Where do we stand on FFP as it stands?

[The Rock]

Rational fan (tbd whether rational but credit due) brings up a point; where do we stand from a financial standpoint? It's a two pronged question 1. FFP, 2. Khans PnL. We seem to have loan deals with a view to sign, and loaning players with a view to sign. This is obviously balancing the book but beckons the question "where do we stand". Most of us will probably never know from a PnL standpoint, but within the rules of FFP, a few on here should have a good idea.

Interested to hear thoughts.

[mrmicawbers]

Loaning out Seri and Augusta means we don't sell them cheap and take a big hit this year.They were both on long contract and so we pay their old clubs over a 5 year period.Saving their wages and getting a loan fee releases money to spend on players better suited to the championship. I'm guessing probably two decent midfielders to be announced soon,

[The Rational Fan]

By understanding is if there is an option to buy, then we have to wrote down the intangible asset price of the player down to this price by the end of the finanicial year. The writeoff would be "Buy Price €30m x 4/5 - Option Sell Price".

[FulhamStu]

We don't know how the contracts were constructed.  For Frank, it could be that we paid £10M upfront and then were due to pay £5M for every 20 games he played.  If this was the case, loaning him means we do t pay any more and if we got £15M back we would be in profit. 

I don't suppose for one minute, the above is anywhere near accurate however you hopefully get my point, we know so little, even the price we paid is quest work as we do not disclose the amount we pay.

[Statto]

By understanding is if there is an option to buy, then we have to wrote down the intangible asset price of the player down to this price by the end of the finanicial year. The writeoff would be "Buy Price €30m x 4/5 - Option Sell Price".

That doesn't mean we're worse off, unless the option price is less than the player's book value at the end of this season.

If Seri cost £20m (4yr contract) and Anguissa £25m (5yr contract) then their book values at the end of this season would have been £10m and £15m respectively. Reports, which I'm inclined to believe, suggest the option prices are around or even above those levels.

So no additional write-down necessary.

[toshes mate]

Perhaps current activity involving Seri and Anguissa are down to realisation that conforming to FFP will become a close run thing unless we get back into PL, but would have to say that FFP should have been a major consideration before purchasing either of them given that our DoF was aware of the odds against survival even prior to Wembley.  However, there is simply not enough information in the public domain to be sure without someone forensically examining FFC's accounts and even then it may not be obvious what is going on.

I hope both these guys do well on their loans and we recover at least the best part of our investment.     

[Deeping_white]

By understanding is if there is an option to buy, then we have to wrote down the intangible asset price of the player down to this price by the end of the finanicial year. The writeoff would be "Buy Price €30m x 4/5 - Option Sell Price".

That doesn't mean we're worse off, unless the option price is less than the player's book value at the end of this season.

If Seri cost £20m (4yr contract) and Anguissa £25m (5yr contract) then their book values at the end of this season would have been £10m and £15m respectively. Reports, which I'm inclined to believe, suggest the option prices are around or even above those levels.

So no additional write-down necessary.

This is how I see it too - plus the loan fee will most likely cover off the depreciation in contract value too, meaning that for this year at least they'll show no real depreciation, and we'll get their massive wages off the books for a year as well.

[The Rational Fan]

By understanding is if there is an option to buy, then we have to wrote down the intangible asset price of the player down to this price by the end of the finanicial year. The writeoff would be "Buy Price €30m x 4/5 - Option Sell Price".

That doesn't mean we're worse off, unless the option price is less than the player's book value at the end of this season.

If Seri cost £20m (4yr contract) and Anguissa £25m (5yr contract) then their book values at the end of this season would have been £10m and £15m respectively. Reports, which I'm inclined to believe, suggest the option prices are around or even above those levels.

So no additional write-down necessary.

This is how I see it too - plus the loan fee will most likely cover off the depreciation in contract value too, meaning that for this year at least they'll show no real depreciation, and we'll get their massive wages off the books for a year as well.

Ok, if Seri and Anguissa are loaned with the option to buy them at book value then it doesn't cause us a loss. It will interesting to see if Villarreal sign Anguiisaa for £25m.

[Statto]

By understanding is if there is an option to buy, then we have to wrote down the intangible asset price of the player down to this price by the end of the finanicial year. The writeoff would be "Buy Price €30m x 4/5 - Option Sell Price".

That doesn't mean we're worse off, unless the option price is less than the player's book value at the end of this season.

If Seri cost £20m (4yr contract) and Anguissa £25m (5yr contract) then their book values at the end of this season would have been £10m and £15m respectively. Reports, which I'm inclined to believe, suggest the option prices are around or even above those levels.

So no additional write-down necessary.

This is how I see it too - plus the loan fee will most likely cover off the depreciation in contract value too, meaning that for this year at least they'll show no real depreciation, and we'll get their massive wages off the books for a year as well.

Ok, if Seri and Anguissa are loaned with the option to buy them at book value then it doesn't cause us a loss. It will interesting to see if Villarreal sign Anguiisaa for £25m.

What would be the significance of that number, £25m?
Maybe I've misunderstood, but it sounds like you're suggesting that will be his book value.
We know he'll be 2 years into a 5 year contract at the end of this season, so for his book value to be £25m, the original fee we paid for him would need to have been about £42m.
As I said above, I suspect the amount we paid for him was more like £25m, meaning his book value at the end of this season will be £15m, which sounds to me like a realistic option price at which Villareal could buy him.
Again, apologies if I've misunderstood.

[The Rational Fan]

By understanding is if there is an option to buy, then we have to wrote down the intangible asset price of the player down to this price by the end of the finanicial year. The writeoff would be "Buy Price €30m x 4/5 - Option Sell Price".

That doesn't mean we're worse off, unless the option price is less than the player's book value at the end of this season.

If Seri cost £20m (4yr contract) and Anguissa £25m (5yr contract) then their book values at the end of this season would have been £10m and £15m respectively. Reports, which I'm inclined to believe, suggest the option prices are around or even above those levels.

So no additional write-down necessary.

This is how I see it too - plus the loan fee will most likely cover off the depreciation in contract value too, meaning that for this year at least they'll show no real depreciation, and we'll get their massive wages off the books for a year as well.

Ok, if Seri and Anguissa are loaned with the option to buy them at book value then it doesn't cause us a loss. It will interesting to see if Villarreal sign Anguiisaa for £25m.

What would be the significance of that number, £25m?
Maybe I've misunderstood, but it sounds like you're suggesting that will be his book value.
We know he'll be 2 years into a 5 year contract at the end of this season, so for his book value to be £25m, the original fee we paid for him would need to have been about £42m.
As I said above, I suspect the amount we paid for him was more like £25m, meaning his book value at the end of this season will be £15m, which sounds to me like a realistic option price at which Villareal could buy him.
Again, apologies if I've misunderstood.

True, his book value at the end of the year maybe closer to £15m. I really doubt our DOF will spend the £15m on a player as good as Anguissa.

[sunburywhite]

Why arent China included on FFP?

[grandad]

Why arent China included on FFP?

The whole situation with Chinese football needs investigating by FIFA. Where do their clubs get the vast amounts of money. It can´t be from Worldwide TV rights. How can a club justify paying Bale £1.1 mil a week tax free?

Having Googled the situation, the 12 Super League sides are all backed by huge corporations & Government funding.

[Nero]

Why arent China included on FFP?

The whole situation with Chinese football needs investigating by FIFA. Where do their clubs get the vast amounts of money. It can´t be from Worldwide TV rights. How can a club justify paying Bale £1.1 mil a week tax free?

Isnt FFP a UFEA and China isnt in Europe, and China have budgets but as they are trying to develop there league and like the MLS special player contracts or something like that