ENIC

[Lilbaz]

Can someone explain (in as much detail as they feel necessary) why this ENIC cash injection is happening now rather than, say, Summer 2019 after we lost that CL final?

1/ they have the money.
2/ due to covid there are bargains out there. Values of players have dropped.
3/ they trust paratici and conte to spend it wisely.
4/ the change in the cl format in 2024 means that if we get our coefficients high enough, 5th place will be good enough to get cl football.
5/ they think we have a good chance to win something. Which (as they are increasing their stake in the club with the investment) would increase the value of the club. So makes financial sense.

 

[SpurMeUp]

I think the premise is: we have a world-class forward line. Even if you could afford a Kane and Son, most clubs of our stature may not be able to attract them. Both are at the peak of their career. No doubt they attracted Conte first and foremost. We have to develop the rest of the side, and realise the promise the new stadium has provided. So now is absolutely the time to twist. Spending money on transfers is never a guarantee of success, but we have the core things in place: Conte, precision and goals in attack, and a modern amphitheater backdrop. It would be bad business to rest on our laurels. Levy is not a bad businessman.

 

[Lilbaz]

1/ they have the money.
2/ due to covid there are bargains out there. Values of players have dropped.
3/ they trust paratici and conte to spend it wisely.
4/ the change in the cl format in 2024 means that if we get our coefficients high enough, 5th place will be good enough to get cl football.
5/ they think we have a good chance to win something. Which (as they are increasing their stake in the club with the investment) would increase the value of the club. So makes financial sense.

Edit - scrap 4. Forgot they changed it. It's now how well teams from that country do in europe the previous year. The top two performing countries will get an extra cl space. Very unlikely but england could get 7 teams in there with winners of the europa and cl finish outside the top 5.

 

[metalgear]

The cash injection is so welcome because we've always operated on strictly balancing the books.
However we've done well without it and Man U and Chelsea are going to have bigger transfer budgets than us so I think we are going to get diminishing returns.
Glad we've done Perisic and Forster and before that Kulu, Benta and Romero gives me hope that we will outdo the competition in transfers.
Don't think we can catch up with Emirates Marketing Project and Pool and even Chelsea seems a stretch now. Just keeping clear of Arsenal and Man U for fourth would seem to be a good target to me, despite the extra cash.

 

[Lilbaz]

The cash injection is so welcome because we've always operated on strictly balancing the books.
However we've done well without it and Man U and Chelsea are going to have bigger transfer budgets than us so I think we are going to get diminishing returns.
Glad we've done Perisic and Forster and before that Kulu, Benta and Romero gives me hope that we will outdo the competition in transfers.
Don't think we can catch up with Emirates Marketing Project and Pool and even Chelsea seems a stretch now. Just keeping clear of Arsenal and Man U for fourth would seem to be a good target to me, despite the extra cash.

Remember utd and chelsea are limited by the new spending rules. We can spend more than them.

 

[glorygloryeze]

1/ they have the money.
2/ due to covid there are bargains out there. Values of players have dropped.
3/ they trust paratici and conte to spend it wisely.
4/ the change in the cl format in 2024 means that if we get our coefficients high enough, 5th place will be good enough to get cl football.
5/ they think we have a good chance to win something. Which (as they are increasing their stake in the club with the investment) would increase the value of the club. So makes financial sense.

Thanks for the reply.

I think 2 to 4 make sense. However, 1 and 5 should have been enough reason to do so previously...but hey ho, onwards and upwards

 

[glorygloryeze]

Remember utd and chelsea are limited by the new spending rules. We can spend more than them.

Can you go into more detail about what you mean by this?

 

[johnola]

How does it make a mockery of projected cash flows?

Prices of materials and services increase.

 

[johnola]

Our capital expenditure on the training ground and stadium has been £1.4bn since 2010.

View attachment 14178

Our gross debt is £854m.


View attachment 14179

We've already paid for £600m. Almost half of it. In 10 years, without the extra revenue of the stadium. Without the new nbc tv deal. Without the cinch and getir deals. We have another 30 years to pay the rest. We are fine.

That Swiss ramble summary indicated we have £1.5billion of debt.

 

[Lilbaz]

Can you go into more detail about what you mean by this?

Uefas new spending rules. Teams will be limited to spend 90% of their turnover on wages, agents fees and amortisation. It actually will be enforced next summer, then drops to 80% the following season, the 70% the season after. As wages and amortisation are along the length of the players contract. Whatever they spend this summer they will also spend next. We are well under the 90% threshold. Chelsea and utd might be pushing it (we'll have to wait for the next set of accounts to be sure). We have more room to play with bringing in transfers and increasing our wages.

 

[Lilbaz]

That Swiss ramble summary indicated we have £1.5billion of debt.

We have transfer debt which comes out of our transfer budget as we pay clubs in installments. We also have other liabilities such as season tickets. They have already been paid for but the matches haven't been played yet so are considered debt until they are.

These don't have anything to do with the stadium or training ground. As said the gross debt of that is £854m and as they cost £1.411bn we have already paid a massive chunk.

 

[Raziel]

I'd build a little on what @Lilbaz and @SpurMeUp said

1. Timing is good on a few of the pitch pieces, we have a front line that can win any competition, a manager that can win any competition and we are back in CL
2. Chelsea's sale has changed the market, i.e. two odd years ago, it was believed ENIC valued the club at £2.5B but there was no precedent (like owning a house in any area no one had bought in decades), Chelsea still has to build (and gain permission) a new stadium, yet they sold for >£3B (plus £2B in other commitments)
3. Our income is supporting it, to @glorygloryeze question of why didn't they do this earlier, the short answer is -> there is no longer any unknown. All Infrastructure spend is done and all debt restructured into low interest long term, Stadium has run at full capacity for a season for the first time plus non football events (NFL, Rugby, Boxing, Concerts), new sponsorships as well. Add in as mentioned new co-efficient model in CL rewards us in long term as well.
4. Simply a good investment

The last more speculative statement (will annoy some people) is Levy succeed at convincing them on 3rd attempt. It's been reported that once with Jose and once last summer (potentially when first trying to attract Conte) Levy went to Bahamas to try to get exactly this outcome, 3rd time lucky?

 

[Lilbaz]

I'd build a little on what @Lilbaz and @SpurMeUp said

1. Timing is good on a few of the pitch pieces, we have a front line that can win any competition, a manager that can win any competition and we are back in CL
2. Chelsea's sale has changed the market, i.e. two odd years ago, it was believed ENIC valued the club at £2.5B but there was no precedent (like owning a house in any area no one had bought in decades), Chelsea still has to build (and gain permission) a new stadium, yet they sold for >£3B (plus £2B in other commitments)
3. Our income is supporting it, to @glorygloryeze question of why didn't they do this earlier, the short answer is -> there is no longer any unknown. All Infrastructure spend is done and all debt restructured into low interest long term, Stadium has run at full capacity for a season for the first time plus non football events (NFL, Rugby, Boxing, Concerts), new sponsorships as well. Add in as mentioned new co-efficient model in CL rewards us in long term as well.
4. Simply a good investment

The last more speculative statement (will annoy some people) is Levy succeed at convincing them on 3rd attempt. It's been reported that once with Jose and once last summer (potentially when first trying to attract Conte) Levy went to Bahamas to try to get exactly this outcome, 3rd time lucky?

Enic did do it before. They did it the first season harry took over and we went big in the january transfer window. Then as now we needed a turnover of players. Why didn't we after the cl final defeat? We did spend £133m that summer. Maybe they thought that was enough.

 

[glorygloryeze]

Uefas new spending rules. Teams will be limited to spend 90% of their turnover on wages, agents fees and amortisation. It actually will be enforced next summer, then drops to 80% the following season, the 70% the season after. As wages and amortisation are along the length of the players contract. Whatever they spend this summer they will also spend next. We are well under the 90% threshold. Chelsea and utd might be pushing it (we'll have to wait for the next set of accounts to be sure). We have more room to play with bringing in transfers and increasing our wages.

I can now doubt see that Chelsea have been pushing it for years given that they operated on Abramovich's credit card, but i am surprised that United are? Given their commercial deals, global income etc how can this be so?

 

[johnola]

Thanks all for your input on this it does bother me and perhaps it should not.

I’d be comfortable if our revenues soon reach their maximum potential and are on a scale that makes that huge investment worthwhile.

All I see is competitors with better income and yet without those liabilities.

 

[johnola]

@Raziel

thanks for that post good summary. We do have further commitments though do we not, with the remaining phases of the Northumberland Park residential developments, hotel etc?

 

[Lilbaz]

I can now doubt see that Chelsea have been pushing it for years given that they operated on Abramovich's credit card, but i am surprised that United are? Given their commercial deals, global income etc how can this be so?

Wages and amortisation are huge. They will be letting players go and obviously fans in the ground will be a boost to overall turnover. So next set of accounts will look better. But they still have to be wary what they spend.

 

[glorygloryeze]

Wages and amortisation are huge. They will be letting players go and obviously fans in the ground will be a boost to overall turnover. So next set of accounts will look better. But they still have to be wary what they spend.

Ok, but are Man Utd's huge compared to Liverpool and Emirates Marketing Project's?

 

[Lilbaz]

Ok, but are Man Utd's huge compared to Liverpool and Emirates Marketing Project's?

Worked it out in this thread https://www.glory-glory.co.uk/community/threads/uefa-unveil-new-ffp-rules.11361/

Based on last accounts.

Bored so thought i'd see from the last accounts who'd have to do the most to be in line with the new rules. Obviously covid had an impact and players have been bought and sold since. But anyway these are the percentages of revenue clubs spent on amortisation + wages. Only did italian and english teams.

Napoli 144%
Roma 130%
Juve 111%
Arse 108%
Lazio 101%
Milan 98%
Chelsea 97%
Inter 93%
Man Utd 91%
Liverpool 90%
Emirates Marketing Project 87%
Spurs 77%
Atalanta 74%

 

[glorygloryeze]

@Raziel

thanks for that post good summary. We do have further commitments though do we not, with the remaining phases of the Northumberland Park residential developments, hotel etc?

Could it just be that the 'be brave' email from Poch has been held up in a queue and only just arrived?