Topic: Deloitte Money League

[Fromola]

Take the Shrewsbury tie. The away game showcased the squad isn't as strong as we'd like in some areas, whereas the replay showed what great depth we have in players coming through, but the point would be the wage bill for the replay team would be relatively very low.

We only have two senior full backs (technically 3 with Clyne who is on a big wage but not played for a couple of years) and lack a bit of depth in terms of attack (those accounts probably include Sturridge and Moreno wage).

Get in Werner and another senior left back, possibly a Lallana replacement (or promote Jones) and the squad is that bit stronger. We're still pretty much playing the same core players every week.

[Fordy]

Wage bill seems excessive given that the squad isn't the strongest (the core team that play every week certainly is but we're short of cover at full back or certainly like-for-like options for the front 3). Midfield has big depth.

The likes of Clyne, Lovren, Lallana, Shaqiri are on a first team wage though without really getting much game time. If we can bring 2 or 3 in (Werner, another left back, maybe promote Jones/Williams) then that'd more than balance that back out if you add a couple of new contracts (VVD/Wijnaldum).

That makes no sense mate. What do you expect them to be on? Youth wages?

Players of quality won't come cheap in terms of wages. Werner won't go here on peanuts then how do we know how much game time he would get?

Bottom line is that you have to pay the going rate and remember it's a squad game. All 21-23 members of our squad are vital and it doesn't matter if they have played 0 games or all the games this season.

Clyne would of more than likely have left in the summer and now injured but he has been decent for us over the years.

[TheMightyReds]

Keep in mind that infrastructure improvements are exempt from FFP and are provided by low interest loans from the owners, like lending money to yourself.  I understand it all eventually falls under the same tree, and that there is no "free" money, but I think these expenses are classified differently. Maybe someone with the know how could elaborate further?

Hi, yep I know. FFP doesn't count this kind of investment. However as we all know it's still money that will be in our account records for our information, and affects other parts of the business.

It's good to know we are being handled by competent financial people this time though.

What I meant by the wage bill was that we can get smarter. I should have said around 50% of turnover. That is still huge if you think about how other businesses operate. Football needs to be careful. We can either be smart and re-align the squad or we keep upping the commercial revenues which then would push the % lower, enable all these profits to keep coming and easily keep passing FFP.

Of course the vultures (agents, some greedy players etc.) then circle if you keep posting up huge profits. But we can get smarter, more efficient and the new kit deal will help immensely. I feel too that by not sponsoring the Training ground yet, the commercial people have missed a trick. Hopefully deals like this are on the way.

Liverpool should comfortably be a profitable business not just the past 2 years or so but every single year.

[rebel23]

The likes of Clyne, Lovren, Lallana, Shaqiri are on a first team wage though without really getting much game time. If we can bring 2 or 3 in (Werner, another left back, maybe promote Jones/Williams) then that'd more than balance that back out if you add a couple of new contracts (VVD/Wijnaldum).

We pay the going rate in terms of wages. They wouldn;t be here on our bench for less money than their peers.

[Fromola]

That makes no sense mate. What do you expect them to be on? Youth wages?

Players of quality won't come cheap in terms of wages. Werner won't go here on peanuts then how do we know how much game time he would get?

Bottom line is that you have to pay the going rate and remember it's a squad game. All 21-23 members of our squad are vital and it doesn't matter if they have played 0 games or all the games this season.

Clyne would of more than likely have left in the summer and now injured but he has been decent for us over the years.

I agree with you, the point i'm making is for that wage bill we could probably get a bit more for our buck in terms of the overall squad (the example I used was the lack of cover on the left hand side). Obviously our core first XI are second to none.

[Charlie Adams fried egg]

Jesus, Can the people weighing in about wages just please stop.

Unless we know the breakdown of guaranteed wages vs performance bonus and the proportion of the overall wage bill attributed to players we can't comment on whether it's too high or not. 58% is pretty good. Would prefer that to the bitters at about 75%.

What we do know is that contracts are incentivised and that 11 players renewed as well as signing the likes of Fabinho, Keita, Allison,Shaqiri while losing no big earners. Given that, plus us winning the CL it was only going one way. In fact a year ago many people on here were predicting wages around the £300m mark, especially if we had a successful season.

Yes we have a small group of players, probably on £4-5m per year that haven't delivered much, but most clubs have them, and we'll probably be getting rid of a few of ours in the summer, having done the same in summer 19. But what we also have is a squad which because of the contract situation is worth a fortune, and a lower amortisation bill due to the extended contracts.

More important than that, we have a top class squad who have been successful and are determined to win even more.
I'm interested in the numbers, but a bit like the playing side, happy to let experienced people make the decisions.

[El Lobo]

I agree with you, the point i'm making is for that wage bill we could probably get a bit more for our buck in terms of the overall squad (the example I used was the lack of cover on the left hand side). Obviously our core first XI are second to none.

This guy is honestly worse than Al in trying to turn every single thread into a negative. At least you know Al loves the club, this one has had eight years of snide trolling

The idea of there being a perfect squad with perfect wages really is mind blowing, it’s like you start every day fresh with no knowledge of anything that’s happened before. The greatest club sides (which we’re one of now, despite what you’d like to think Fromola  ) have had their players who ‘aren’t earning their wage’ or whatever. It’s such a nothing argument.

[Fromola]

This guy is honestly worse than Al in trying to turn every single thread into a negative. At least you know Al loves the club, this one has had eight years of snide trolling

The idea of there being a perfect squad with perfect wages really is mind blowing, it’s like you start every day fresh with no knowledge of anything that’s happened before. The greatest club sides (which we’re one of now, despite what you’d like to think Fromola  ) have had their players who ‘aren’t earning their wage’ or whatever. It’s such a nothing argument.

I already said the team is second to none .

[cdav]

Think its very impressive to have generated a large profit with the investment in the squad and new contracts for a number of key players.

Few points for the next period is the increased revenue from premier league and different distribution of champions league (4th vs 2nd), additional commercial partners, etc. I'd imagine both VVD and Alisson will get new deals soon to reward their performance and lower the amortisation on their deals too

The wages also show how much we are paying our stars- the likes of Salah and Mane will be amongst the highest paid in the league. Add for the next period the Nike deal and a premier league title and there should be a decent bit of room on the wage bill whilst remaining at 55-60%ish

[Uncle Ronnie]

https://www.theguardian.com/football/2019/may/22/premier-league-finances-club-guide-2017-18-accounts-manchester-united-city

All clubs’ accounts from May 2019. Only Spurs had a wage v. turnover of under 50%.

[KurtVerbose]

All clubs’ accounts from May 2019. Only Spurs had a wage v. turnover of under 50%.

And how's that working out for them?

[newterp]

And how's that working out for them?

Pretty well - they are the CL runners up, in the CL knockout stages, and have Jose Mourinho has their manager. Also a huge Cheese Stadium. We’d be lucky to be there they are.....


10 years ago maybe.

[mickeydocs]

I agree with you, the point i'm making is for that wage bill we could probably get a bit more for our buck i

We are World, European and very soon to be Premier League Champions, this would count as pretty good bang for your buck in any possible definition.
Take your meds.

[Morgana]

We are World, European and very soon to be Premier League Champions, this would count as pretty good bang for your buck in any possible definition.
Take your meds.

Don't know what that guy is on. Obviously the further we go in the CL, and the more goals (and assists) the likes of Bobby, Trent, Robbo, et. al. score, and the more clean sheets the defensive team get, the more we are going to be paying in player bonuses. But I'm sure the club would much rather have three CL finals in a row with a hefty wage bill than have their players, coaches and executives watching the finals from the sofa. People need to stop complaining about stupid stuff.

[smutchin]

We are World, European and very soon to be Premier League Champions, this would count as pretty good bang for your buck in any possible definition.

But we’ve never hosted an NFL match at Anfield, which clearly shows an appalling lack of ambition from our owners. They really don’t have a clue how to run a football club.

[bornandbRED]

Anyone got a link to the full accounts?

[CraigDS]

Anyone got a link to the full accounts?

Not out yet.

[Charlie Adams fried egg]

Cutting it a bit fine, maybe even making use of the leap year 

[CraigDS]

Cutting it a bit fine, maybe even making use of the leap year 

I imagine they've been submitted just not up on companies house yet.

[Too early for flapjacks?]

If we made £533m and spent £310m on payroll, broadly what happens to the other £223m? Assume sales and purchases of players are not included in these figures?

[TepidT2O]

Cutting it a bit fine, maybe even making use of the leap year 

They’ve usually been released early in March

[Eeyore]

They’ve usually been released early in March

Yeh.

2014, 15, 16 and 2017 were released in March but 2018 was released on the 14th of Feb.

[Eeyore]

If we made £533m and spent £310m on payroll, broadly what happens to the other £223m? Assume sales and purchases of players are not included in these figures?

The major operating expenses after the wage bill will be the amortisation of player registrations, which is the cost of their transfer fee divided by the length of their contract and for the last accounting period it is likely we would of made a loss regarding player trading.

The accounts though are far better than most people predicted and  really positive.

[stoopid yank]

The accounts though are far better than most people predicted and  really positive.

 

Who are you and what did you do with the real Al?

[Samie]

"Nurse!"

"Oi Nurse!"

My friend Al is being positive again, time for his meds.

[BaZ87]

If we made £533m and spent £310m on payroll, broadly what happens to the other £223m? Assume sales and purchases of players are not included in these figures?

It's difficult to answer this without knowing exactly what you're asking, if that makes sense.

If you're asking about cash flow and where's the money gone then firstly you have all your general expenses of running a business - gas, electric, water, insurance, accountancy fees, legal fees, interest, tax etc etc. From what we've been told about these accounts the club then paid a chunk of the main stand loan back and reduced bank debt. There would also be installments and add-ons of historical transfers and cash gone into the new training ground. We'll know exactly what the club spent and if and how much cash it retained when the full accouns are published.

If you were asking from a profit/loss point of view then the headline profit isn't as straight forward as some people may think. Your revenue less you wages & general operating expenses (gas, electric etc) gives you your EBITDA. This is basically the cash profit the business makes before you deduct all your paper costs*, add back in your profit on player sales or pay any tax or interest. Very loosely speaking this gives you an idea of how much the club could spend, net, on transfers and infrastructure work without borrowing any money. 17/18 season our EBITDA was around £95m.

*The biggest paper cost (ie not necessarily a cash expense) a club has is amortisation - this is the way transfer fees are recorded on the accounts. When you sign a player for £50m, it's not a single £50m cost on the accounts even if the club paid in a single installment, that £50m is spread over the life of his contract. If the player signed a 5 year deal then he'd cost the club £10m per season from an accounting point of view and his 'value' would decrease by that. So after 2 years he's now worth £30m and if he then signs a new 5 year contract, the £10m per season cost would reduce to £6m per season. As a result of this, every player the club has ever paid a transfer fee for that's still at the club, is an expense on the accounts even if the fee has bee fully paid. The clubs amortisation bill for the previous year totalled £77m. This is likely to rise a fair bit in these last set of accounts due to the signings of Alisson, Fabinho, Keita and Shaq.

[John C]

Nice one BaZ, that's cleared that up then.
Any further questions?

You're all free to go the pub.










Cheers mate, we appreciate the effort.

[Bostik Triangle]

It's difficult to answer this without knowing exactly what you're asking, if that makes sense.

If you're asking about cash flow [...]

If you were asking from a profit/loss point of view [...]

What about if I'm asking about fake sponsorship revenue streams and funnelled money through international shell companies and how we amortise the intangible asset that upon checking a few invoices seems to be the capitalised cost of 'crack' legal teams?

You haven't mentioned any of that for some reason, Baz.

[BaZ87]

What about if I'm asking about fake sponsorship revenue streams and funnelled money through international shell companies and how we amortise the intangible asset that upon checking a few invoices seems to be the capitalised cost of 'crack' legal teams?

You haven't mentioned any of that for some reason, Baz.

That'll be behind the paywall in next weeks edition.

[Peabee]

They’ve usually been released early in March

Deadline used to be 10 months. It’s now 9 months.

[TepidT2O]

Deadline used to be 10 months. It’s now 9 months.

The fine is so small for being a bit late that .... well, big companies just don’t really care.

What’s not in the headlines of course are cash reserves.

When Coutinho buggered off, we sold the fee on to a company who paid it up front (for a modest sum).

Given that, I wonder how much of the fees for VVD/Keita/Alisson etc have been paid off in full. That will still effect amortisation of course but it may not effect cash reserves. (Although clubs sell the fee on as it helps them pay the VAT on the transfer fee, this can be difficult if payments are spread over some period).

In addition, most other fees seem to be paid over a two year period, that would mean 2018 and 2019.  Which may explain not signing anyone in 2019... did we have ready cash to hand?  You’d like to assume we would next summer though...

As ever, a Swiss ramble review of our accounts would be interesting

[Bostik Triangle]

When Coutinho buggered off, we sold the fee on to a company who paid it up front (for a modest sum).

That right? Factored?

Still, why would you not if you can, interest rates are so low, you'd be mad not to.

[CraigDS]

When Coutinho buggered off, we sold the fee on to a company who paid it up front (for a modest sum).

You sure?

I don’t remember seeing any charges on companies house regarding that. I know Everton have and the charges are there for it.

Thought it was a dodgy source that came out with that at the time.

[BaZ87]

You sure?

I don’t remember seeing any charges on companies house regarding that. I know Everton have and the charges are there for it.

Thought it was a dodgy source that came out with that at the time.

It was confirmed in Barca's accounts that the money was owed to a 3rd party. Trade debtors stood at just under £169m in the 17/18 accounts, up from £106m in 16/17 - the increase being as a result of Coutinho's sale, which would suggest that the club sold off the debt after the end of the accounting period. When these accounts are released we'll know for certain.

[rebel23]

It was confirmed in Barca's accounts that the money was owed to a 3rd party. Trade debtors stood at just under £169m in the 17/18 accounts, up from £106m in 16/17 - the increase being as a result of Coutinho's sale, which would suggest that the club sold off the debt after the end of the accounting period. When these accounts are released we'll know for certain.

Something like this Baz?

Joao Felix & Antoine Griezmann: Meet the lender behind the some of football's biggest transfers

https://www.bbc.co.uk/sport/football/51038488

[CraigDS]

It was confirmed in Barca's accounts that the money was owed to a 3rd party. Trade debtors stood at just under £169m in the 17/18 accounts, up from £106m in 16/17 - the increase being as a result of Coutinho's sale, which would suggest that the club sold off the debt after the end of the accounting period. When these accounts are released we'll know for certain.

Surely there would be a charge on the club though, as it would be secured against that income.

Or is it more a case we demanded it up front and Barca borrowed it. Hence the money goes from Barca to them and it doesn’t involve us?

[BaZ87]

Something like this Baz?

Joao Felix & Antoine Griezmann: Meet the lender behind the some of football's biggest transfers

https://www.bbc.co.uk/sport/football/51038488

Just skimming through that, that's kind of the reverse of what's happened. Barca didn't borrow the money from a 3rd party to purchase Coutinho, the money was due to be paid in installments to us. We however have needed or wanted the money paid quicker (probably to pay bigger up front fees on Alisson et al) so sold the outstanding debt to a 3rd party. There would be no change in the terms from Barca's point of view (they just pay the 3rd party instead of us), we get the money Barca still owed us in one lump sum minus a couple of million and x bank collect the full amount from Barca.

It is however entirely possible that the company in the article or a similar company is the one that we sold the debt to given that they specialise in these sorts of deals.

[BaZ87]

Surely there would be a charge on the club though, as it would be secured against that income.

Or is it more a case we demanded it up front and Barca borrowed it. Hence the money goes from Barca to them and it doesn’t involve us?

We haven't borrowed the money, we've sold the money owed to us from Barca. Completely different circumstances but it's a similar process to when a bank sells off bad debt to a debt collection company. They're owed £100 and they sell that debt to a 3rd party for £20 who the go about collecting the original £100 (plus fees).

Obviously in this case it's not a bad debt, we just wanted or needed the money quicker than Barca were due to pay it and of course wouldn't have sold the debt for anything like 20p to the £1 as in the example above. With interest rates so low we could have borrowed the money very cheaply had we gone down that road and with the debt being relatively secure, I'd be surprised if it cost us more than a couple of percent of what was owed.

[CraigDS]

We haven't borrowed the money, we've sold the money owed to us from Barca. Completely different circumstances but it's a similar process to when a bank sells off bad debt to a debt collection company. They're owed £100 and they sell that debt to a 3rd party for £20 who the go about collecting the original £100 (plus fees).

Obviously in this case it's not a bad debt, we just wanted or needed the money quicker than Barca were due to pay it and of course wouldn't have sold the debt for anything like 20p to the £1 as in the example above. With interest rates so low we could have borrowed the money very cheaply had we gone down that road and with the debt being relatively secure, I'd be surprised if it cost us more than a couple of percent of what was owed.

No I get the concept, however the agreement is between ourselves and Barca, so surely the 3rd party would take a charge against the money owed to us from Barca, therefore against us.

Similar to what Everton did with Lukaku and a couple of other sales?

[BaZ87]

No I get the concept, however the agreement is between ourselves and Barca, so surely the 3rd party would take a charge against the money owed to us from Barca, therefore against us.

Similar to what Everton did with Lukaku and a couple of other sales?

Barca's accounts show that the money is owed to a 3rd party, not us so it would appear that an agreement was made for x bank to collect the debt.