• Dear Guest, Please note that adult content is not permitted on this forum. We have had our Google ads disabled at times due to some posts that were found from some time ago. Please do not post adult content and if you see any already on the forum, please report the post so that we can deal with it. Adult content is allowed in the glory hole - you will have to request permission to access it. Thanks, scara

Would relegation be that bad?

Finney Is Back said:
Wrong!.... All of those players will have some money due to them for the remaining installments of their loyalty payments, so some of the £66m of wage savings will go on that, also most, if not all of them, will have a net book value so that we'll only be a portion of the £320m in transfer fees as 'profit'.

Let's take a really conservative guess and say we'd have to pay around £16m in loyalty bonuses (I think it would be more).

There's also the players currently out on loan that we'd likely need next season if selling a bunch of first team players - Devine, Donley, Vuskovic, Moore, Phillips, Takai, Lankshear - luckily they're likely all on low wages so perhaps £10m a year between them? = Wage savings now £66m - £16m of loyalty payments = £50m

Now let's look at net book values based on original transfer fee spread over length of contract and how long remains on the contract. Probably around £211m of net book value on the players I listed as likely to be sold above (net book values and profit on that NBV shown)

Vicario: £10m (£5m profit)
Romero: £20m (£30m profit)
Porro: £15m (£20m profit)
VDV: £17m (£33m profit)
Dragusin: £15m (£0 profit)
Gallagher: £32m (£3m profit)
Udogie: £8m (£17m profit)
Kudus: £46m (£9m loss)
Bentancur: £5m (£10m profit)
Solanke: £37m (£2m loss)
Veliz: £6m (£1m loss)

So that's only £119m of profit from those player sales.

So income is now £320m + £119m = £439m
Operational costs are now: £589m - £50m wage savings = £539m.

= £100m loss. £85m more than that allowed in the championship.

That means even selling the players above we're still well short of the money we need to bring in and the cost cutting needed to meet the Championship PSR rules.

This means that we're more likely to have to keep players like Solanke and Kudus and instead sell players who have been here longer such as Richarlison or players with little to no net book value like Bergval and Mikey Moore. Of course the problem there is that players like Solanke and Kudus will be high earners, so we probably have to sell all of them.

You see from the above how crippling relegation will be for us with our cost base. It will be almost impossible to meet the championship profit and sustainability rules and get promoted in our first year. If we don't get promoted in the first year then there is a very real prospect of our club having points deductions, sliding down the league and perhaps even going into administration.

We really do need to hope that we have relegation clauses in the contracts for our first team playing squad and also hope that our commercial deals do not have particularly punitive clauses for not being in the Premier League. Otherwise I think we are going to struggle to come up.

This is why I laugh when some on here have some sort of strange idea the we can take a relegation and just come straight back up and it not really affect us much. It will be extremely difficult to get back up with the sort of squad shedding we will have to do.

I think the only way we come back up is if the owners inject liquidity and we ignore the Championship PSR rules, make a £100m plus loss and pay the consequences of that later (I'm not sure they can apply a points deduction unless we get relegated again?)
Click to expand...
Better get Jim Ratcliffe in!
 
Finney Is Back said:
Wrong!.... All of those players will have some money due to them for the remaining installments of their loyalty payments, so some of the £66m of wage savings will go on that, also most, if not all of them, will have a net book value so that we'll only be a portion of the £320m in transfer fees as 'profit'.

Let's take a really conservative guess and say we'd have to pay around £16m in loyalty bonuses (I think it would be more).

There's also the players currently out on loan that we'd likely need next season if selling a bunch of first team players - Devine, Donley, Vuskovic, Moore, Phillips, Takai, Lankshear - luckily they're likely all on low wages so perhaps £10m a year between them? = Wage savings now £66m - £16m of loyalty payments = £50m

Now let's look at net book values based on original transfer fee spread over length of contract and how long remains on the contract. Probably around £211m of net book value on the players I listed as likely to be sold above (net book values and profit on that NBV shown)

Vicario: £10m (£5m profit)
Romero: £20m (£30m profit)
Porro: £15m (£20m profit)
VDV: £17m (£33m profit)
Dragusin: £15m (£0 profit)
Gallagher: £32m (£3m profit)
Udogie: £8m (£17m profit)
Kudus: £46m (£9m loss)
Bentancur: £5m (£10m profit)
Solanke: £37m (£2m loss)
Veliz: £6m (£1m loss)

So that's only £119m of profit from those player sales.

So income is now £320m + £119m = £439m
Operational costs are now: £589m - £50m wage savings = £539m.

= £100m loss. £85m more than that allowed in the championship.

That means even selling the players above we're still well short of the money we need to bring in and the cost cutting needed to meet the Championship PSR rules.

This means that we're more likely to have to keep players like Solanke and Kudus and instead sell players who have been here longer such as Richarlison or players with little to no net book value like Bergval and Mikey Moore. Of course the problem there is that players like Solanke and Kudus will be high earners, so we probably have to sell all of them.

You see from the above how crippling relegation will be for us with our cost base. It will be almost impossible to meet the championship profit and sustainability rules and get promoted in our first year. If we don't get promoted in the first year then there is a very real prospect of our club having points deductions, sliding down the league and perhaps even going into administration.

We really do need to hope that we have relegation clauses in the contracts for our first team playing squad and also hope that our commercial deals do not have particularly punitive clauses for not being in the Premier League. Otherwise I think we are going to struggle to come up.

This is why I laugh when some on here have some sort of strange idea the we can take a relegation and just come straight back up and it not really affect us much. It will be extremely difficult to get back up with the sort of squad shedding we will have to do.

I think the only way we come back up is if the owners inject liquidity and we ignore the Championship PSR rules, make a £100m plus loss and pay the consequences of that later (I'm not sure they can apply a points deduction unless we get relegated again?)
Click to expand...

Are things that bad that your debating yourself now???
 
Finney Is Back said:
Wrong!.... All of those players will have some money due to them for the remaining installments of their loyalty payments, so some of the £66m of wage savings will go on that, also most, if not all of them, will have a net book value so that we'll only be a portion of the £320m in transfer fees as 'profit'.

Let's take a really conservative guess and say we'd have to pay around £16m in loyalty bonuses (I think it would be more).

There's also the players currently out on loan that we'd likely need next season if selling a bunch of first team players - Devine, Donley, Vuskovic, Moore, Phillips, Takai, Lankshear - luckily they're likely all on low wages so perhaps £10m a year between them? = Wage savings now £66m - £16m of loyalty payments = £50m

Now let's look at net book values based on original transfer fee spread over length of contract and how long remains on the contract. Probably around £211m of net book value on the players I listed as likely to be sold above (net book values and profit on that NBV shown)

Vicario: £10m (£5m profit)
Romero: £20m (£30m profit)
Porro: £15m (£20m profit)
VDV: £17m (£33m profit)
Dragusin: £15m (£0 profit)
Gallagher: £32m (£3m profit)
Udogie: £8m (£17m profit)
Kudus: £46m (£9m loss)
Bentancur: £5m (£10m profit)
Solanke: £37m (£2m loss)
Veliz: £6m (£1m loss)

So that's only £119m of profit from those player sales.

So income is now £320m + £119m = £439m
Operational costs are now: £589m - £50m wage savings = £539m.

= £100m loss. £85m more than that allowed in the championship.

That means even selling the players above we're still well short of the money we need to bring in and the cost cutting needed to meet the Championship PSR rules.

This means that we're more likely to have to keep players like Solanke and Kudus and instead sell players who have been here longer such as Richarlison or players with little to no net book value like Bergval and Mikey Moore. Of course the problem there is that players like Solanke and Kudus will be high earners, so we probably have to sell all of them.

You see from the above how crippling relegation will be for us with our cost base. It will be almost impossible to meet the championship profit and sustainability rules and get promoted in our first year. If we don't get promoted in the first year then there is a very real prospect of our club having points deductions, sliding down the league and perhaps even going into administration.

We really do need to hope that we have relegation clauses in the contracts for our first team playing squad and also hope that our commercial deals do not have particularly punitive clauses for not being in the Premier League. Otherwise I think we are going to struggle to come up.

This is why I laugh when some on here have some sort of strange idea the we can take a relegation and just come straight back up and it not really affect us much. It will be extremely difficult to get back up with the sort of squad shedding we will have to do.

I think the only way we come back up is if the owners inject liquidity and we ignore the Championship PSR rules, make a £100m plus loss and pay the consequences of that later (I'm not sure they can apply a points deduction unless we get relegated again?)
Click to expand...
I think you're allowed £41m of losses in total on a rolling 3 year period...I'm sure you can front load that all into year one.

We can sell the ladies team? to ourselves :)

We could fudge the rules for PSR but would have to swallow a points deduction even if promoted since the loopholes were close after the Leicester case.

I'm not sure what happens is you have racked up losses over just one season in the championship and get promoted straight away. As you haven't completed a 3 season cycle under the EFL rules?
 
Finney Is Back said:
I think you misunderstand how big a problem we have in terms of losses. We don't have the luxury of being able to just get wages off the books, we desperately also need a large influx of income via profit on transfer fees.
Click to expand...

Respectfully, I think you should probably spend more time educating other fans rather than telling them they're wrong, misunderstood etc. It's not a great leadership look and you come across as quite senior in the way you look at things.

I have no cycles in my life to do deep dives on THFC finances, or even want to. Happy to pick up some factoids from others though. I'm sure only Matthew Collecott and team really knows whether your numbers above are accurate, or can see what's missing in your financial equation.

The key theme here is that we're all crapping ourselves as Spurs fans as to what might happen to our club if we go down. I genuinely hope we never have to have the conversation whether we did or did not loan players out after relegation or which side of June 30 we dropped our pants to get players off the books. I have a feeling we will be though.
 
hash browns and onions said:
Why don't we do a ground share with Orient and host more events in the stadium?

Or was that the plan all along?
Click to expand...

The excellent Theo Delaney on The Spurs Show has been pushing that theory for a couple of years.

Income from concerts, boxing, Skywalks, go-karts, even an NFL franchise, is all much more predictable than football. In football, you might invest £60 million for an Ndombele and get very little for your outlay - footballing revenue is too unpredictable.

Better to have an entertainment venue, in which a football team may play an ever-decreasing part in the revenue steam.
 
Muttley said:
Respectfully, I think you should probably spend more time educating other fans rather than telling them they're wrong, misunderstood etc. It's not a great leadership look and you come across as quite senior in the way you look at things.

I have no cycles in my life to do deep dives on THFC finances, or even want to. Happy to pick up some factoids from others though. I'm sure only Matthew Collecott and team really knows whether your numbers above are accurate, or can see what's missing in your financial equation.

The key theme here is that we're all crapping ourselves as Spurs fans as to what might happen to our club if we go down. I genuinely hope we never have to have the conversation whether we did or did not loan players out after relegation or which side of June 30 we dropped our pants to get players off the books. I have a feeling we will be though.
Click to expand...
This forum would be pretty boring if it was just people agreeing with other. If I disagree with something somebody has posted then I’ll say it. I fully expect the same in reverse. I don’t think there is such a thing as a glory-glory leadership position and, if there was, I don’t think it would pay too well ;)

See the long two posts I put up in this thread where I have tried to take some numbers from the most recent published accounts, along with some assumptions (that I have stated are such) to show my supposition of our finances if we’re relegated.

I get that most people in life tend want to concentrate on the positive side of things but, when it comes to finances, I’ve always found it best to errr on the side of caution, I genuinely don’t think a lot of Spurs fans realise how dangerous relegation would be for us.
 
ricky2tricky4city said:
I think you're allowed £41m of losses in total on a rolling 3 year period...I'm sure you can front load that all into year one.

We can sell the ladies team? to ourselves :)

We could fudge the rules for PSR but would have to swallow a points deduction even if promoted since the loopholes were close after the Leicester case.

I'm not sure what happens is you have racked up losses over just one season in the championship and get promoted straight away. As you haven't completed a 3 season cycle under the EFL rules?
Click to expand...
That’s the answer then…. Rack up big losses and then lawyer up! ;)
 
Finney Is Back said:
Absolutely. Those that think we don't have huge issues in the event of relegation are burying their heads in the sand.

Many of our costs are pretty much fixed (and very high). The only real lever that we can pull to reduce costs is to reduce our wage bill, and even pulling that lever isn't always simple, with it being dependent on us selling players or releasing players and the players have to agree with that and we have to find buyers for them. We would already be likely to be running with losses in the Championship next year. Selling players doesn't necessarily cancel out all of those losses as only amounts over the players remaining net book value count as profits. The championship only allows for a club to lose a max of £15m in a single year. We are in seriously big trouble against that metric.
Click to expand...

So, if push comes to shove, all hell breaks lose when we’re down. Costs are too high, we can’t sell players, can’t take up any loans and so on - what will happen? Surely, either a cash injection from Lewis/Enic or we sell? Right? What’s the worst that could happen? We go bankrupt and sell the stadium? That’s not gonna happen. Maybe we’ll have to rely more on our youth academy and being really smart with who we sign. That’d be refreshing! I’m part joking - just trying to picture the absolute worst case scenario here, and not sure just quite how bad it could get.
 
Levy’s last gift is going to be protecting us from this, we’ll be fine, he’ll have always factored the possibility in.

For me, the worst thing will be the stigma of it, even if we come right back up, we’ll still be that team that got relegated, still have that around our neck forever, that’s why City still don’t get any respect, once a championship club, always a championship club.

The stink never washes off, it will be an embarrassment for eternity.
 
Baleforce said:
It's more accurate to say we suffered rather than we managed, watch any MotD from the 90's/2000's, dollars to donuts most of the analysis is on officiating mistakes.

As more money came into the game and raised the stakes, the officiating wasn't keeping up, it was killing the game.
Click to expand...
Come off it mate. VAR and the endless 5 minute stoppages to look over goal, fouls, penalties, handballs etc. You cant celebrate a goal now as theres a fair chances someones rooster was 1mm offside a minute before the actual goal. Its fkn awful.
 
Finney Is Back said:
This forum would be pretty boring if it was just people agreeing with other. If I disagree with something somebody has posted then I’ll say it. I fully expect the same in reverse. I don’t think there is such a thing as a glory-glory leadership position and, if there was, I don’t think it would pay too well ;)

See the long two posts I put up in this thread where I have tried to take some numbers from the most recent published accounts, along with some assumptions (that I have stated are such) to show my supposition of our finances if we’re relegated.

I get that most people in life tend want to concentrate on the positive side of things but, when it comes to finances, I’ve always found it best to errr on the side of caution, I genuinely don’t think a lot of Spurs fans realise how dangerous relegation would be for us.
Click to expand...

Nah, dont agree. It's all in how the messaging is delivered on forums. Admittedly, my post wasn't so great because I was more wondering whether we could or should consider loans as a viable option. It perhaps read was that I was advocating for it. I actually wasn't, at least in my head. I was just wondering why it's not been a big discussion point.

What you've kindly done is put some numbers to paper in one single scenario based on some facts and some guestimates. Based on many moving parts, there could be several different scenarios. We don't know to what level of accuracy any of these models will come out. As an example, you don't know things like whether the Lewis's / Tavistock will throw in another cash injection like they've done previously. That might be way more efficient in the mid to long term than removing balance sheet assets for less than their market value. It might be a strategy to help get THFC back to it's full saleable value if that is the agenda.

There is way more grey space in this equation than right or wrong to be fair.
 
You must log in or register to reply here.
Back