Liverpool Message Board
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It is all very confusing, having read a number of articles and seen a host of statistics it just gets cloudier. The income seems to constantly go up despite having no champions league which I assume is something to do with the better Sky premier league deals and cup runs but surely is the case for all clubs not that ours is doing well in that department. The worrying thing is the next year will show the loss on Aquilani and obviously in a few years that Andy Carroll signing will show a horror account stat. What we do know for sure is that the wage bill has been drastically reduced, players such as Maxi, Joe Cole and Jovanovic who were pulling an unbelievable £17m per year between them to sit on the bench will be off the list. That is the biggest key for building for the future was replacing the bench earners with Suso's, Sterling's, Wisdom's, Shelvey's who arguably offer more already then their equivalent senior counterparts.
If you think in terms of squad players, would you rather Sterling or Cole? Wisdom or Kyriagkos? Shelvey or Poulsen? Assaidi or Jovanovic? It is an easy choice for us to see now. I think this will eventually show the an upturn in the books in 2-3 years but writing off a lot of loses on the way might make more bad reading short term with a long term gain.
I've been thinking about that Hobs. Aquilani wont hit the books and Carrol might not either. Well not in the way you think. If the cost of purchasing those two has already been paid a year or so ago then that money is gone and already reported in that financial year. Their sale (for whatever it is/ was) will bring a little bit of cash in and is reported in a different financial year. There is also the bonus of their wages etc. not showing on the books.
So I think (hope really) their sale will be reported in a positve light. The true damage of those transfers was the initial cost against their contributions to the club. F all in reality.
The increase in revenues is a good thing especially without Europe but sadly some of that is down to cup runs etc. Basiclly more games and we might take a dip this year.
I'm mixed on the £46m loan from FSG. On one side it's a good thing because we no longer owe anything related to the previous regime's stadium mess / rip off / con. Yes it was a con. Hicks own Architects were running the project. On the other side I don't like the fact that we owe money. It's almost like a first little signal that FSG want the club to stand on its own and they will not pump money in without expecting it back. That too can be seen as a good thing but we all agree that the squad still needs considerable investment. So how will that be funded? At least it's interest free and not a Glazer deal so I think I'm cautiously comfortable with it.
i want to fuly understand the costs. They appear very high at first glance. Ayre himself says that player movement (transfers) and wages are the biggest draw on the bank balance and I'd just like to undertsand the detail of it.
- 1 Reply to Colyn
I think the impact of Aqua on the books is likely to be minimal as he was well into his contract, while for Carroll we could see some red ink for a while.
Normally the clubs spread the accounting costs of a players purchase over the life of the contract signed, so Carroll costing s £35M on a 5 year deal actually shows up in the books as a £7M (pus wages) charge for example. That charge stays until either his contract is up or he's sold. So right now while we are not accounting for his wages, we're still paying that £7M per year.
But the good news (well kinda) is that Carroll is now in his 3rd year of his contact, so as long as we get at least £14M for him this summer, his sale will actually show up as a profit on the books (as the other 21M has already been written off.
Of course this assumes the costs are spread evenly across the contracts which may not be the case. Most of the time it is spread, but there may be good reasons to not do it by even amounts each year. For example, if we had cash on hand, and to avoid FFP sanctions we could well have written down a much larger portion in years 1 or 2 of his contract. That in fact might be likely as we had cash in hand from the Torres sale and the club would have anticipated (or should have) that writing it down before FFP reporting began would give us more freedom now FFP reporting has begun.
The same is true on the other side of the ledger however. We think we make huge amounts when a player is sold (like Torres) or a new deal is signed (Warrior) but again these are often spread out. I have no idea what the arrangement on Torres was, but it’s highly unlikely that Chelsea just wrote a cheque and dropped it in the post, most likely for cash flow (good for both clubs) we were or are being paid in installments, with each one only being booked to revenue when the money comes in.