thing is, the new owners have not lost a penny on any previous signings. they bought us as is, it's all consolidated, so means nothing
so means nothing
^^^
Not sure it means nothing Kammy.
comment by kammys left foot / mbe (U21862)
posted 10 minutes ago
thing is, the new owners have not lost a penny on any previous signings. they bought us as is, it's all consolidated, so means nothing
----------------------------------------------------------------------
Thats complete and utter nonsense
Hmmm. This is obviously a very complicated call to make.
LIW/HaveFaith: can you please explain to me how selling those players this season at a substantial loss will affect our FFP situation over the three-year limited period?
If Marathe has the option to sell now, why isn't he doing so?
I'm not looking to make excuses for 49ers - I just want to understand.
In fact, I'm pleased all of those players on your list have left the club - whatever the cost - and I'm hoping one or two more from last season's squad might join them still. Firpo is contracted until when, for example?
It's also true that trying to bounce back on the cheap will be difficult.
So, how does FFP limit LUFC player sales and purchases during this window?
Signed players have an asset value of what the club paid for them in year 1. This depreciates linearly each year over the duration of the contract as you know.
So Koch with just 1 year left will be worth about £3m on the books. Based on £12m over a 4 year contract.
Sell him for £5m it will therefore be. £2m profit.
Aaronson will be valued at £20m on the books though. So sell him for £12m and it will be an £8m loss.
Koch is depreciating at £3m/year, Aaronson at £5m/year. So that’s the loss of value for ffp if they stay.
As you can see selling Aaronson for £12m will actually increase the losses on the player for this year from £5m to £8m. Which isn’t good. But the £20m value which was depreciating over the next 4 years has now been ‘written off’ if you like.
So over the next three years you have reduced your losses from £15m to £8m.
With most of these players we would be much better off selling now. And even with players like Aaronson whom it could create a larger loss in year 1, it would be safer to cut our losses and not create a financial melt down situation in year 2 or 3 if we can’t get promotion.
In answer to your other question Marathe doesn’t have the option to sell now because there are clauses in the contract forcing him to accept these offers and the other clubs would much rather take advantage than to pay a transfer fee.
How much Marathe was responsible for the contracts in the first place we will never know. But right now there’s nothing he can do to stop it.
We know these loans are bad. Farke said so himself.
He said something along the lines of "this should never
be allowed to happen again." Pretty conclusive.
Orta created these loans. Whether 49ers were party
to them or not, they can't be overly thrilled at was has
resulted from them.
Its not just the financial aspect, its the uncertainty its created.
Wober was part of the plans, but the club was unable to stop him leaving.
Incredible
comment by LIW Rad a %#@% and so is Orta (U8453)
posted 19 minutes ago
Its not just the financial aspect, its the uncertainty its created.
Wober was part of the plans, but the club was unable to stop him leaving.
Incredible
----------------------------------------------------------------------
and yet the 49ers have tried to justify how good the idea of these loans are.
Why would you do that unless you were part of that?
Okay, thank you for explaining that. Fuq me, that means Orta has really shafted us over the long term. Jeez.
Yes, I am very disappointed in Wober - he said he was staying - what a khaaaaaant! If we lose Cooper as well, we'll be well up schitt creek.
One last question: what happens to those loanees' values if we bounce straight back? Would promotion mean we could ask a decent price for those with sufficiently long contracts, rather than being skanked like if we sell now?
comment by Jaz63 (U8369)
posted 17 minutes ago
Okay, thank you for explaining that. Fuq me, that means Orta has really shafted us over the long term. Jeez.
Yes, I am very disappointed in Wober - he said he was staying - what a khaaaaaant! If we lose Cooper as well, we'll be well up schitt creek.
One last question: what happens to those loanees' values if we bounce straight back? Would promotion mean we could ask a decent price for those with sufficiently long contracts, rather than being skanked like if we sell now?
----------------------------------------------------------------------
It has nothing to do with promotion and all to do with ow well they play.
I’m gonna repeat a couple of posts I made on an earlier thread which might help (genuine apologies to those that have already seen these):
So, as an example … Aaronson’s original balance sheet value of £25m has already been written down to £21m. This suggests his market value is only going one way at present.
It is very dangerous, not to say foolhardy, to keep an asset on a balance sheet at a falsely inflated value. Who would pay £21m for Aaronson now? Nobody is my bet. Therefore, we’ve got ‘hot air’ on the balance sheet right now, and we’re relying on him having a ‘good season’ to bolster his value. Putting it another way, we’re taking a huge risk. This can also probably be repeated for some/most/all of the others who left on loan.
Part 2 to follow …
Part 2:
Why does this matter? A simple example. Say you own a house, and you want to believe it’s worth £500k. You run your life based on the fact that you have a £500k asset. However, when you come to sell it, you realise the true value is £250k. You then have to face the reality of that. By falsely maintaining the value of the asset at the inflated price only delays the pain. Of course, you only get that pain if you sell the asset.
Back to Aaronson, the only way we don’t get that pain is not to sell him until his market value improves. So we trust to luck that he somehow impresses this season and his value increases. This process would carry on until he retires, as which point we’d be forced to re-value his true worth on our balance sheet - i.e. £0.
Btw, many public organisations in history have gone into melt-down when it’s been realised that their balance sheet isn’t worth what it says on paper. A very dangerous, risky situation for any company or person to be in.
comment by The Light Brigade (U22847)
posted 9 minutes ago
Part 2:
Why does this matter? A simple example. Say you own a house, and you want to believe it’s worth £500k. You run your life based on the fact that you have a £500k asset. However, when you come to sell it, you realise the true value is £250k. You then have to face the reality of that. By falsely maintaining the value of the asset at the inflated price only delays the pain. Of course, you only get that pain if you sell the asset.
Back to Aaronson, the only way we don’t get that pain is not to sell him until his market value improves. So we trust to luck that he somehow impresses this season and his value increases. This process would carry on until he retires, as which point we’d be forced to re-value his true worth on our balance sheet - i.e. £0.
Btw, many public organisations in history have gone into melt-down when it’s been realised that their balance sheet isn’t worth what it says on paper. A very dangerous, risky situation for any company or person to be in.
----------------------------------------------------------------------
Spot on pal.
And we are now in a bad negotiation position because everyone knows these players wont be welcome back.
Take koch, a german international, surely we could have got over £5m for him from a german side.
Getting nothing for him.
a disgraceful
comment by LIW Rad a %#@% and so is Orta (U8453)
posted 5 hours, 10 minutes ago
comment by The Light Brigade (U22847)
posted 9 minutes ago
Part 2:
Why does this matter? A simple example. Say you own a house, and you want to believe it’s worth £500k. You run your life based on the fact that you have a £500k asset. However, when you come to sell it, you realise the true value is £250k. You then have to face the reality of that. By falsely maintaining the value of the asset at the inflated price only delays the pain. Of course, you only get that pain if you sell the asset.
Back to Aaronson, the only way we don’t get that pain is not to sell him until his market value improves. So we trust to luck that he somehow impresses this season and his value increases. This process would carry on until he retires, as which point we’d be forced to re-value his true worth on our balance sheet - i.e. £0.
Btw, many public organisations in history have gone into melt-down when it’s been realised that their balance sheet isn’t worth what it says on paper. A very dangerous, risky situation for any company or person to be in.
----------------------------------------------------------------------
Spot on pal.
And we are now in a bad negotiation position because everyone knows these players wont be welcome back.
Take koch, a german international, surely we could have got over £5m for him from a german side.
Getting nothing for him.
a disgraceful
----------------------------------------------------------------------
I think the questuion you have to ask is that....
If this is such a stupid position to have put ourselves in.....why are our current owners justifying it....using almost word for word a conveniently times Facebook post.
I genuinely can't help but think back to GFH and Salem Patel listening in on Leeds forums and direct messaging fan asking their opinions about managers.
We have been left up sh creek buy past owners and current owners who've been here for 4/5 years already and whose skillset that was brought the the party was "being able to negotiate deals in my sleep".
I'm also remind of Bates phrase of people with deep pockets and short arms.
49ers got the club for 170m instead of 400m, there really should be ni reason why there is not some funding available for players.
I think we need to make it clear the difference between value and book value.
Book value is all that matters for ffp (profit and sustainability now) and thats what was discussed above.
But this has no relation to the players actually value is not affected by any factors other than cost of purchase and time left on contract.
Eg. Raphinha would have had a book value of around £8m when he was sold. As he was half way through his contract so was worth half his transfer fee.
Obviously in the real world his value had massively increased.
Light Brigade is right to an extent, but there is no option to revalue assets in football. While in proper business there are many ways to depreciate and revalue assets, FFP (PnS) has set the rules for the only ways to ammortise player transfers.
Promotion to the premier league will make difference to the book value of the players out on loan, they would all be 'devalued' by 1 years worth whatever happens.
In the real world there value may increase slightly as we won't be as desperate to sell. But that's not really their value, that's the fact the club can hold out for a price closer to their value.
Unless someone plays so well on loan that a bidding war starts, we won't get true value for any of these players now. Everyone knows that it's almost impossible for them to play for the club again and so buying clubs will know we are in a position where we will be prepared to accept below market value.
This will be exaggerated without promotion. And is the case for any relegated club anyway, but we have definitely made it worse.
comment by HaveFaithInLeeds (U8688)
posted 1 hour, 2 minutes ago
… but we have definitely made it worse.
----------------------------------------------------------------------
Morning all🌞.
Yep, and for me, this is the crucial point.
Okay, that makes for thoroughly depressing reading this Sunday morning, the opening day of our season. Thank you very much everyone.
So the question that remains then is what was the extent of Marathe's knowledge of these relegation/loan clauses - because that implies a question as to his professional competence. Can't believe he would not have known about this - even more depressing.
Of course he's going to spin it, Jonty, because the entire project depends upon his (many) investors' confidence in the project itself and in his competence to manage it.
Is the inclusion of such relegation clauses a general practice or is it particular to shysters like Victor Orta? Koch was signed following promotion but he had that relegation clause in his contract then? Who else has them in our squad?
Seems to me the inclusion of such relegation/loan clauses is basically a general statement of no confidence in the club's potential. The club has been forced to suffer a loss aggravated by loans subsequent to their triggering. Do such clauses allow Marathe a choice between selling and loaning? If they do, why has he then chosen to loan rather than to sell, even at a loss?
It's nothing short of inviting catastrophe if we don't go up this season - breaking FFP = points reduction, ffs?
ARRRRRRRRRRRRRGGGGGGHHHHHHHHHHH!
You also need to consider the following:
Savings on salary - c£12m (assumption that each of the 8 loanees earns £30kpw)
Transfer / Loan fees received: We got £3m for Rodrigo, and we got £0.45m for Koch - and would be surprised if we did not get something for the rest.
So whilst amortisation will hit us for a hefty sum, which it would have anyway, these savings will offset that in this year.
Even if Paraag knew about these clauses what could he have done?..
Orta was doing the dealing and I don't think the 49ers had as much to say as some think!..
I'm now thinking did AR check these dealings before giving them the go ahead, because it seems there was a lot off odd deals being done in the time Orta was with us!..
If Orta's new bosses ain't keeping an eye on what is happening here, than maybe they'll get a little upset in years to come!..
Sign in if you want to comment
Where’s all the money gone?
Page 2 of 2
posted on 5/8/23
thing is, the new owners have not lost a penny on any previous signings. they bought us as is, it's all consolidated, so means nothing
posted on 5/8/23
so means nothing
^^^
Not sure it means nothing Kammy.
posted on 5/8/23
comment by kammys left foot / mbe (U21862)
posted 10 minutes ago
thing is, the new owners have not lost a penny on any previous signings. they bought us as is, it's all consolidated, so means nothing
----------------------------------------------------------------------
Thats complete and utter nonsense
posted on 5/8/23
Hmmm. This is obviously a very complicated call to make.
LIW/HaveFaith: can you please explain to me how selling those players this season at a substantial loss will affect our FFP situation over the three-year limited period?
If Marathe has the option to sell now, why isn't he doing so?
I'm not looking to make excuses for 49ers - I just want to understand.
In fact, I'm pleased all of those players on your list have left the club - whatever the cost - and I'm hoping one or two more from last season's squad might join them still. Firpo is contracted until when, for example?
It's also true that trying to bounce back on the cheap will be difficult.
So, how does FFP limit LUFC player sales and purchases during this window?
posted on 5/8/23
Signed players have an asset value of what the club paid for them in year 1. This depreciates linearly each year over the duration of the contract as you know.
So Koch with just 1 year left will be worth about £3m on the books. Based on £12m over a 4 year contract.
Sell him for £5m it will therefore be. £2m profit.
Aaronson will be valued at £20m on the books though. So sell him for £12m and it will be an £8m loss.
Koch is depreciating at £3m/year, Aaronson at £5m/year. So that’s the loss of value for ffp if they stay.
As you can see selling Aaronson for £12m will actually increase the losses on the player for this year from £5m to £8m. Which isn’t good. But the £20m value which was depreciating over the next 4 years has now been ‘written off’ if you like.
So over the next three years you have reduced your losses from £15m to £8m.
With most of these players we would be much better off selling now. And even with players like Aaronson whom it could create a larger loss in year 1, it would be safer to cut our losses and not create a financial melt down situation in year 2 or 3 if we can’t get promotion.
In answer to your other question Marathe doesn’t have the option to sell now because there are clauses in the contract forcing him to accept these offers and the other clubs would much rather take advantage than to pay a transfer fee.
How much Marathe was responsible for the contracts in the first place we will never know. But right now there’s nothing he can do to stop it.
posted on 5/8/23
We know these loans are bad. Farke said so himself.
He said something along the lines of "this should never
be allowed to happen again." Pretty conclusive.
Orta created these loans. Whether 49ers were party
to them or not, they can't be overly thrilled at was has
resulted from them.
posted on 5/8/23
Its not just the financial aspect, its the uncertainty its created.
Wober was part of the plans, but the club was unable to stop him leaving.
Incredible
posted on 5/8/23
comment by LIW Rad a %#@% and so is Orta (U8453)
posted 19 minutes ago
Its not just the financial aspect, its the uncertainty its created.
Wober was part of the plans, but the club was unable to stop him leaving.
Incredible
----------------------------------------------------------------------
and yet the 49ers have tried to justify how good the idea of these loans are.
Why would you do that unless you were part of that?
posted on 5/8/23
Okay, thank you for explaining that. Fuq me, that means Orta has really shafted us over the long term. Jeez.
Yes, I am very disappointed in Wober - he said he was staying - what a khaaaaaant! If we lose Cooper as well, we'll be well up schitt creek.
One last question: what happens to those loanees' values if we bounce straight back? Would promotion mean we could ask a decent price for those with sufficiently long contracts, rather than being skanked like if we sell now?
posted on 5/8/23
comment by Jaz63 (U8369)
posted 17 minutes ago
Okay, thank you for explaining that. Fuq me, that means Orta has really shafted us over the long term. Jeez.
Yes, I am very disappointed in Wober - he said he was staying - what a khaaaaaant! If we lose Cooper as well, we'll be well up schitt creek.
One last question: what happens to those loanees' values if we bounce straight back? Would promotion mean we could ask a decent price for those with sufficiently long contracts, rather than being skanked like if we sell now?
----------------------------------------------------------------------
It has nothing to do with promotion and all to do with ow well they play.
posted on 6/8/23
I’m gonna repeat a couple of posts I made on an earlier thread which might help (genuine apologies to those that have already seen these):
So, as an example … Aaronson’s original balance sheet value of £25m has already been written down to £21m. This suggests his market value is only going one way at present.
It is very dangerous, not to say foolhardy, to keep an asset on a balance sheet at a falsely inflated value. Who would pay £21m for Aaronson now? Nobody is my bet. Therefore, we’ve got ‘hot air’ on the balance sheet right now, and we’re relying on him having a ‘good season’ to bolster his value. Putting it another way, we’re taking a huge risk. This can also probably be repeated for some/most/all of the others who left on loan.
Part 2 to follow …
posted on 6/8/23
Part 2:
Why does this matter? A simple example. Say you own a house, and you want to believe it’s worth £500k. You run your life based on the fact that you have a £500k asset. However, when you come to sell it, you realise the true value is £250k. You then have to face the reality of that. By falsely maintaining the value of the asset at the inflated price only delays the pain. Of course, you only get that pain if you sell the asset.
Back to Aaronson, the only way we don’t get that pain is not to sell him until his market value improves. So we trust to luck that he somehow impresses this season and his value increases. This process would carry on until he retires, as which point we’d be forced to re-value his true worth on our balance sheet - i.e. £0.
Btw, many public organisations in history have gone into melt-down when it’s been realised that their balance sheet isn’t worth what it says on paper. A very dangerous, risky situation for any company or person to be in.
posted on 6/8/23
comment by The Light Brigade (U22847)
posted 9 minutes ago
Part 2:
Why does this matter? A simple example. Say you own a house, and you want to believe it’s worth £500k. You run your life based on the fact that you have a £500k asset. However, when you come to sell it, you realise the true value is £250k. You then have to face the reality of that. By falsely maintaining the value of the asset at the inflated price only delays the pain. Of course, you only get that pain if you sell the asset.
Back to Aaronson, the only way we don’t get that pain is not to sell him until his market value improves. So we trust to luck that he somehow impresses this season and his value increases. This process would carry on until he retires, as which point we’d be forced to re-value his true worth on our balance sheet - i.e. £0.
Btw, many public organisations in history have gone into melt-down when it’s been realised that their balance sheet isn’t worth what it says on paper. A very dangerous, risky situation for any company or person to be in.
----------------------------------------------------------------------
Spot on pal.
And we are now in a bad negotiation position because everyone knows these players wont be welcome back.
Take koch, a german international, surely we could have got over £5m for him from a german side.
Getting nothing for him.
a disgraceful
posted on 6/8/23
comment by LIW Rad a %#@% and so is Orta (U8453)
posted 5 hours, 10 minutes ago
comment by The Light Brigade (U22847)
posted 9 minutes ago
Part 2:
Why does this matter? A simple example. Say you own a house, and you want to believe it’s worth £500k. You run your life based on the fact that you have a £500k asset. However, when you come to sell it, you realise the true value is £250k. You then have to face the reality of that. By falsely maintaining the value of the asset at the inflated price only delays the pain. Of course, you only get that pain if you sell the asset.
Back to Aaronson, the only way we don’t get that pain is not to sell him until his market value improves. So we trust to luck that he somehow impresses this season and his value increases. This process would carry on until he retires, as which point we’d be forced to re-value his true worth on our balance sheet - i.e. £0.
Btw, many public organisations in history have gone into melt-down when it’s been realised that their balance sheet isn’t worth what it says on paper. A very dangerous, risky situation for any company or person to be in.
----------------------------------------------------------------------
Spot on pal.
And we are now in a bad negotiation position because everyone knows these players wont be welcome back.
Take koch, a german international, surely we could have got over £5m for him from a german side.
Getting nothing for him.
a disgraceful
----------------------------------------------------------------------
I think the questuion you have to ask is that....
If this is such a stupid position to have put ourselves in.....why are our current owners justifying it....using almost word for word a conveniently times Facebook post.
I genuinely can't help but think back to GFH and Salem Patel listening in on Leeds forums and direct messaging fan asking their opinions about managers.
We have been left up sh creek buy past owners and current owners who've been here for 4/5 years already and whose skillset that was brought the the party was "being able to negotiate deals in my sleep".
I'm also remind of Bates phrase of people with deep pockets and short arms.
49ers got the club for 170m instead of 400m, there really should be ni reason why there is not some funding available for players.
posted on 6/8/23
I think we need to make it clear the difference between value and book value.
Book value is all that matters for ffp (profit and sustainability now) and thats what was discussed above.
But this has no relation to the players actually value is not affected by any factors other than cost of purchase and time left on contract.
Eg. Raphinha would have had a book value of around £8m when he was sold. As he was half way through his contract so was worth half his transfer fee.
Obviously in the real world his value had massively increased.
Light Brigade is right to an extent, but there is no option to revalue assets in football. While in proper business there are many ways to depreciate and revalue assets, FFP (PnS) has set the rules for the only ways to ammortise player transfers.
Promotion to the premier league will make difference to the book value of the players out on loan, they would all be 'devalued' by 1 years worth whatever happens.
In the real world there value may increase slightly as we won't be as desperate to sell. But that's not really their value, that's the fact the club can hold out for a price closer to their value.
Unless someone plays so well on loan that a bidding war starts, we won't get true value for any of these players now. Everyone knows that it's almost impossible for them to play for the club again and so buying clubs will know we are in a position where we will be prepared to accept below market value.
This will be exaggerated without promotion. And is the case for any relegated club anyway, but we have definitely made it worse.
posted on 6/8/23
comment by HaveFaithInLeeds (U8688)
posted 1 hour, 2 minutes ago
… but we have definitely made it worse.
----------------------------------------------------------------------
Morning all🌞.
Yep, and for me, this is the crucial point.
posted on 6/8/23
Okay, that makes for thoroughly depressing reading this Sunday morning, the opening day of our season. Thank you very much everyone.
So the question that remains then is what was the extent of Marathe's knowledge of these relegation/loan clauses - because that implies a question as to his professional competence. Can't believe he would not have known about this - even more depressing.
Of course he's going to spin it, Jonty, because the entire project depends upon his (many) investors' confidence in the project itself and in his competence to manage it.
Is the inclusion of such relegation clauses a general practice or is it particular to shysters like Victor Orta? Koch was signed following promotion but he had that relegation clause in his contract then? Who else has them in our squad?
Seems to me the inclusion of such relegation/loan clauses is basically a general statement of no confidence in the club's potential. The club has been forced to suffer a loss aggravated by loans subsequent to their triggering. Do such clauses allow Marathe a choice between selling and loaning? If they do, why has he then chosen to loan rather than to sell, even at a loss?
It's nothing short of inviting catastrophe if we don't go up this season - breaking FFP = points reduction, ffs?
posted on 6/8/23
ARRRRRRRRRRRRRGGGGGGHHHHHHHHHHH!
posted on 6/8/23
You also need to consider the following:
Savings on salary - c£12m (assumption that each of the 8 loanees earns £30kpw)
Transfer / Loan fees received: We got £3m for Rodrigo, and we got £0.45m for Koch - and would be surprised if we did not get something for the rest.
So whilst amortisation will hit us for a hefty sum, which it would have anyway, these savings will offset that in this year.
posted on 6/8/23
Even if Paraag knew about these clauses what could he have done?..
Orta was doing the dealing and I don't think the 49ers had as much to say as some think!..
I'm now thinking did AR check these dealings before giving them the go ahead, because it seems there was a lot off odd deals being done in the time Orta was with us!..
If Orta's new bosses ain't keeping an eye on what is happening here, than maybe they'll get a little upset in years to come!..
Page 2 of 2