tag:blogger.com,1999:blog-487486960623783530.post4555663551583579473..comments2024-02-29T09:58:18.342+01:00Comments on The Swiss Ramble: How Manchester City Could Break EvenThe Swiss Ramblerhttp://www.blogger.com/profile/11423088862174893998noreply@blogger.comBlogger106125tag:blogger.com,1999:blog-487486960623783530.post-42673093232490057552011-11-18T22:21:21.718+01:002011-11-18T22:21:21.718+01:00Like you, I await the Swiss Rambler's update o...Like you, I await the Swiss Rambler's update on Man City's finances. However, I can make an amateurish attempt to comment upon them and on City's chances of complying with UEFA's FFP rules which kick in from this season.<br /><br />The starting point is that City lost £197.5 million last season. Subtracting the 'additional exceptional' sum of £34 million leaves a loss of £163m.<br /><br />However, since May, City have spent a lot of money on new signings, somewhere in the region of £70m, most of them on five year contracts.<br /><br />As an expense, this is an extra £14m a year. In addition, the wages of these new signings are likely to total £0.5m a week or some £26m a year.<br /><br />Therefore, additional costs from transfers alone will add some £40m a year to the expenses. <br /><br />Leaving aside any more 'exceptional losses' this financial year 2011/12, such as Tevez, this means the loss is set to rise to over £200 (£163 + £40m).<br /><br />However, revenues will also rise this season by at least £60m, a combination of much more revenues from Champions League football rather than Europa League football and, also, the enhanced Etihad deal of some additional £27 a year as this deal replaces a less lucrative earlier Etihad deal.<br /><br />The result is that losses for this season 2011/12 are likely to be some £143m, excluding Tevez and excluding any new arrivals in January or enhanced contracts for existing players.<br /><br />Because of existing player contracts, it is likely that losses for the next two years will also be in the same barely sub-£150m level.Franknoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-82002352358319378712011-11-18T19:07:42.433+01:002011-11-18T19:07:42.433+01:00New financials released today, hope you can do ano...New financials released today, hope you can do another City review and hopefully comment on how in line we are we your FFP break even strategy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-50933793855061258982011-07-21T16:37:48.741+02:002011-07-21T16:37:48.741+02:00how have recent sponser and sales and less spendin...how have recent sponser and sales and less spending this summer afffected city could we perhaps have an article on that perhpas with comparisons to other clubs good article better than all on city or most at least how did EUFA the figures for the monitoring period alloud devation it seems random or is it to help some clubs and no others another thought is with regards to the fair value of the sponsrship deal how do we no what EUFA SAY IS FAIR VALUE IS FAIR VALUEAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-17806487380970740952011-07-13T12:27:35.183+02:002011-07-13T12:27:35.183+02:00http://www.guardian.co.uk/football/2011/jul/12/ars...http://www.guardian.co.uk/football/2011/jul/12/arsenal-manchester-city-premier-league<br /><br />Arsene is not happy about the naming rights' deal either. <br /><br />UEFA will have to comment nowGreekGunnernoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-29132700770183792532011-07-09T17:35:59.594+02:002011-07-09T17:35:59.594+02:00See your point but they are still testing the limi...See your point but they are still testing the limits of the FFP spirit.<br /><br />What's interesting with your projections is the fact that, even excluding Sportcity's profits - to me the most disputable source of profits in your analysis - Man City would only by £30m in the red. Such a loss, coupled with the fact that the trend would show a reduction in losses, would be enough for City to pass the FFP rules. <br /><br />What really worries me is the impact such a strategy will have on Arsenal (cf comment on your Real's article). Already, Man City has many players above the £100k/week mark vs one for Arsenal (Cesc). The Narsi contract extension fiasco shows Arsenal is already struggling to keep top club status with strong revenue growth or an improved cost mix. I am always amazed that Gazidis doesn't get more heat from Arsenal fans on the high proportion of non-salary costs in Arsenal P&L. <br /><br />Anyway, again thanks for your posts. By far, the most interesting economic analysis on European Football out thereGreekGunnernoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-12808682162234440862011-07-09T15:45:01.503+02:002011-07-09T15:45:01.503+02:00@GreekGunner,
The truth is that nobody knows, as ...@GreekGunner,<br /><br />The truth is that nobody knows, as the terms of the deal have not been announced. For example, I saw one reputable paper say that it was a 10-year deal for £300m, possibly rising to £400m, so it could be £20m for shirt sponsorship (which is in line with Liverpool, who have a fantastic tradition, but are not in the Champions League) and £10m for stadium naming rights (which is not completely unreasonable, given that Arsenal's deal was a very poor one).<br /><br />It will be very difficult for UEFA to assess the value of naming rights, as there are so few comparatives in the market, but unless the figure is totally absurd, I doubt whether they would take action, especially as all they could do is to remove the difference between perceived fair value and actual value. City could introduce all sorts of arguments, e.g. value of deals on the continent, value in other sports, etc.<br /><br />With regard to the campus, I agree that that is a longer-term project, but I would not have thought that the club's owners would invest so much, unless the net revenue is worthwhile and that would certainly be more than £1-2m.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-20612880697596713752011-07-09T14:55:04.932+02:002011-07-09T14:55:04.932+02:00ok that makes more sense.
Man U and Liverpool ge...ok that makes more sense. <br /><br />Man U and Liverpool get £20m per year for their shirt sponsorship. Less than Barcelona or Bayern but still the highest deal in the UK. The campus can't be worth more than £1-2m for a project that is years away from actual revenues. So that leaves £18m for naming rights. Considering Arsenal's own naming deal and the difficulties Chelsea and Tottenham had in selling theirs to advertisers, surely City off limit in relation to UEFA's rules no?GreekGunnernoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-89199078915723620062011-07-09T01:13:37.988+02:002011-07-09T01:13:37.988+02:00@GreekGunner,
Actually, the new Etihad deal inclu...@GreekGunner,<br /><br />Actually, the new Etihad deal includes several items: higher shirt sponsorship, stadium naming rights and a "campus". City have not yet provided a break-down of all the elements, but it seems likely that the naming rights is around £10-15m.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-51380461963286517952011-07-09T00:07:36.976+02:002011-07-09T00:07:36.976+02:00£400m over 10 years... Your £15m were on the low s...£400m over 10 years... Your £15m were on the low side<br /><br />http://news.bbc.co.uk/sport1/hi/football/14080388.stmGreekGunnernoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-67692519782052654652011-06-22T11:50:40.318+02:002011-06-22T11:50:40.318+02:00Pedantic point but FRS 10 is the UK accounting sta...Pedantic point but FRS 10 is the UK accounting standard (i.e. UK GAAP not IFRS), the IFRS equivalent accounting standard is IAS 38. However, most football clubs in England still use UK GAAP not IFRS.<br /><br />Interesting academic research on whether it makes sense to capitalize/amortize player registrations here: http://pastie.org/paste/asset/283954/Accounting__Valuation_and_Duration_of_Football_Player_Contracts.pdfJMBnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-24428785891207625922011-05-25T20:36:27.691+02:002011-05-25T20:36:27.691+02:00Hmmm - progress to date fairly good I'd say - ...Hmmm - progress to date fairly good I'd say - FA Cup winners, champions league group qualified, city developments on course, stevie ireland and richard dunne not terribly missed, and an admin team who at least seem to know their arses from their elbows - so couldn't be doing any better - isn't hindsight a wonderful thing though - Greener? OleGunnar? Care to respond?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-72373723639861986602011-03-03T15:12:16.090+01:002011-03-03T15:12:16.090+01:00The Deloitte Rich List 2011 showed Manchester City...The Deloitte Rich List 2011 showed Manchester City jump from 20th to 11th with a big jump in revenue. Critics have lined up to say City is buying success with a scattergun approach that is not sustainable and doomed. They fail to recognise the scope of the business model. To detractors and doubters of the scale of ambition for MCFC on and off the field, it has just been announced on the Official Site that:<br /><br />“New East Manchester Limited (NEM), Manchester City Council (MCC) and Manchester City Football Club are to step up consultation and engagement with the East Manchester community, as the working relationship between Club and Council was solidified yesterday.<br /><br />The previous partnership arrangement, which began with the signing of a Memorandum of Understanding in March of 2010, is to be formalised with the creation of a legally binding Joint Venture. The Eastlands Development Partnership, as the Joint Venture will be known, is the vehicle through which activity and development opportunities for land in and around the City of Manchester Stadium and its neighbouring communities, is delivered.<br /><br />Further to this, the Eastlands Regeneration Framework document has been set out, which outlines the overarching vision for the development of land held by the parties, which when combined, totals approximately 200 acres.”<br /><br />As I replied to an earlier post, more London 2012 Olympic Park in scale than Chelsea Village. The size of investment is staggering. ADUG’s investment in MCFC was central to a considered, long term commercial strategy underpinned by core social values. It another reason why City fans have such a high regard for Sheikh Mansour and what he has done for the Club and will do for the area and the City of Manchester. <br /><br />This adds a whole new dimension to football club activities. The question is what is the potential impact for Manchester City related to the EUFA Fair Play Rules? Any views?spinynoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-30879054863351599102011-02-01T14:30:07.451+01:002011-02-01T14:30:07.451+01:00Could an alternative tactic to lengthening player ...Could an alternative tactic to lengthening player contracts be to shorten them (at least in the near term) ?<br />Say you buy a player today on an 18 mth contract. Using current depreciation policy (for consistency and to comply with FRS etc) the book value is quickly returned to zero, as is the ongoing amortisation charge. Crucially this is achieved before the full impact of the FIFA regs hit.<br />At the end of the contract the player is retained by paying higher than average wages (already the case at City). Or possibly sold for a profit over book value.<br />If this tactic could work, the logic would be to invest heavily in top players right now, but only on short deals ? Short term P&L pain for long term gain.....Unknownhttps://www.blogger.com/profile/01835708718285099362noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-63689492530714062582011-01-13T22:28:12.747+01:002011-01-13T22:28:12.747+01:00Lol i am not one bit surprised not to see the rags...Lol i am not one bit surprised not to see the rags and arsenal fans suggesting that what if Man City do not finish in the top four this season now. <br />On another note, good article. As an accounting student and a new city fan (never supported anyone else before in football but only support city since everyone hates them, specially the football hirearchy of europe and english media which i hate) this article is optimistic but not beyond possible. A firm investing almost £2 billion in a project must have plans into place and proper planners as well. I dont beleive they would have considered the financial fair play into their plans however its not impossible to get around these rules. <br />All in all, not worried about financial progress of the club. Pretty pleased about the football progess as well. Every player signed by mancini is young and therefore will not need replacing for at least 5 years.Saimhttps://www.blogger.com/profile/02236764539556839586noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-42517599446845275362011-01-12T22:51:32.090+01:002011-01-12T22:51:32.090+01:00Discovered this blog through the BBC article about...Discovered this blog through the BBC article about UEFA fair play (as have many it seems from the comments above!). An excellent blog, and am very glad that I have found such a blog after searching for a while. I am now going to spend the remaining few hours of the day, in which I should be revising, to read on some of your other blogs. Please keep up the good work! :DAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-22290698315201652202011-01-12T16:44:39.854+01:002011-01-12T16:44:39.854+01:00I have ben involved with colleagues in producing a...I have ben involved with colleagues in producing a paper on the new UEFA regulations (for distribution throughout Europe to football clubs and other interested parties) and, with that background, I must say this is an excellent article - very well informed and intelligent insight.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-77812806312930534032011-01-12T14:55:13.415+01:002011-01-12T14:55:13.415+01:00I discover this via the BBC link. If there is a br...I discover this via the BBC link. If there is a broadsheet editor* out there reading this, please pay this guy to do a similar article for each premiership club. Launch it on your website and let the comments flow.<br /><br />Thank you.<br /><br />* not the Times obviously as we'd have to pay for that...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-64616766370985537222011-01-12T14:00:52.473+01:002011-01-12T14:00:52.473+01:00You have already set the bar high in terms of foot...You have already set the bar high in terms of football blogging, but this article amazes me with the level of painstaking detail.<br /><br />Good, no, great article, keep it upScottish Football Forumshttp://www.scottishfootballforums.co.uknoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-33178919366216538432011-01-12T10:25:38.515+01:002011-01-12T10:25:38.515+01:00Just a super article.
So well written and thought...Just a super article.<br /><br />So well written and thought out, loved it.Unknownhttps://www.blogger.com/profile/00474417866606069901noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-21133918888583677952011-01-12T05:00:32.254+01:002011-01-12T05:00:32.254+01:00Well researched and a great article!
The devil ar...Well researched and a great article!<br /><br />The devil are not just in the details but it could also be in the ifs-and-buts. Don't you think?In Gratitudehttps://www.blogger.com/profile/14034730363932879713noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-11868770626445066172011-01-12T03:29:30.821+01:002011-01-12T03:29:30.821+01:00good jobgood jobAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-1489180499863072212011-01-12T01:11:45.917+01:002011-01-12T01:11:45.917+01:00Link to the BBC article on UEFA Fair Play:
http://...Link to the BBC article on UEFA Fair Play:<br />http://news.bbc.co.uk/sport2/hi/football/9358589.stmMohsinhttp://news.bbc.co.uk/sport2/hi/football/9358589.stmnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-18858969495456771832011-01-12T01:10:48.809+01:002011-01-12T01:10:48.809+01:00I read this blog a while ago and have been reading...I read this blog a while ago and have been reading this for a good few months now, and just saw this article linked to a BBC article!<br />Well done dude, keep up the amazing work!!Mohsinnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-1506770264380243732010-12-07T14:39:37.292+01:002010-12-07T14:39:37.292+01:00The feeling is mutual!, but for the sake of comple...The feeling is mutual!, but for the sake of completeness:<br /><br />1. The over-paying argument was in reference to securing world-class players by a club who have little other than financial means to attract them.<br /><br />2. I do not feel that that the recognition of impairments is circumventing break-even tests. It is merely using a tool that was not as necessary before as what is the case now. Not having applied it previously because of the lack of necessity is not tantamount to circumventing? The 200m comparison (while I understand it is designed to illustrate a point) is not really an adequate comparison.<br /><br />3. Refer to the explanation in 1.<br /><br />4. This point is in reference to an anti-competitive example I used which is not really the underlying subject of this so not really worth harping on about.<br /><br />I appreciate the time taken to engage and hopefully some of the accounting masterminds that City's owners will no doubt make use of will raise similar debates. I look forward to reading your future entries!Dicky Yhttps://www.blogger.com/profile/07229891087048562976noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-27394932630513654632010-12-07T13:57:58.100+01:002010-12-07T13:57:58.100+01:00@Richard,
I feel like I'm bashing my head aga...@Richard,<br /><br />I feel like I'm bashing my head against the wall here, but I'll have one last go.<br /><br />1. I simply don't understand how anyone can believe that no club can secure a player "without over-paying". That just doesn't make sense.<br /><br />2. You're missing the point. What I am saying is that a club's accounts can be perfectly in order, but that still does not mean that they will be acceptable to UEFA, as the underlying transaction could be interpreted as being designed to manipulate their break-even test. The obvious example is the inflated sponsorship agreement, where £200m received could be booked as revenue, but would be marked down to fair value by UEFA. I am arguing that large-scale impairment would be handled the same way. No guarantee, of course, just my opinion.<br /><br />3. I believe that bringing forward expenses via impairment in this accounting period would be deemed as manipulation in terms of the UEFA template. Nothing to do with IFRS accounting.<br /><br />4. Of course other clubs can do the same and my views would equally apply to them. I am referencing City, because that club is the subject of this blog.<br /><br />While I am happy to enter into a decent debate with anyone (time permitting), I really don't want to get into a lengthy discussion, especially when the debate is just going round in circles, so this will be my last word on this subject.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.com