2019/20 Marcel Brands

[JimmyK]

With STCC rules regarding player amortisation, it makes better financial sense to hold onto them for the extra year rather than sell them at sizable losses, and subsequently find ourselves hamstrung when it comes to balancing the books at the end of the financial year.

If we were able to improve our commercial revenue year-on-year and not be so reliant on the windfall that is our income from increased TV revenues, this wouldn't pose such an issue.

It doesn’t though, that’s utter hogwash that everyone is swallowing for some reason because they read it somewhere once.

McCarthy, Mirallas and Besic’s book value will be zero, paying them wages for another year and releasing them on a free will not help us at all, it’s just throwing money away. We’ve also made big book profits on Gana, Lookman, vlasic, browning and maybe more this year, it would be an ideal time to take the small hit on someone like Bolasie as it would just slightly reduce profit rather than leading to an actual loss.

I’m not saying brands isn’t doing a good job, or that it’s easy to get rid of these players, but it definitely seems odd that we can’t move any of them on. While I agree with @mikeh72 that they’re generally not very good, they’re certainly good enough to be playing at a decent level. We’ve moved on a lot worse before, so something has gone badly wrong here.

 

[Groucho]

If it's been put to bed, time to swiftly move on.

 

[mill]

It doesn’t though, that’s utter hogwash that everyone is swallowing for some reason because they read it somewhere once.

McCarthy, Mirallas and Besic’s book value will be zero, paying them wages for another year and releasing them on a free will not help us at all, it’s just throwing money away. We’ve also made big book profits on Gana, Lookman, vlasic, browning and maybe more this year, it would be an ideal time to take the small hit on someone like Bolasie as it would just slightly reduce profit rather than leading to an actual loss.

I’m not saying brands isn’t doing a good job, or that it’s easy to get rid of these players, but it definitely seems odd that we can’t move any of them on. While I agree with @mikeh72 that they’re generally not very good, they’re certainly good enough to be playing at a decent level. We’ve moved on a lot worse before, so something has gone badly wrong here.

Their book value won’t be zero. The book value is the capitalised cost of the player amortised over the period held.

Each year a proportion of the fee (in addition to wages) flow through the income statement. If the player is released the entire cost will flow to the income statement.

All else being equal, from an accounting perspective, our profit for that year will be reduced even if cash flow isn’t and we’d be reducing wages in subsequent years (if we didn’t sign any more players). All this would impact STCC.

If we can’t get a fee for whatever reason, loans are a good way to ensure we do not make a loss (or at least mitigate losses).

 

[tim cahill]

Calm down for God's sake. I'm not saying they have the same personalities or ethics, I'm simply pointing out the similarities in the negotiating techniques.

It was tongue in cheek mate but the negotiating techniques analogy doesn’t work. If a club doesn’t sign a player then they walk away and nothing has changed. If a country goes for no deal then it’s like Brands then kneecapping our current players as well as not making the signing he wanted.

Better off leaving politics analogies out of a football forum though as it’ll just go off topic.

I’m confident Brands will bring in what we need.

 

[JimmyK]

Their book value won’t be zero. The book value is the capitalised cost of the player amortised over the period held.

Each year a proportion of the fee (in addition to wages) flow through the income statement. If the player is released the entire cost will flow to the income statement.

All else being equal, from an accounting perspective, our profit for that year will be reduced even if cash flow isn’t and we’d be reducing wages in subsequent years (if we didn’t sign any more players). All this would impact STCC.

If we can’t get a fee for whatever reason, loans are a good way to ensure we do not make a loss (or at least mitigate losses).

Surely the book value only covers the period where you’re paying off their value? That’s how it would work in other businesses, they have a book value for the duration of their original contract, over which period you assigned them a value. Once the original contract is over their book value becomes zero Surely, because you have no way of assigning them a value for accounting purposes.

 

[mill]

Surely the book value only covers the period where you’re paying off their value? That’s how it would work in other businesses, they have a book value for the duration of their original contract, over which period you assigned them a value. Once the original contract is over their book value becomes zero Surely, because you have no way of assigning them a value for accounting purposes.

Well, there is no real way of knowing but I doubt that their value would be amortised to zero. Also not entirely sure whether or not the contact cost (signing on fees, wages etc) isn’t capitalised (I’ve got a feeling it might be as the player is the asset rather than an employee). In that case they’ll deffo have a book value.

 

[mill]

Just found this:

A company search on Manchester United plc accounts for the year ended 31 July 2000, using ICC searchreveals that the costs associated with the acquisition of players' registrations are capitalised as intangible fixed assets in the balance sheet. These are then fully amortised in equal annual instalments over the period of the player's initial contract.
The balance sheet shows the cost and amortisation of player's registrations, with a note to the effect that the Bosman case will mean values being reduced, because a player can now walk away from a club at the end of his contract.
Turnover in the accounts excludes transfer fees. Staff costs in the P+L account include signing on fees payable to players representing part of their remuneration, and are charged to P+L evenly over the football seasons covered by the player's contract.
I haven't looked at any other football club accounts, but ICC has got them all!

Wages expenses as normal. And registration costs amortised over life of initial contract. So I would think their book values will be residual.

 

[Yarrgh]

Better off leaving politics analogies out of a football forum though as it’ll just go off topic.

This will be the most sensible thing I read on GOT today.

It's not the sense I was looking for, but I'll take it.

 

[davek]

Dont think any of them were on close to 100k a week Dave. Sandro is, and Bolasie is reportedly north of 80k. Martina is League 2 level making 40k/week. When an oil tanker spills in the ocean, you can try and clean it up but there’s going to be some damage you can’t get rid of.
Remember when Sunderland tried to get rid of Rodwell but he wouldn’t take a paycut to move? Same thing here.

That's a point destroyed by acknowledging inflation in wages in the game over the intervening period.

Let’s think a little more about this one Dave. What prem teams, if any, would actually want a Niasse level player. I’ll go with Brighton. Then let’s look at Brighton’s wage bill. Their absolute top earner is on 50k/week. And you expect a club like that to pay actual money for Niasse AND have him on 50k/week. He’s not worth that to any bottom third club.

Well you said it "an actual player like him for an actual club like that"...they'd just have to match their own wages to do it. More clubs than them too.

The lowering of the bar for Brands is unacceptable.

 

[TyphooToffee]

It was tongue in cheek mate but the negotiating techniques analogy doesn’t work. If a club doesn’t sign a player then they walk away and nothing has changed. If a country goes for no deal then it’s like Brands then kneecapping our current players as well as not making the signing he wanted.

Better off leaving politics analogies out of a football forum though as it’ll just go off topic.

I’m confident Brands will bring in what we need.

I wouldn't normally associate tongue-in-cheek comments with an (assumed) remainer, but I get your point.

 

[JimmyK]

Well, there is no real way of knowing but I doubt that their value would be amortised to zero. Also not entirely sure whether or not the contact cost (signing on fees, wages etc) isn’t capitalised (I’ve got a feeling it might be as the player is the asset rather than an employee). In that case they’ll deffo have a book value.

Ok so neither of us are accountants so we might not be using the correct terminology but my point clearly stands on that basis.

Mirallas has been here about 8 years, McCarthy 6, Besic 5. None of them will have been given huge signing on fees when resigning contracts, so small fees should AT LEAST cover their value in the accounts. That’s the point, this idea that we’ll be in all sorts of trouble if we sell them for a combined £6m is pure fallacy, we’ll be posting no loss on it and saving their wages. It’s an argument that keeps being used but it has no foundation.

Again, this might not be the right thread for it because I’m not blaming brands, but I was agreeing with Dave that this seems a bit strange. Anybody who claims that they wouldn’t have expected any of this dead wood to be moved on 12 months after brands arrived is kidding themselves.

 

[davek]

Klaassen, Vlasic, Ty Browning. We can all do this.

Klaassen - here one season and his stock still high in Europe...and he takes a £10M hit on the fee paid for him.

Bravo.

 

[mill]

Ok so neither of us are accountants so we might not be using the correct terminology but my point clearly stands on that basis.

Mirallas has been here about 8 years, McCarthy 6, Besic 5. None of them will have been given huge signing on fees when resigning contracts, so small fees should AT LEAST cover their value in the accounts. That’s the point, this idea that we’ll be in all sorts of trouble if we sell them for a combined £6m is pure fallacy, we’ll be posting no loss on it and saving their wages. It’s an argument that keeps being used but it has no foundation.

Again, this might not be the right thread for it because I’m not blaming brands, but I was agreeing with Dave that this seems a bit strange. Anybody who claims that they wouldn’t have expected any of this dead wood to be moved on 12 months after brands arrived is kidding themselves.

Well I’m not an accountant but I have a little knowledge in the area. Just not re football clubs.

But I was agreeing with you. Any book value will be fairly residual so giving them away for free won’t necessarily have a massive impact. But it would be less ‘profitable’ than my scenario.

 

[MikeH72]

Klaassen - here one season and his stock still high in Europe...and he takes a £10M hit on the fee paid for him.

Bravo.

He is not responsible for fat arse Koeman paying double his market value, I’m sorry. He got what he realistically could for him.

You slated Koeman for spending so much on him, you can’t slate Brands because there isn’t another manager out there as thick as him.

 

[mill]

We've been over this. Cleverley, Naismith, Jelavic.

Martinez got shut of players on contracts who were bang average, so should he be able to.

And Moyes would certainly have.

Nope, we cant be molly coddling Brands on outgoings because they prove "challenging". What sort of man do we have here who can waltz in and simply be forgiven for doing half his job?

Tbf the likes of bolasie and McCarthy have had huge injury issues which would be a factor.

Plus Sandro and Niasse are nowhere near the level of the 3 you discussed.

And all of the above would be on massive wages in comparison.