Sassy Colin
Death or the gladioli!
1 million dollars hehehehe!
50m for Lingard, Smalling, Rojo, Jones? We can't even finalise a deal on Smalling, a regular player on loan and deem essential, for 28m, so what is the prospect of offloading Jones, Rojo, who hardly play, other than free? Rojo FOC might be OK, but are you willing to let Jones go for free?If we get rid of 4-5 of the players we want to get rid of - I see no problem in us spending close to £150 mil. Sanchez has gone, if Lingard, Rojo, Jones and Smalling to name 5 leaves - we should raise close to £50 million and in total save £1 m a week in wages. That should more than cover improved and new contracts.
True - the losses because of Corona is substantial - but so is the reward for C.L, new tv-deals, new improved prize money etc
Amortisation gives us an offset against taxable income - so it reduces our tax bill - otherwise it has no cash flow consequences. (There's no tax relief at the time we buy players - we get it over the life of the contract by amortising the cost.) To get an idea of our obligations with respect to past transfers you need to look at payables ( Q3 - £134m outstanding, £50m in FY2020) and receivables( Q3 - £58m outstanding, £42m in FY2020). Means we owed £68m (net) on past transfers at the start of FY2021 (i.e. now). That's not bad in the context of recent years - mostly because we paid cash for Maguire and James.As of 31 March 2020, the club has £356.4m in outstanding unamortised transfer fees of players we previously signed. These costs will need to be run through the books in the coming years.
In that context, I can't see us going too crazy in the market for the foreseeable future. We have already spent a huge amount of money. Covid just makes things even more tricky.
1 million dollars hehehehe!
Yes, all true. The other area where amortisation is relevant is in the company's reported profit and earnings per share. Even in these days where EBITDA and other cashflow-like metrics are given precedence, I'm sure a listed company like United will want to keep their reported earnings per share as high as possible and not crush it through outsized amort charges.Amortisation gives us an offset against taxable income - so it reduces our tax bill - otherwise it has no cash flow consequences. (There's no tax relief at the time we buy players - we get it over the life of the contract by amortising the cost.) To get an idea of our obligations with respect to past transfers you need to look at payables ( Q3 - £134m outstanding, £50m in FY2020) and receivables( Q3 - £58m outstanding, £42m in FY2020). Means we owed £68m (net) on past transfers at the start of FY2021 (i.e. now). That's not bad in the context of recent years - mostly because we paid cash for Maguire and James.
Drawing down on the credit line gives us the ability to manage what's going to be a strange pattern of cash flows for the rest of the calendar year (and, possibly, beyond), but it's an expensive way of doing business and I'm sure we'll want to get out from under it asap. It's hard to know what the shortfalls are going to be long term - season ticket sales would normally have put £50- £60m in the bank by May 1st, and we're probably losing £10- £15m in merchandising and £10m in other matchday revenues each quarter. Overall it's not going to be something we can't make up, but there's only one pot of money. However much the aggregate shortfall is, that's the amount we'll lose off the transfer budget.