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27 Nov 2024 21:04:38
Wandering - NO!
Firstly you are confusing cash and profits
Secondly you are ignoring/don't understand amortisation.
Please find a friend who can explain football finances to you as I don't have the time or energy to keep this up!
27 Nov 2024 17:10:59
v good thread with lots of excellent contributions!
I agree with lots of bits and disagree with quite a few as well
It's interesting to see posters's views though and great that this contentious/multi faceted issue has created some unusual alliances/agreements.
Firstly undeniably RAN is not a strong defensive full back - but is that ability, ( don't think so - see Salah game last year), attitude, (is he careless and casual in possession or simply too ambitious or optimistic/out of kilter re his colleagues) or tactics, (like Doherty before him RAN is often out of position but as with Doherty is that because the manager wants him to bomb on?).
However I think it is a little harsh to underplay his offensive capabilities. He isn't just good he is amazingly good.
In a better team that could give him a freer role - like TAA at Liverpool albeit RAN is left sided not right - and who could cover his defensive weakness he would be extremely valuable.
Breaking teams down is incredibly hard even for the top sides and RAN is as good as any (except perhaps TAA) defender at doing so. Even at a weak club who don't score many he has more goals and assists (5) so far this season than any other defender in the league.
Consequently I would hope we would get significantly more than £30m.
Clearly at a better side his weaknesses would diminish in importance, ( top teams are forced to defend far less anyway and RAN's shortcomings could be covered), but his strength would become more obvious as his team would have more of the ball and the opposition would not be able to devote as much time and energy to defend him.
He might therefore be even more successful going forwards.
On the next point however sadly whilst we got great prices for Kilman and Nunes we got terrible ones for Neves, Neto and Traore. Consequently I can't be certain that we will extract more than £30m regardless of what I feel about his ability, cf for example Kilman.
Finally Wandering if we get above £20m we would simply buy out the 50% option, (Liam Keen confirmed recently that it is not on profits but sales price and we still have the option at £9.5m.)
So if we sell at £30m we buy out the option for £9.5m and keep £20.5m.
Thefutureisoldgold1's banter replies
30 Nov 2024 16:36:06
Thank you 1960!
I always made clear it was pre player sales figure.
I accept that this is a distinctive way of looking at the accounts, but my point, in answer to a comment on"stability", was that the amortisation of £82m sadly is now part of our on going underlying business, is predictable and repeatable (albeit it will be different number next year as some players will have amortised to zero and of course we have no visibility on player purchases/sales), therefore we can not ignore it.
However player sales are one offs, unpredictable and to a very large extent out of the control of the club - i.e. how much will we get for RAN if we choose to sell him - see thread.
Thus in any debate on "stability" my view, backed by the "canon" of Prudency, is that it is dangerous to include something you have little control over or visibility of.
I assume you can also explain why the cash received in the accounting period that we sell RAN for the putative £30m is not the same as the profit and that in neither cash terms or profit terms will the £10m paid 4 years ago be included in the calculation. I gather RAN signed a 5 year contract and thus will be amortised to £2m by the time he is "sold" in the summer of 2025?
Many thanks once again to you, (and Eastmids who I gather is also an accountant) for your contributions.
28 Nov 2024 21:27:04
OK Wandering last chance to make you happy.
Firstly you don't have to worry about Wolves's returns to HMRC. They are the figures I have pointed out to you. You have correctly copied them off of the internet just misunderstood them.
Secondly You state they made an operating loss of £97m, paid interest of £10.4m (net) and made a profit on player sales of £43m to give a pre tax loss of £64m.
This is completely CORRECT!
Now pre, (that means before!), player sales, they made an operating loss of £97m and paid interest of £10.4m.
Add those two figures together and you get a pre player sales loss of over £107m.
Is that clear?
Why did I mention pre player sales profits?
I have explained this several times already but in case you don't recall it was because I was commenting on our underlying on going business i.e. things that are likely/predicted to happen again next year.
We obviously can't sell Neto and Kilman next year and we have no control over the market for our other players, (to illustrate this I referenced our very own debate on this site re RAN - one of the players considered likely to be sold).
So for stability you need to be able to see/control your future finances.
ps Brighton the poster boys for making profits from player sales made a profit in 2023 of £10m before player sales i.e. they didn't NEED to sell anyone but chose to do so and spectacularly well making £121m meaning they had a pre tax profit of £131m
Finally re RAN in cash terms if we sell for £30m we will pay the option of £9.5m and keep £20.5m. We do not have to pay the £10m purchase price you mention as that was paid when we bought him in the summer of 2021.
In profit terms if we sell him for £30m this coming summer i, e. 4 years after he signed a 5 year contract he will be in the book at £2m - after amortisation - and we make a £28m profit.
The option however makes this more complicated but at £30m we will undoubtedly pay the option of £9.5 and thus merely make £18.5m.
Cash and profits on sales are different numbers - unless it is a homegrown player or a player whose first contract has expired.
Is that clear?
Eastmids can you please peruse the figures above and from Companies house and reassure Wandering that neither Wolves or I are telling people fibs!
27 Nov 2024 21:19:37
I posted a reply to this but it appears not to have been received.
I will keep it short
Add £64.072m and £43.874m, (the player sales profit), and you get the loss before player sales of over £107m as I have now told you several times
In 2022 you need to go to p15 of the 2022 accounts and do the same thing to get the £58m figure I quoted.
I accept that the 2022 pre tax loss is very similar to the 2023 player sales profits and this has confused you.
Re stability of finances - you can't include player sales as they are one offs, unrepeatable and unpredictable - see thread re RAN value above for example.
Underlying profits, from which "stability" is measured are turnover less operating expenses and interest which sadly are not one offs but ongoing.
Jeff is supposed to be managing this but hopefully you can now see both the huge loss (£168.6m minus £266.1m and £10.4m, (net interest charge not gross) ) of over £107m and why I am not impressed with his efforts.
27 Nov 2024 20:59:01
Wandering sadly once again you are either innumerate or just unable to understand basic English.
Am I being foolish and merely biting on your "humorous " wind ups or are you really incapable of understanding?
Sell at £30 million pay £9, 5 million keep £20.5 million.
How can I make this simpler?
27 Nov 2024 17:14:59
Shada - either way that is wrong. If we sell at £30m and don't pay out the option we keep half - i.e. £15m.
But we will buy it out for £9.5m and thus keep £20.5m