amortisation expense £32m

Player sale profits
Undav £22m (25-3 book value)
Gross £7.5m (8-0.5 book value)
Leonard £0.5m
Total £30m

Net transfer cost this season £2m

#TrustInTony

 

[Official Old Man]

£2m.
According to Man City, if the concourse staff serve 3 seconds faster we could cover that this season.

 

[Simster]

Cheers K.

It's just fking unbelievable isn't it? Look at the state of our squad. How the hell does a club like ours genuinely compete with Villa, West Ham never mind Arsenal, Man U or Chelsea. And yet we do. We really really do.

 

[tedebear]

Yep, its pretty clear that this would be near net net zero on the BS. I'd be interested in the monthly operating costs though, salaries expenses and so on...

 

[Couldn't Be Hyypia]

Purchases this summer £145m
Average contract length 4.5 years
Annual amortisation expense £32m

Player sale profits
Undav £22m (25-3 book value)
Gross £7.5m (8-0.5 book value)
Leonard £0.5m
Total £30m

Net transfer cost this season £2m

#TrustInTony

What about amortisation from previous years? Are there none because of the huge profits on player sales?

 

[studio150]

To me this looks like a net spend of £115m (not that I doubt the net £2m for PL purposes) I must try this on my wife for when I buy a music box set, by telling her, that I plan to keep the box set for at least 10 years, therefore I've only spent £15.

 

[Baldseagull]

Purchases this summer £145m
Average contract length 4.5 years
Annual amortisation expense £32m

Player sale profits
Undav £22m (25-3 book value)
Gross £7.5m (8-0.5 book value)
Leonard £0.5m
Total £30m

Net transfer cost this season £2m

#TrustInTony

The question is whether the players bought are an asset, or a liability, in the long run.
I can see Rutter leaving us for less than we paid, but it doesn't seem likely to with any of the others, unless they run down their contracts, or suffer a bad injury.
So, whilst the window saw a lot of cash leave the club, even if we sell for less than we paid for a couple, I think we will do better than a few percent interest it may have got sitting in a bank, and have the pleasure of seeing some great football.
My only worry from the step up in spending, is making it tougher for the young ones to break into the side, might mean we see the Gyokeres situation a bit more.

 

[Guinness Boy]

Purchases this summer £145m
Average contract length 4.5 years
Annual amortisation expense £32m

Player sale profits
Undav £22m (25-3 book value)
Gross £7.5m (8-0.5 book value)
Leonard £0.5m
Total £30m

Net transfer cost this season £2m

#TrustInTony

Does that include Ferdie and O’Reilly?

 

[Bob!]

Purchases this summer £145m
Average contract length 4.5 years
Annual amortisation expense £32m

Player sale profits
Undav £22m (25-3 book value)
Gross £7.5m (8-0.5 book value)
Leonard £0.5m
Total £30m

Net transfer cost this season £2m

#TrustInTony

Another £65m in the next day or two for Ferdi and O'Riley though

 

[portlock seagull]

Tony’s not just a mathematician. He’s a magician too!

 

[Dibdab]

To me this looks like a net spend of £115m (not that I doubt the net £2m for PL purposes) I must try this on my wife for when I buy a music box set, by telling her, that I plan to keep the box set for at least 10 years, therefore I've only spent £15.

It depends if you can sell that box set for the same or more than you paid for it? If the spend is making you money it is an asset.

 

[Kalimantan Gull]

What about amortisation from previous years? Are there none because of the huge profits on player sales?

Good question. And also brings the query - do you have to amortise, or can you place the entire cost in one year if you have big sales to offset it? I understand that the assets are on the books so need to be accounted for, but that can hurt you in terms of PSR accounting

 

[Hiheidi]

Another £65m in the next day or two for Ferdi and O'Riley though

We'll get a bit of incoming too from Gilmour (and I assume we're trying to sell Lamptey and Moder).

 

[GT49er]

We'll get a bit of incoming too from Gilmour (and I assume we're trying to sell Lamptey and Moder).

Hope not!

 

[zefarelly]

Yep, its pretty clear that this would be near net net zero on the BS. I'd be interested in the monthly operating costs though, salaries expenses and so on...

I'd love to help balancing the books, but I can't eat any more sausage rolls.

 

[Cheshire Cat]

Purchases this summer £145m
Average contract length 4.5 years
Annual amortisation expense £32m

Player sale profits
Undav £22m (25-3 book value)
Gross £7.5m (8-0.5 book value)
Leonard £0.5m
Total £30m

Net transfer cost this season £2m

#TrustInTony

But what about the cash flow?

Or have we decided not to pay our VAT bills this year?

 

[Martlet]

Purchases this summer £145m
Average contract length 4.5 years
Annual amortisation expense £32m

Player sale profits
Undav £22m (25-3 book value)
Gross £7.5m (8-0.5 book value)
Leonard £0.5m
Total £30m

Net transfer cost this season £2m

#TrustInTony

We can also carry the profits forward from last year … there’s no question Tony and Paul know what they are doing here.
Pushing their financial advantage when others in the league are under the cosh

 

[huzzah]

Purchases this summer £145m
Average contract length 4.5 years
Annual amortisation expense £32m

Player sale profits
Undav £22m (25-3 book value)
Gross £7.5m (8-0.5 book value)
Leonard £0.5m
Total £30m

Net transfer cost this season £2m

#TrustInTony

(no disrespect to @El Presidente ) I [expletive] hate the "dont worry ... amortisation" view on the finances. it is short-termism, that would make the average financial shenanigans of the CEO finagling his bonus blush.

that amortisation basically means that in 2025, through 2029 we have 32m less per year that we can spend according to PSR, and imagine we do the same the next year, it's 64m less we can spend.
eventually it piles up. Am I correct in thinking you can choose how you amortize (so long as it's not more than 5 years), so it may be in our advantage to take the hits early in order to put ourselves in a position in 3 years time when loads of amortizing clubs realize they have to sell and cannot buy because they have 3 years of amortisation piled up.

* note - I'm not an accountant, in fact I failed my accounting exams, so I am probably wrong about this. but the viseral feeling I have is still there.

 

[beorhthelm]

(no disrespect to @El Presidente ) I [expletive] hate the "dont worry ... amortisation" view on the finances. it is short-termism, that would make the average financial shenanigans of the CEO finagling his bonus blush.

that amortisation basically means that in 2025, through 2029 we have 32m less per year that we can spend according to PSR, and imagine we do the same the next year, it's 64m less we can spend.
eventually it piles up. Am I correct in thinking you can choose how you amortize (so long as it's not more than 5 years), so it may be in our advantage to take the hits early in order to put ourselves in a position in 3 years time when loads of amortizing clubs realize they have to sell and cannot buy because they have 3 years of amortisation piled up.

* note - I'm not an accountant, in fact I failed my accounting exams, so I am probably wrong about this. but the viseral feeling I have is still there.

thats the thing, we wouldn't. arguably we shouldn't need to, by buying in prospective talent that will grow, only need a large spending every 3 or 4 years, or after a particularly fruitfull selling season.
we're not following the Chelsea model of massive spending every year, where indeed you end up amortising your future budget away.

 

[Eeyore]

(no disrespect to @El Presidente ) I [expletive] hate the "dont worry ... amortisation" view on the finances. it is short-termism, that would make the average financial shenanigans of the CEO finagling his bonus blush.

that amortisation basically means that in 2025, through 2029 we have 32m less per year that we can spend according to PSR, and imagine we do the same the next year, it's 64m less we can spend.
eventually it piles up. Am I correct in thinking you can choose how you amortize (so long as it's not more than 5 years), so it may be in our advantage to take the hits early in order to put ourselves in a position in 3 years time when loads of amortizing clubs realize they have to sell and cannot buy because they have 3 years of amortisation piled up.

* note - I'm not an accountant, in fact I failed my accounting exams, so I am probably wrong about this. but the viseral feeling I have is still there.

This is true. But the consideration is that during those years there would also be transfers out. This year the club have made £30m. I suspect in those years a single transfer out would cover it. In recent years it has more than covered it. In some cases multiple times.

What we see here is the next stage. Albion having bowled themselves into this position to make a further step in the Premier League. It's basically the step West ham and Aston Villa (somehow) were/are at. Albion continue to invest in players with whom they should re-coup or indeed make money in further transfers on. I could see it being an important part of the next step. Always a gamble (I think Rutter is) but, as ever, a calculated one.