Debt to Equity and The 'New' Man City

[Ted Hughes]

Ted Hughes - if the rags can eliminate debt interest payments then they will be able to afford to buy Ronaldo back twice after 3 years!

Beefy et al, sorry but disagree, it doesn't say anything about reversing the policy on clubs not spending more than INCOME. Simply introducing new equity will not it in itself circumvent those rules. Don't forget, it was never about debt it was about inflated spending...

Cheers pal, just piss on my chips why don't ya!

Soz :( The real bright side is the longer time frame for introduction, means we have a couple more years at least before spending on players needs reducing!

If we're going to seriously compete with the top clubs over a long period of time, the Sheikh will have to find a way of getting money into the club for a fair old period of time or otherwise we can forget it. If you go all the way back to 2003 the rags had a turnover of £173m but only made a pre tax profit of £39.6m even then. That's double our current turnover with a much lower wage bill than ours but would only buy half a top player these days.

Now the top clubs are turning over 3-4 times as much as us & the London teams make much more on matchdays wheras the rags etc have money coming in from everywhere. We'd need a substantial period of success in order to match that kind of income & we won't sustain it it by slashing the wage bill & signing no one at all when we're in the Champs Lg regularly.

I recon they'll leave a loop hole for the Sheikh to invest in one way or another but if they try to prevent it I think we'll challenge them.

[Swales4ever]

Ted Hughes - if the rags can eliminate debt interest payments then they will be able to afford to buy Ronaldo back twice after 3 years!

Beefy et al, sorry but disagree, it doesn't say anything about reversing the policy on clubs not spending more than INCOME. Simply introducing new equity will not it in itself circumvent those rules. Don't forget, it was never about debt it was about inflated spending...

Cheers pal, just piss on my chips why don't ya!

Soz :( The real bright side is the longer time frame for introduction, means we have a couple more years at least before spending on players needs reducing!

If we're going to seriously compete with the top clubs over a long period of time, the Sheikh will have to find a way of getting money into the club for a fair old period of time or otherwise we can forget it. If you go all the way back to 2003 the rags had a turnover of £173m but only made a pre tax profit of £39.6m even then. That's double our current turnover with a much lower wage bill than ours but would only buy half a top player these days.

Now the top clubs are turning over 3-4 times as much as us & the London teams make much more on matchdays wheras the rags etc have money coming in from everywhere. We'd need a substantial period of success in order to match that kind of income & we won't sustain it it by slashing the wage bill & signing no one at all when we're in the Champs Lg regularly.

I recon they'll leave a loop hole for the Sheikh to invest in one way or another but if they try to prevent it I think we'll challenge them.

Yes, You are totally right and spot on. But, in assessing, You miss to drawing attention on the following income rising points, which are of quite immediate impact as soon as the BIG4 settlement is acheived:
a) City entrance fees are currently deemed to praise the fans loyalty by standing about 1/3 of top 4 everage fees. While is probable the Sheikh will continue to carry on such a remarkable policy, it's also fair to expect a significant increase when, hopefully next season, the attendace will be offered an actual "race for title season" with the injection of 2/3 top players to the current team backbone.
b) a reasonable optimistic CL League run (let's say loosing at last 16) is worth at least £ 30m of combined gate+tv income.
c) CL means also, foreingn traveling fans, which use to increase matchdays' income with a good spending attitude
d) If anything, CEO is doing great in developing brand/merchandising worldwide: as soon as it will be boosted by CL greatness and glamorous appeal, the relevant income will exploit
e) already this season gate fees and merchandising are to expected increased in respect of the figures aplied to the recently released "rich clubs' list" which refers to last season
f) re: higher payroll. Assuming City a stable CL/EPL title contender in 2 years time, it is due to decrease: either by the fact that a most attractive Club does not need to inflate wages to get a sign and by the general reduction on market's dynamic that will be driven the UEFA/ECA final agreements.

Aside, while I'm not that arrogant not to be aware that I do not have an ounce of the technical skill that belong to my friend Greek Philosopher, I am as well quite confident to be right when I say that, especially when a company is trading on international markets, balance sheets had been, are and forever will be few less than a joke: if and when needed there will always be a way to inject fresh funds, despite the fact that it is not likely to be debated from an accademic point of view.

[david yearsley]

Ted Hughes - if the rags can eliminate debt interest payments then they will be able to afford to buy Ronaldo back twice after 3 years!

Beefy et al, sorry but disagree, it doesn't say anything about reversing the policy on clubs not spending more than INCOME. Simply introducing new equity will not it in itself circumvent those rules. Don't forget, it was never about debt it was about inflated spending...

JF, just because they can discount the debt interest from the balance sheet for entry into the CL it does not mean that it comes off the bottom line, they will not have 160 quid to spend after servicing the £716M debt, never mind £160M, as the debt will stil be there and no Ronaldo sale or advance on new shirt deals to soften the blow.

That´s how I see it - how can they spend money they won´t have? Whether it´s on the balance sheet or not they still have to pay staggering amounts of interest - unless of course they can borrow AGAIN to finance transfers ;)

[LeanneIsABlue..x]

Sorry, I've read that article three times and still have no idea what the hell it's talking about.. :S

From my understanding, they're trying to prevent the Mega Rich Clubs from dominating Football for decades by imposing limits on spending. Especially spending money given to them for free by wealthy Owners. That sort of money will need to be earned by the Club within the next 5 years. If we win Trophies and sell lots of merchandise then we're on the right tracks.

A Club like Real Madrid can finance the signing of Tranaldo or Kaka because they'll sell huge amounts of Shirts with those Players' names on the back. Real Madrid also have the history / name to attract talent that a Club like City presently can't.

Thank you :)

[Im_Spartacus]

Am I being too simplistic here, but surely the simplest way to get around the rules if debt is ok, but lack of income isnt, the Sheik simply sets up a vehicle to offer an interest free loan of say £1bn - the capital of which cannot be touched by the club.

Anybody familiar with the workings of a Gift & Loan type scheme will know that the capital is always deemed to be a loan and repayable on demand, but all growth and income belongs to the trustees on behalf of the trustees.

The capital is invested into long term equity holdings by the club long term to produce income at say 4% to help us boost our legitimate income, andthe club periodically skims off any long term capital appreciation to fund player purchases, or allows the capital to continue to appreciate slowly to ensure we always have a rising income.

An additional benefit to this is that whilst on paper we would have a £1bn debt, we would also have a £1bn asset so the balance sheet would actually balance

[john@staustell]

This subject has obviously been done to death, but I still cannot understand why Platini:

a) Wants clubs to screw ordinary fans more and more to increase their 'revenues'

b) Wants to penalise those who bring hundreds of millions into football (Eg owners of Chelsea and City), in favour of those who leech hundreds of millions out of the game (Eg Americans at Scouse 1 and Scum).

Is this guy really such an idiot, or is it just a total disregard for fans/little people?

[Ted Hughes]

This subject has obviously been done to death, but I still cannot understand why Platini:

a) Wants clubs to screw ordinary fans more and more to increase their 'revenues'

b) Wants to penalise those who bring hundreds of millions into football (Eg owners of Chelsea and City), in favour of those who leech hundreds of millions out of the game (Eg Americans at Scouse 1 and Scum).

Is this guy really such an idiot, or is it just a total disregard for fans/little people?

To try & please the 'old guard' of clubs; keeping City from running away with all the trophies & at the same time making it more difficult for teams like Villa & Spurs to regularly knock 2 more of the Sky 4 out of the Chump's Lg, hinder the Russians & their oil barons from crashing the party etc etc & thus fend off threats of breakaway leagues, stop the Italians being blown away completely & get help himself re elected.

[btajim]

From my understanding, they're trying to prevent the Mega Rich Clubs from dominating Football for decades by imposing limits on spending. Especially spending money given to them for free by wealthy Owners. That sort of money will need to be earned by the Club within the next 5 years. If we win Trophies and sell lots of merchandise then we're on the right tracks.

A Club like Real Madrid can finance the signing of Tranaldo or Kaka because they'll sell huge amounts of Shirts with those Players' names on the back. Real Madrid also have the history / name to attract talent that a Club like City presently can't.

Thank you :)

It's only for European Competition, though. If we were spending more than we were earning due to the Sheikh's generosity then we might be denied entry in to the Champions League due to their proposed rules. They couldn't do anything to our Premiership campaigns.

[Ted Hughes]

Ted Hughes - if the rags can eliminate debt interest payments then they will be able to afford to buy Ronaldo back twice after 3 years!

Beefy et al, sorry but disagree, it doesn't say anything about reversing the policy on clubs not spending more than INCOME. Simply introducing new equity will not it in itself circumvent those rules. Don't forget, it was never about debt it was about inflated spending...

Cheers pal, just piss on my chips why don't ya!

Soz :( The real bright side is the longer time frame for introduction, means we have a couple more years at least before spending on players needs reducing!

If we're going to seriously compete with the top clubs over a long period of time, the Sheikh will have to find a way of getting money into the club for a fair old period of time or otherwise we can forget it. If you go all the way back to 2003 the rags had a turnover of £173m but only made a pre tax profit of £39.6m even then. That's double our current turnover with a much lower wage bill than ours but would only buy half a top player these days.

Now the top clubs are turning over 3-4 times as much as us & the London teams make much more on matchdays wheras the rags etc have money coming in from everywhere. We'd need a substantial period of success in order to match that kind of income & we won't sustain it it by slashing the wage bill & signing no one at all when we're in the Champs Lg regularly.

I recon they'll leave a loop hole for the Sheikh to invest in one way or another but if they try to prevent it I think we'll challenge them.

Yes, You are totally right and spot on. But, in assessing, You miss to drawing attention on the following income rising points, which are of quite immediate impact as soon as the BIG4 settlement is acheived:
a) City entrance fees are currently deemed to praise the fans loyalty by standing about 1/3 of top 4 everage fees. While is probable the Sheikh will continue to carry on such a remarkable policy, it's also fair to expect a significant increase when, hopefully next season, the attendace will be offered an actual "race for title season" with the injection of 2/3 top players to the current team backbone.
b) a reasonable optimistic CL League run (let's say loosing at last 16) is worth at least £ 30m of combined gate+tv income.
c) CL means also, foreingn traveling fans, which use to increase matchdays' income with a good spending attitude
d) If anything, CEO is doing great in developing brand/merchandising worldwide: as soon as it will be boosted by CL greatness and glamorous appeal, the relevant income will exploit
e) already this season gate fees and merchandising are to expected increased in respect of the figures aplied to the recently released "rich clubs' list" which refers to last season
f) re: higher payroll. Assuming City a stable CL/EPL title contender in 2 years time, it is due to decrease: either by the fact that a most attractive Club does not need to inflate wages to get a sign and by the general reduction on market's dynamic that will be driven the UEFA/ECA final agreements.

Aside, while I'm not that arrogant not to be aware that I do not have an ounce of the technical skill that belong to my friend Greek Philosopher, I am as well quite confident to be right when I say that, especially when a company is trading on international markets, balance sheets had been, are and forever will be few less than a joke: if and when needed there will always be a way to inject fresh funds, despite the fact that it is not likely to be debated from an accademic point of view.

City's ground is often full now but if they put up the prices enough to make a difference it won't always be. Chump's lg games will see even smaller gates for other cups until our fan base increases. Any extra money we made from that & Champ's lg would be immediately swallowed up paying the wage bill etc anyway.

It's taken 7 years of solid success to get the rags turnover up by around £60 million & even if we get ours up that much in a similar time we would only be earning what they were in 2003 & by the time we've done it our whole team will have needed replacing whilst their turnover will have probably gone up by a similar amount. So, we have to out perform the biggest merchandising clubs in the world by about 100% in order to catch them in 10 years. The wage bill will not come down significantly unless we have less players; it will more likely go up significantly.

We need extra investment from other than our football earnings over a period of time in order to catch up or they'll keep moving away from us. I think they'll leave a loophole so the Sheikh can do that.

[john@staustell]

This subject has obviously been done to death, but I still cannot understand why Platini:

a) Wants clubs to screw ordinary fans more and more to increase their 'revenues'

b) Wants to penalise those who bring hundreds of millions into football (Eg owners of Chelsea and City), in favour of those who leech hundreds of millions out of the game (Eg Americans at Scouse 1 and Scum).

Is this guy really such an idiot, or is it just a total disregard for fans/little people?

To try & please the 'old guard' of clubs; keeping City from running away with all the trophies & at the same time making it more difficult for teams like Villa & Spurs to regularly knock 2 more of the Sky 4 out of the Chump's Lg, hinder the Russians & their oil barons from crashing the party etc etc & thus fend off threats of breakaway leagues, stop the Italians being blown away completely & get help himself re elected.

Ah yes, silly me. Time the Sheiks men 'made him an offer he can't refuse'.

Does he own any racehorses?

[Ted Hughes]

This subject has obviously been done to death, but I still cannot understand why Platini:

a) Wants clubs to screw ordinary fans more and more to increase their 'revenues'

b) Wants to penalise those who bring hundreds of millions into football (Eg owners of Chelsea and City), in favour of those who leech hundreds of millions out of the game (Eg Americans at Scouse 1 and Scum).

Is this guy really such an idiot, or is it just a total disregard for fans/little people?

To try & please the 'old guard' of clubs; keeping City from running away with all the trophies & at the same time making it more difficult for teams like Villa & Spurs to regularly knock 2 more of the Sky 4 out of the Chump's Lg, hinder the Russians & their oil barons from crashing the party etc etc & thus fend off threats of breakaway leagues, stop the Italians being blown away completely & get help himself re elected.

Ah yes, silly me. Time the Sheiks men 'made him an offer he can't refuse'.

Does he own any racehorses?

Dunno but we could put a load of frog's heads in his bed.

[Swales4ever]

If we're going to seriously compete with the top clubs over a long period of time, the Sheikh will have to find a way of getting money into the club for a fair old period of time or otherwise we can forget it. If you go all the way back to 2003 the rags had a turnover of £173m but only made a pre tax profit of £39.6m even then. That's double our current turnover with a much lower wage bill than ours but would only buy half a top player these days.

Now the top clubs are turning over 3-4 times as much as us & the London teams make much more on matchdays wheras the rags etc have money coming in from everywhere. We'd need a substantial period of success in order to match that kind of income & we won't sustain it it by slashing the wage bill & signing no one at all when we're in the Champs Lg regularly.

I recon they'll leave a loop hole for the Sheikh to invest in one way or another but if they try to prevent it I think we'll challenge them.

Yes, You are totally right and spot on. But, in assessing, You miss to drawing attention on the following income rising points, which are of quite immediate impact as soon as the BIG4 settlement is acheived:
a) City entrance fees are currently deemed to praise the fans loyalty by standing about 1/3 of top 4 everage fees. While is probable the Sheikh will continue to carry on such a remarkable policy, it's also fair to expect a significant increase when, hopefully next season, the attendace will be offered an actual "race for title season" with the injection of 2/3 top players to the current team backbone.
b) a reasonable optimistic CL League run (let's say loosing at last 16) is worth at least £ 30m of combined gate+tv income.
c) CL means also, foreingn traveling fans, which use to increase matchdays' income with a good spending attitude
d) If anything, CEO is doing great in developing brand/merchandising worldwide: as soon as it will be boosted by CL greatness and glamorous appeal, the relevant income will exploit
e) already this season gate fees and merchandising are to expected increased in respect of the figures aplied to the recently released "rich clubs' list" which refers to last season
f) re: higher payroll. Assuming City a stable CL/EPL title contender in 2 years time, it is due to decrease: either by the fact that a most attractive Club does not need to inflate wages to get a sign and by the general reduction on market's dynamic that will be driven the UEFA/ECA final agreements.

Aside, while I'm not that arrogant not to be aware that I do not have an ounce of the technical skill that belong to my friend Greek Philosopher, I am as well quite confident to be right when I say that, especially when a company is trading on international markets, balance sheets had been, are and forever will be few less than a joke: if and when needed there will always be a way to inject fresh funds, despite the fact that it is not likely to be debated from an accademic point of view.

City's ground is often full now but if they put up the prices enough to make a difference it won't always be. Chump's lg games will see even smaller gates for other cups until our fan base increases. Any extra money we made from that & Champ's lg would be immediately swallowed up paying the wage bill etc anyway.

It's taken 7 years of solid success to get the rags turnover up by around £60 million & even if we get ours up that much in a similar time we would only be earning what they were in 2003 & by the time we've done it our whole team will have needed replacing whilst their turnover will have probably gone up by a similar amount. So, we have to out perform the biggest merchandising clubs in the world by about 100% in order to catch them in 10 years. The wage bill will not come down significantly unless we have less players; it will more likely go up significantly.

We need extra investment from other than our football earnings over a period of time in order to catch up or they'll keep moving away from us. I think they'll leave a loophole so the Sheikh can do that.

I take Your opinion as it comes from a lifetime City supporter far well informed than me. Still, I beg Yr. pardon it looks me a little bit pessimistic, unless well worthy downtoearth. Cuz, assuming what is still to be acheived (CL):
a) I do not know nothing and neither suggesting to rise gate fees to rivals' level (at all), but You'd not disagree that as soon as a couple of aimed injections to the team will feature displays to be either a little more entertaining and more stably effective too (ì.e. enough to actually challange the title) a moderate increase from an average < £30 would be quite fairly welcomed.
b) the big spending investments on players had been already efforded. Imho, a couple of top midfielders an additional top striker (to secure turnover at top level) should be well enough for Mancio to provide that kind of attacking and effective football that I already saw and You still have to efford a little patience to see. This means that won't take all the money anyone there could still expect to be due, especially if you are prepared to consider that a good part of that shall be provided by what you know better than me any manager next summer would expect to sell... :-)
c) on one point I disagree with You: the certainty that wages are due to remain inflated (I mean inflated, not reasonably high for an ambitious Club). As a point of my thinkering I offer You the calm that is used i.r.o. of SWP claims: imo, far fm meaning the club is not interested in keeping him, it just means that their are expecting in 2-3 years time to pay wages in excess of 100,000 only in the rare case the Club will sign the likes of the very very top (i.e. people like messi, tronaldo, shrek, higuain, xavi alonso).

If You wanna follow me on the above assumptions on mid terms basis (3 years), then make your counts and you'll find out a City income stably within the top 10 Clubs in 3-4 years time.
Maybe I'm right, maybe wrong, nobody knows at the moment. Let's cross the fingers, keep faith, get some good luck with enjuries and FA bans of key players and get the 4th. The rest shall follow accordingly, imho.

[failsworthblue]

Our owner is one of the most sucessfull business man on the planet and backed by the desire to propel Abu Dhabi to gobal recognition.

He will overcome whatever objects are put in his path.

Not worried in the slightest.

[Niall Quinns Discopants]

Whole thing has been Platini's effort to score brownie points from neutrals from the off.

[john68]

It took the rags and other major clubs longer than it should take us. Like it or not, they were pioneers in that they did much of the legwork that opened up the glabal market to European football. They helped to create the present day market that now we can tap into and maximise. That should make it far more easy for us to increase income much more quickly.

[Ted Hughes]

It took the rags and other major clubs longer than it should take us. Like it or not, they were pioneers in that they did much of the legwork that opened up the glabal market to European football. They helped to create the present day market that now we can tap into and maximise. That should make it far more easy for us to increase income much more quickly.

Agreed but they're now operating in that market & increasing their own income each year & are already higher profile & competing in the CL, so as much as it's certain we will improve so will they & remain just as far in front of us unless we considerably outperform them, which will be impossible if almost all our income goes on paying the wage bill. We won't even be able to afford to sign the most promising youngsters if that's the case.

The only way I can see us catching them is with considerable investment in the short term to help us bridge the gap. Then, we can operate as they do.

[john68]

I don't even think that massive investment in the short term will enable us to catch them Ted. The lead they have, not just in turnover but the length of time they have been dominating football should be enough to see them overshadow us for a long time.

I don't see catching them as an option in anything but the longer term and our performance on the field will be our best weapon to back up the marketting boys. Without success on the field, our salemen will not have a cat in hells chance.

If the debt hanging round the rags neck happens to see them forced to sell assets and fade on the pitch, then we have a good chance but not for a long time.
Best just to maximise our own targets.

[mcfc1632]

I don't even think that massive investment in the short term will enable us to catch them Ted. The lead they have, not just in turnover but the length of time they have been dominating football should be enough to see them overshadow us for a long time.

I don't see catching them as an option in anything but the longer term and our performance on the field will be our best weapon to back up the marketting boys. Without success on the field, our salemen will not have a cat in hells chance.

If the debt hanging round the rags neck happens to see them forced to sell assets and fade on the pitch, then we have a good chance but not for a long time.
Best just to maximise our own targets.

Sensible John - we should not chase them or anyone - just max our own targets - but thank fuck for the glazers - 2 more years and I think that they will start to fade on the pitch and a lot of their plastic fans will start to slide elsewhere - impacting revenue etc - I want a HULG scarf

[Ted Hughes]

I don't even think that massive investment in the short term will enable us to catch them Ted. The lead they have, not just in turnover but the length of time they have been dominating football should be enough to see them overshadow us for a long time.

I don't see catching them as an option in anything but the longer term and our performance on the field will be our best weapon to back up the marketting boys. Without success on the field, our salemen will not have a cat in hells chance.

If the debt hanging round the rags neck happens to see them forced to sell assets and fade on the pitch, then we have a good chance but not for a long time.
Best just to maximise our own targets.

Sensible John - we should not chase them or anyone - just max our own targets - but thank fuck for the glazers - 2 more years and I think that they will start to fade on the pitch and a lot of their plastic fans will start to slide elsewhere - impacting revenue etc - I want a HULG scarf

When I'm talking about catching them, I don't really just mean the rags, I mean all the top clubs & it's in the context of being able to compete/better them on the pitch. If the rules had stopped the Sheikh from investing, the only way for us to compete with the top clubs , signing players etc, would be to match their income/profit which I agree, isn't likely to happen for a long time. During that time we'd need to be winning everything regularly, which we couldn't do if we can't pay the wages, so it's a catch 22 & we would have been screwed.

Now it looks like the rules have been diluted as I expected they would & the Sheikh will be able to sponsor us where needed, so it's onward & upwards. We can invest in the short term until we're matching them consistantly on the pitch, then one day in the future, catch them financially & not require extra investment (unless the Sheikh fancies the occasional flutter on a Lionel Messi etc of course but that's up to him). One day he may well start to make money from us rather than lose it!

[mcfc1632]

Yeah - I hope you are right and the rules are being diluted to the extent that the Sheik can do a little dabble etc -but I remain still concerned that the detail will not be so positive towards us - there are too many groups that would like to see us not be able to dominate - do not want to (Chelsea) or can not afford to (Scum/Liverpool) put the money in to stay with us.

I will be very glad to be wrong