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Everton Summer transfers 2021

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Zatara said:
If we sold the following (throwing numbers out)

Keane £20mil
Mina £20mil
James £10mil

= £50mil.

Then we could spend £50mil this window...as sales can be put into your books for that year but purchases can be staggered over contracts.

Meaning, if the White Deal was £20mil upfront and £30mil over the next 4/5 years.

We still have £50mil - £20mil upfront = £30mil to spend this window.

Lets say we then go to Dortmund and offer them £60mil for Bellingham all staggered over a 6 year contract at £10mil a year.

£30mil - £10mil = £20mil still to spend this window.

So FFP wise were fine...based on that.

However, dont forget we also have previous payments due for players signed in other windows....and we would also need to pay for the new players staggered payments next season and onwards.

So we dont actually know what the books look like really.

Moshiri does though, hes a superstar accountant so you would hope he knows what hes doing.

But we wouldnt need to sell DCL this summer to fund big moves...we could actually flog Gomes, Iwobi and other deadwood and still spend a small fortune.
Click to expand...
As an accountant there are so many half-understood misinterpretations in here both in terms of accounting for transfers and PL STCC rules (FFP only applies in Europe) but here goes:

STCC is a P&L control: revenue - operating costs (there are some exclusions for aspects of eg academy, charitable expenses etc.). It is NOT a balance sheet or cash flow control. It is generally measured on a 3 year rolling basis but 2019/20 and 2020/21 are being combined as a single period due to Covid and some Covid related losses (lost tv income, matchday revenues...) can also be ring-fenced.

EFC are still likely to be outside the accumulated allowed losses under the relaxed STCC based on estimated 2020/21 losses, even after capitalising past expenditure on BMD. We might be saved if PL provides further Covid relief or we might just take a chance on only getting a slap on the wrist punishments & move on.

Transfer fees paid are amortised in the P&L as an expense over the length of the contract on a straight line basis ie flat annual charges. The actual payment schedule is irrelevant except for cash flow, which is not our big issue given Moshiri. The fee is usually calculated including add-ons deemed likely to be paid but excludes any deemed unlikely (which will be recognised if and when they crystallise).

Wages, bonuses etc. hit the P&L accrued in line with the contract specifications.

Only the profit or loss on players sold (fees received - amortised book value & expenses of sale) hits the P&L and impacts on STCC. The timing/schedule of guaranteed fees received (staggered just like fees paid!) is relevant only for cash flow not STCC. Future add-ons are usually recognised only when received (assets are treated more conservatively than liabilities).

Any interest/finance charges associated with debt to raise the working capital for transfers or to cover operating costs also hits the P&L for STCC.

So, it is true that big transfer fees do not hit the P&L in one go but the combined amortisation & wages hit from big inbound deals is still substantial.

We are probably not making any significant offsetting profits on player sales unless we sell a few zero/low book value players like James, Bernard, Kenny, Delph, Davies...and, worryingly, DCL. Selling players like eg Keane or Mina is unlikely to generate significant profit v their amortised book value in the current weak global transfer market. They might generate funds but they do not help for STCC.

Apologies for out-Zataring Zatara!!!
 

MikeH72 said:
The funny thing is, I wouldn’t put it past our club to give extended leave to two players that have played about 100 minutes of football between them in the entire tournament.
Click to expand...

They'll be still training like so...they won't have had a break.
 

Zatara said:
If we sold the following (throwing numbers out)

Keane £20mil
Mina £20mil
James £10mil

= £50mil.

Then we could spend £50mil this window...as sales can be put into your books for that year but purchases can be staggered over contracts.

Meaning, if the White Deal was £20mil upfront and £30mil over the next 4/5 years.

We still have £50mil - £20mil upfront = £30mil to spend this window.

Lets say we then go to Dortmund and offer them £60mil for Bellingham all staggered over a 6 year contract at £10mil a year.

£30mil - £10mil = £20mil still to spend this window.

So FFP wise were fine...based on that.

However, dont forget we also have previous payments due for players signed in other windows....and we would also need to pay for the new players staggered payments next season and onwards.

So we dont actually know what the books look like really.

Moshiri does though, hes a superstar accountant so you would hope he knows what hes doing.

But we wouldnt need to sell DCL this summer to fund big moves...we could actually flog Gomes, Iwobi and other deadwood and still spend a small fortune.
Click to expand...

And the difficulty is obviously going to be which players can we sell. I struggle to see Keane going but Mina and James could be quite marketable.

It's also worth saying, 20m for Mina will probably be a pretty nice profit. I believe we signed for 28, but he's 3/5ths into a contract, so again that would show up a a 12m profit. That could allow you to buy the equivalent of a 50m player if you can spread the fees across 4 years.
 
BlueToff said:
James (as in world class level of playmaking ability in a player we could realistically get).
Click to expand...
If you read my earlier post you'd have seen I said we should go for Coutinho if James leaves. If James stays, we have other bigger priorities. I'd like both if we had the money, but we don't. Plus I think James will go. Prefer him to stay personally but, from the sounds of it, I think he wants out.
 
toffee66 said:
As an accountant there are so many half-understood misinterpretations in here both in terms of accounting for transfers and PL STCC rules (FFP only applies in Europe) but here goes:

STCC is a P&L control: revenue - operating costs (there are some exclusions for aspects of eg academy, charitable expenses etc.). It is NOT a balance sheet or cash flow control. It is generally measured on a 3 year rolling basis but 2019/20 and 2020/21 are being combined as a single period due to Covid and some Covid related losses (lost tv income, matchday revenues...) can also be ring-fenced.

EFC are still likely to be outside the accumulated allowed losses under the relaxed STCC based on estimated 2020/21 losses, even after capitalising past expenditure on BMD. We might be saved if PL provides further Covid relief or we might just take a chance on only getting a slap on the wrist punishments & move on.

Transfer fees paid are amortised in the P&L as an expense over the length of the contract on a straight line basis ie flat annual charges. The actual payment schedule is irrelevant except for cash flow, which is not our big issue given Moshiri. The fee is usually calculated including add-ons deemed likely to be paid but excludes any deemed unlikely (which will be recognised if and when they crystallise).

Wages, bonuses etc. hit the P&L accrued in line with the contract specifications.

Only the profit or loss on players sold (fees received - amortised book value & expenses of sale) hits the P&L and impacts on STCC. The timing/schedule of guaranteed fees received (staggered just like fees paid!) is relevant only for cash flow not STCC. Future add-ons are usually recognised only when received (assets are treated more conservatively than liabilities).

Any interest/finance charges associated with debt to raise the working capital for transfers or to cover operating costs also hits the P&L for STCC.

So, it is true that big transfer fees do not hit the P&L in one go but the combined amortisation & wages hit from big inbound deals is still substantial.

We are probably not making any significant offsetting profits on player sales unless we sell a few zero/low book value players like James, Bernard, Kenny, Delph, Davies...and, worryingly, DCL. Selling players like eg Keane or Mina is unlikely to generate significant profit v their amortised book value in the current weak global transfer market. They might generate funds but they do not help for STCC.

Apologies for out-Zataring Zatara!!!
Click to expand...

Just for clarity though, but showing a profit on a player on the balance sheet would be useful/helpful. So if Mina is currently down as an 8m asset and is sold for 20m, that will increase P&L by 12m and the assets of the business will be up £12m?
 
Barnfred 55 said:
If you read my earlier post you'd have seen I said we should go for Coutinho if James leaves. If James stays, we have other bigger priorities. I'd like both if we had the money, but we don't. Plus I think James will go. Prefer him to stay personally but, from the sounds of it, I think he wants out.
Click to expand...

I saw it mate, I just don't think Coutinho is the type of player we need even if James does go. I don't think he's anywhere near as good really and think we'd just be getting another injury prone 28/29-year-old.
 

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