Antonio Conte - officially NOT the coach of THFC

[Lilbaz]

Davies and Sessegnon are two of around 10 very average players in our squad that need to leave the club imo.

With regards the costs to build the squad I posted that will vary from what you estimate because it doesn’t have to be those players exactly but ones of that quality. I’m sure FP can get one on a free or unearth a gem or two who cost much less than some of the players in that list above.

Also do not forget that before covid we achieved world record profit levels before player trading. It will be interesting to see next months financials but also we have up to £350m to draw down from the enic investment so expect a big outlay on up to 9 new quality players over the next few windows.

We have £50m left to draw on the enic investment.

 

[AjaxDeSuperYids]

We have £50m left to draw on the enic investment.

Do you want to break down the amount drawn down so far and how it is has already been allocated.

I think the headline figure was £150m was created from the share issue but further reading of associated documents showed it was actually at least double this figure available potentially.

 

[Finney Is Back]

Davies and Sessegnon are two of around 10 very average players in our squad that need to leave the club imo.

With regards the costs to build the squad I posted that will vary from what you estimate because it doesn’t have to be those players exactly but ones of that quality. I’m sure FP can get one on a free or unearth a gem or two who cost much less than some of the players in that list above.

Also do not forget that before covid we achieved world record profit levels before player trading. It will be interesting to see next months financials but also we have up to £350m to draw down from the enic investment so expect a big outlay on up to 9 new quality players over the next few windows.

Good luck finding better association trained players than those two for anything like the fees we will have left after spending £300m+ on the overseas signings you want.

Free transfers cost huge wages.... Huge wages take up more of our turnover and reduce the amount left for further transfers in future seasons.

We achieved World record profit levels because we got to the final of CL while not making a single signing for the first team squad in the whole year and selling Dembele, thus having a net transfer income. We are unlikely to reach the final of the CL again in the next few years and (I hope) we don't go another year without making a first team transfer in. Our cost base has also gone up considerably since then with us now owing money for transfers in and the club having increased its wage bill significantly since then.

We don't have anything like £350m to draw down from the ENIC investment. They injected £150m to help pay for the already high amount of money we owed for our transfers in previous years and a high net spend last summer. Remember also that we are yet to pay for Kulusevski.

 

[Finney Is Back]

Do you want to break down the amount drawn down so far and how it is has already been allocated.

I think the headline figure was £150m was created from the share issue but further reading of associated documents showed it was actually at least double this figure available potentially.

Can you point me to those documents please?

 

[AjaxDeSuperYids]

Can you point me to those documents please?

I don’t know where they are but I’m sure it was discussed on here after an eagle eyed poster spotted it.

Will be in the enic thread from a few months ago I’d imagine.

 

[Lilbaz]

Do you want to break down the amount drawn down so far and how it is has already been allocated.

I think the headline figure was £150m was created from the share issue but further reading of associated documents showed it was actually at least double this figure available potentially.

Chartered house said £100m had been drawn. Nothing since.

Yes there is an option to increase the figure of £150m to £300m in the next couple of years but that hasn't been done yet. So at the moment we have £50m left to draw. The £50m has to be drawn by the end of the year for enic to increase their stake.

 

[Lilbaz]

Can you point me to those documents please?

Chartered house had them. I posted them somewhere a while back. On my phone at the moment so can't check.

 

[Finney Is Back]

Chartered house said £100m had been drawn. Nothing since.

Yes there is an option to increase the figure of £150m to £300m in the next couple of years but that hasn't been done yet. So at the moment we have £50m left to draw. The £50m has to be drawn by the end of the year for enic to increase their stake.

Next set of accounts will be quite revealing I think. Should allow us to hypothesise what sort of spending we can sustain (assuming wages at x% of turnover).

 

[Lilbaz]

Next set of accounts will be quite revealing I think. Should allow us to hypothesise what sort of spending we can sustain (assuming wages at x% of turnover).

From jan the new spending rules come in from uefa (they do them jan to dec, then can do any penalties for the following season). Which would limit us (eventually) to wages/amortisation and agents fees to be 70% of turnover. New accounts should give us an ability to guess at least what sort of figure that would be minus cl money (which you can't count on anyway).

 

[Finney Is Back]

From jan the new spending rules come in from uefa (they do them jan to dec, then can do any penalties for the following season). Which would limit us (eventually) to wages/amortisation and agents fees to be 70% of turnover. New accounts should give us an ability to guess at least what sort of figure that would be minus cl money (which you can't count on anyway).

70% of turnover with a 50% wage bill doesn't really leave much does it?.... If we assume turnover of £400m then we're restricted to £80m of net transfer spending or reducing wages.

 

[Gazza Dazzla]

70% of turnover with a 50% wage bill doesn't really leave much does it?.... If we assume turnover of £400m then we're restricted to £80m of net transfer spending or reducing wages.

Relative to other clubs we must look pretty healthy though?

 

[Lilbaz]

70% of turnover with a 50% wage bill doesn't really leave much does it?.... If we assume turnover of £400m then we're restricted to £80m of net transfer spending or reducing wages.

50% wages is for everyone (including levy etc...) I believe only first team squad counts, but not too sure.
We should be closer to £450m. Last accounts was £360m with only £2m matchday. Matchday and other events should get £125m+, add in getir and cinch deals.
That's not including cl or possible naming rights.

We have a bit of room. If we can get lo celso and ndomble off the books that's a big chunk of amortisation that can be used.

 

[Finney Is Back]

50% wages is for everyone (including levy etc...) I believe only first team squad counts, but not too sure).
We should be closer to £450m. Last accounts was £360m with only £2m matchday. Matchday and other events should get £125m+, add in getir and cinch deals.
That's not including cl or possible naming rights.

We have a bit of room. If we can get lo celso and ndomble off the books that's a big chunk of amortisation that can be used.

Wasn't a big portion of the PL TV money pulled forward into that revenue though?

 

[Lilbaz]

Wasn't a big portion of the PL TV money pulled forward into that revenue though?

True. Something like £20-30m. Forgot about that.
I can't see us going as far as ajax thinks. But we should have a fairly decent kitty the next couple of years.

 

[Finney Is Back]

50% wages is for everyone (including levy etc...) I believe only first team squad counts, but not too sure.
We should be closer to £450m. Last accounts was £360m with only £2m matchday. Matchday and other events should get £125m+, add in getir and cinch deals.
That's not including cl or possible naming rights.

We have a bit of room. If we can get lo celso and ndomble off the books that's a big chunk of amortisation that can be used.

Yeah, good point.... I remember trying to do some analysis on this post our last set of accounts and found an old post of mine about this.... (this was posted just under a year ago, so while playing in the Europa Conference League and prior to our Jan and Summer signings)

Some interesting bits and pieces from the accounts:

Last season we were about £120m down on match day revenue and probably £10-20m down commercial income. These will come back in the 2022 figures. There are also two new sponsorships (Cinch and Getir) that will show in the next set of numbers. My guess is perhaps as much as £15m combined. TV and media revenue is likely to reduce in 2022 due to numbers from 2020 being pulled into 2021 and also Europa Conference being worth less than Europa (I would estimate £145m of revenue in 2022 versus 205m in 2021 as a result of these two factors.

I think we can therefore expect our revenue number in 2022 to be around £90m higher than our 2021 number, taking us to about £450m of revenue. Not quite as high as our record revenue year of 2019 but notable in the fact that it will be achieved without any major contribution from European football.​

Against that though is the fact that our operating expenses were lower by around £44m in 2021 (I assume due to stadium being mostly closed) so that will jump back up. This will be partly offset by us likely having cut our wage bill this year (expensive players going and ones replacing them likely to be on lower salaries). Let's take a punt at a £10m reduction in wage bill this year. So we'll be about £90m of revenue up but also about £30m up on costs. Rather concerning though is that our cash position reduced by £78m in 2021, only expected really considering pretty much zero match day revenue and still a fair amount of money spent on player purchases.​

It looks to me as though in normal times (assuming paying only interest and not capital on our loans, the owners not loading even more debt on the club, the club keeping a reasonably level cash flow position to what existed at end of 2021 period, having a wage to turnover ratio at around 50% and assuming the club achieves Europa League participation) our club can probably afford to invest around £70m net per season on player purchases. A stadium naming rights deal might be able to take that amount to £80m to £90m, maximising non football events at the stadium might be able to take that up another £10 - £20m. £100m net investment into the playing squad at THFC is entirely feasible without us even having CL football just as long as we can get the commercial deals done (might take a bit of swallowing his pride from Levy on the stadium naming rights).​

In seasons where we reach the Champions League it might be prudent for the club to continue to spend a similar net amount on transfers and use surplus funds to improve our cash position so that we have reserves in case of unexpected items, i.e. the most serious case of relegation, or a collapse in the TV deal, or a pandemic. Or should a less impacting event occur such as not qualifying for the Europa League we could dip into cash reserves to maintain our level of spending). Increasing our cash balance would also give us the opportunity to pay down debt if and when the cost of debt increases.​

In theory £450m+ of revenue in year 2022 should mean that we can operate a £225m wage bill. Given that we have probably reduced wages from the £205m number just posted for 2021 (I'm guessing we're running at £195m for 2022) that could give us some nice headroom to bring in Bosman transfers (i.e. we could get as many as 3 new £200k a week players without needing to sell/release anyone). Of course that assumes that Levy does have some ambition for us to become more competitive with our wage to turnover ratio.​

We look reasonably well placed financially to be able to operate a decent, sustained investment into the first team squad. It won't allow us to compete on a level footing with Chelsea, Emirates Marketing Project, Man Utd or even Liverpool but will allow us to compete on an equal (or more likely slightly better) footing than Arsenal and on a significantly better footing than any of the rest of the PL unless their owners sustain big capital injections.​

It is clear though that we do need to get far better at selling players. We know that we can't compete with the 4 richest clubs in England so we should look to operate more like (e.g) Dortmund or Lyon, concentrating on young players, supplemented with the odd experienced head and looking to fund the next batch of promising young players by selling a superstar every couple of years. Doing that just might allow us to hit the sweet spot in the odd season where some of the young players have come on and the superstar hasn't yet been sold and we can pick ourselves up a proper major trophy. Hopefully the club getting Paratici and apparently overhauling our scouting and recruitment network indicates that we are looking towards that model. I can see us agreeing deals for two or three Bosmans in the next two windows (we have the room on the wage budget), selling Kane and bringing in Vlahovic and then using any spare funds to bring in players who are under 23 (including a few who count as association trained).​

 

[Lilbaz]

Relative to other clubs we must look pretty healthy though?

Arsenal seem at the limit. Swiss ramble did a break down of clubs being effected by the new rules (if you can find it, there is a thread on here). We are the least effected.
Arsenal need cl i think otherwise they need to cut back.
First year of the rules it is 90% of turnover. 80% the next then 70%.

 

[Finney Is Back]

Arsenal seem at the limit. Swiss ramble did a break down of clubs being effected by the new rules (if you can find it, there is a thread on here). We are the least effected.
Arsenal need cl i think otherwise they need to cut back.
First year of the rules it is 90% of turnover. 80% the next then 70%.

So in many ways the best time to (over) spend was a year or two ago and the next best time to spend was the summer just gone. I wonder if some clubs got a little heads up on the likely new rules coming in?

 

[Lilbaz]

Yeah, good point.... I remember trying to do some analysis on this post our last set of accounts and found an old post of mine about this.... (this was posted just under a year ago, so while playing in the Europa Conference League and prior to our Jan and Summer signings)

Some interesting bits and pieces from the accounts:

Last season we were about £120m down on match day revenue and probably £10-20m down commercial income. These will come back in the 2022 figures. There are also two new sponsorships (Cinch and Getir) that will show in the next set of numbers. My guess is perhaps as much as £15m combined. TV and media revenue is likely to reduce in 2022 due to numbers from 2020 being pulled into 2021 and also Europa Conference being worth less than Europa (I would estimate £145m of revenue in 2022 versus 205m in 2021 as a result of these two factors.

I think we can therefore expect our revenue number in 2022 to be around £90m higher than our 2021 number, taking us to about £450m of revenue. Not quite as high as our record revenue year of 2019 but notable in the fact that it will be achieved without any major contribution from European football.​

Against that though is the fact that our operating expenses were lower by around £44m in 2021 (I assume due to stadium being mostly closed) so that will jump back up. This will be partly offset by us likely having cut our wage bill this year (expensive players going and ones replacing them likely to be on lower salaries). Let's take a punt at a £10m reduction in wage bill this year. So we'll be about £90m of revenue up but also about £30m up on costs. Rather concerning though is that our cash position reduced by £78m in 2021, only expected really considering pretty much zero match day revenue and still a fair amount of money spent on player purchases.​

It looks to me as though in normal times (assuming paying only interest and not capital on our loans, the owners not loading even more debt on the club, the club keeping a reasonably level cash flow position to what existed at end of 2021 period, having a wage to turnover ratio at around 50% and assuming the club achieves Europa League participation) our club can probably afford to invest around £70m net per season on player purchases. A stadium naming rights deal might be able to take that amount to £80m to £90m, maximising non football events at the stadium might be able to take that up another £10 - £20m. £100m net investment into the playing squad at THFC is entirely feasible without us even having CL football just as long as we can get the commercial deals done (might take a bit of swallowing his pride from Levy on the stadium naming rights).​

In seasons where we reach the Champions League it might be prudent for the club to continue to spend a similar net amount on transfers and use surplus funds to improve our cash position so that we have reserves in case of unexpected items, i.e. the most serious case of relegation, or a collapse in the TV deal, or a pandemic. Or should a less impacting event occur such as not qualifying for the Europa League we could dip into cash reserves to maintain our level of spending). Increasing our cash balance would also give us the opportunity to pay down debt if and when the cost of debt increases.​

In theory £450m+ of revenue in year 2022 should mean that we can operate a £225m wage bill. Given that we have probably reduced wages from the £205m number just posted for 2021 (I'm guessing we're running at £195m for 2022) that could give us some nice headroom to bring in Bosman transfers (i.e. we could get as many as 3 new £200k a week players without needing to sell/release anyone). Of course that assumes that Levy does have some ambition for us to become more competitive with our wage to turnover ratio.​

We look reasonably well placed financially to be able to operate a decent, sustained investment into the first team squad. It won't allow us to compete on a level footing with Chelsea, Emirates Marketing Project, Man Utd or even Liverpool but will allow us to compete on an equal (or more likely slightly better) footing than Arsenal and on a significantly better footing than any of the rest of the PL unless their owners sustain big capital injections.​

It is clear though that we do need to get far better at selling players. We know that we can't compete with the 4 richest clubs in England so we should look to operate more like (e.g) Dortmund or Lyon, concentrating on young players, supplemented with the odd experienced head and looking to fund the next batch of promising young players by selling a superstar every couple of years. Doing that just might allow us to hit the sweet spot in the odd season where some of the young players have come on and the superstar hasn't yet been sold and we can pick ourselves up a proper major trophy. Hopefully the club getting Paratici and apparently overhauling our scouting and recruitment network indicates that we are looking towards that model. I can see us agreeing deals for two or three Bosmans in the next two windows (we have the room on the wage budget), selling Kane and bringing in Vlahovic and then using any spare funds to bring in players who are under 23 (including a few who count as association trained).​

Agree with everything said.

 

[Lilbaz]

So in many ways the best time to (over) spend was a year or two ago and the next best time to spend was the summer just gone. I wonder if some clubs got a little heads up on the likely new rules coming in?

Not really. Amortisation is the transfer fee divided over the length of the contract. So it will count players bought years prior (every player in the squad you ever paid a transfer fee for). So getting ndombele and lo celso off the books frees up a lot of space.
Arsenal seem to be banking on cl. Teams not in europe are not effected (Saudi Sportswashing Machine).

 

[Finney Is Back]

What are clubs expected to do with the remaining 30% of their income? If we take a theoretical view that THFC, with a stadium sponsor in place and a number of other events at the stadium finish in the top 4 and get into the quarter finals of the CL then we could see £500m of revenue. If we spent 50% on wages and our remaining max of £100m on net transfer instalments then we'd have a surplus of £150m. Of course a bunch of that would be needed to service the debt and pay stadium operating costs etc... But what are UEFA proposing is done with the potential large portions of revenue that will still remain? It will be great for some clubs, who could do with putting that money towards improving their infrastructure, but for a club like THFC with brand new, state of the art training grounds and stadiums what is to be done with the rest of the money? Generate massive reserves of cash?!?