Blue Since 76 wrote:Hutch's Shoulder wrote:Saul Goodman wrote:Are these financials before or after May 31?
The report I read on ESPN says the profit on player transfers was prior to the huge outlay on Sterling, De Bruyne, and Otamendi, which would surely drop that profit to about a 120m deficit on player transfers. Wouldnt that take away the overall net profit?
Yes, it is to May 31st, which is the end of our financial year, and those transfers came afterwards so they will go in next year's accounts, as will whatever we get for Edin, Jovetic and the various youngsters we have sold, plus any new commercial deals since then, some of impact of the extended stadium capacity and the effect of any trophies we progress in this season etc. etc.... As with any ongoing business, there is always activity in train when the accounts are taken, but nothing to worry about or diminish the achievement.
From what I read over summer, the amount received from sales appears all in this year, whereas, as you say, purchases are amortised over the length of the contract. So if Jovetic was £25m over 5 years, he was costing us £5m a year plus wages. We sell him for £10m (can't remember what it actually was), meaning in this year's accounts, we're £15m up, plus wage savings. We then buy de Bruyne for £55m over 6 years, so about £9m a season, so we've got a saving this year and then need to find an extra £4m a season from next year, but by that point, the new TV deal has kicked in, plus the extra seats etc.
Same thing with the other purchases and sales. It also means selling £10m of academy products let's you buy a £50m player. You can understand the reasons for the odd few million spent on kids, as if they don't turn into what we need, selling them on actually works for us.
It's as if Soriano knew what he was doing after all. Maybe he should write a book on how to build a club financially.
Not quite on Jovetic. He cost us £25m, so amortising his cost across 5 seasons does indeed mean it shows on the books as £5m per season, but when you sell him you also have to crystallise the remaining amount. His sale for £10m? (if indeed it happened this summer) will result in a £5m loss once you add back in the £15m not yet accounted for.
Watch on 
