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LFC Accounts 2015/16

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Difficult to determine when accounts dont list individual items except in broad categories and when you consider accounts are always 'in the past.'

 

The club took on a lot more non playing staff and had to pay the living wage across the board. I cant see that leading to the increase in overall wage costs significantly.

 

I can only presume we are contributing paying the wages of players loaned out and effectively kicked out of the club ie sakho, benteke and the like.

 

Doesnt the club have something like 50 players on the books?

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Anyone know what agents fees would come under? Have they included these in the overall wages? Would expect them to be under something else myself but you never know!

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Redundancy costs are listed separately at £15.7m.

 

The increase in wages is £42m, this is massive, and at the moment, I can't figure out why. The players we bought in were on modest contracts, and I don't remember that many contract extensions. We know that they wage structure is a lot more incentive based, and we did reach 2 finals, however we also did not finish in the top 4.

Thanks, 42 million increase is a lot especially as we had a biggish squad when we were in the Champions League.

 

We also reached two semifinals the year before. So can't see them paying much more for a LOSING final to a semi final. Secondly I can't see them giving out much bonuses for reaching a league cup final.

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Anyone know what agents fees would come under? Have they included these in the overall wages? Would expect them to be under something else myself but you never know!

 

I think some clubs roll up agents' fees into the player's salary the way they'd do with signing-on fees so in accounting terms, the agent's fee comes directly out of the player's salary rather than the club's pocket. It means that the figure for wages and salaries looks high but when those annual reports on agents' fees paid are published, the amount paid in agents' fees looks quite small relative to the club's transfer and contract activity.

 

You can't do this for all agents' fees as there are occasions where the club itself is using an agent's services (trying to find a buyer for an unwanted player for example) so they have to record it accordingly.

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Even this expert thinks it is difficult to explain.

 

Where's the 42 million disappeared to John.

 

Swiss Ramble‏ @SwissRamble

 

@sportingintel I would tend to agree with you, but difficult to explain the significant increase in the wage bill

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I think some clubs roll up agents' fees into the player's salary the way they'd do with signing-on fees so in accounting terms, the agent's fee comes directly out of the player's salary rather than the club's pocket. It means that the figure for wages and salaries looks high but when those annual reports on agents' fees paid are published, the amount paid in agents' fees looks quite small relative to the club's transfer and contract activity.

 

You can't do this for all agents' fees as there are occasions where the club itself is using an agent's services (trying to find a buyer for an unwanted player for example) so they have to record it accordingly.

 

I believe agent fees in respect of a transfer would be included with the cost of buying the player (unless the selling club is paying) so would be included in the intangible assets. The player would then also pay the agent separately out of his own wages

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The £42m wage bill increase in the most recent accounts really surprised me so I have done a ‘back of a cigarette box’ calculation to see how it has arisen. It goes without saying that the figures won't be entirely accurate as they are not in the public domain but I have done my best to piece it together from the available information.

 

The most obvious category was new signings and the acquisitions of Benteke, Firmino, Clyne, Milner, Ings, Gomez, Bogdan, Grujic, Caulker, Allan and the full time arrival of Origi from Lille will have added slightly north of £26m to the wage bill.

 

We also handed out a lot of new contracts / pay rises in 2015/16 – Coutinho, Henderson, Skrtel, Sakho, Mignolet, Flanagan, Smith, Ibe, Brannagan, Ojo – which when added to Sturridge’s bumper deal in October 2014 would have given an uplift in the order of £11m.

 

Klopp replaced Rodgers in October 2015 and was joined by his backroom team of Buvac and Krawietz. Rodgers’ and his entourage were paid £15.7m by way of ‘redundancy and associated costs’, which are listed separately in the accounts. However, Klopp is reportedly on up to £7m p/a (including bonuses) so it seems reasonable to allow £3m for himself and his team for October 2015 – May 2016.

 

The final £2m appears to relate to the club employing 70 new staff between Commercial / Admin and Ground Staff. At an average salary of £28.5k that seems about right.

 

The upshot of all this activity is that LFC had a wages to turnover ratio of 69% in 2015/16. The Board will not be too worried about that as the new Premier League deal and revamped Main Stand will increase revenues by up to £70m next season.

 

Last Summer’s signing of Mane, Wijnaldum Matip & Co. will have added approximately £21m to the wage bill over the course of their first year, which will probably be pushed up to £25m by the time Lovren and Lallana’s new deals are included. About £18m in wages has already been clawed back by the departure of Skrtel, Allen, Benteke, Illori, Ibe and the rest.

 

My best guess is that LFC's wages to turnover ratio is currently in the ballpark of 60% and we will try to offload Lucas, Sturridge, Manniger, Moreno, Sakho, Wisdom, Flanagan, Bogdan, Ings, Markovic, and possibly Can to free up a further £550k a week in wages for new signings. On that basis, Klopp could make six £90k a week signings this Summer and we’d still end up with a wages to turnover ratio of a very healthy 60%.

 

I suspect Klopp was well aware there would be limited funds to spend in his first few transfer windows (as the club had to fund the Rodgers' payoff etc.) and he used that time to assess the squad thoroughly. He has made a conscious decision to freeze out Sakho, Moreno, Markovic,and Sturridge; presumably to encourage them to move on and provide him with the resources to shape the squad in his own image.

 

I know this stuff bores a lot of people to tears but it actually does provide some insight into what is actually achievable. With Champions League qualification, I would expect the club to spend up to £90m this Summer. 

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The £42m wage bill increase in the most recent accounts really surprised me so I have done a ‘back of a cigarette box’ calculation to see how it has arisen. It goes without saying that the figures won't be entirely accurate as they are not in the public domain but I have done my best to piece it together from the available information.

 

The most obvious category was new signings and the acquisitions of Benteke, Firmino, Clyne, Milner, Ings, Gomez, Bogdan, Grujic, Caulker, Allan and the full time arrival of Origi from Lille will have added slightly north of £26m to the wage bill.

 

We also handed out a lot of new contracts / pay rises in 2015/16 – Coutinho, Henderson, Skrtel, Sakho, Mignolet, Flanagan, Smith, Ibe, Brannagan, Ojo – which when added to Sturridge’s bumper deal in October 2014 would have given an uplift in the order of £11m.

 

Klopp replaced Rodgers in October 2015 and was joined by his backroom team of Buvac and Krawietz. Rodgers’ and his entourage were paid £15.7m by way of ‘redundancy and associated costs’, which are listed separately in the accounts. However, Klopp is reportedly on up to £7m p/a (including bonuses) so it seems reasonable to allow £3m for himself and his team for October 2015 – May 2016.

 

The final £2m appears to relate to the club employing 70 new staff between Commercial / Admin and Ground Staff. At an average salary of £28.5k that seems about right.

 

The upshot of all this activity is that LFC had a wages to turnover ratio of 69% in 2015/16. The Board will not be too worried about that as the new Premier League deal and revamped Main Stand will increase revenues by up to £70m next season.

 

Last Summer’s signing of Mane, Wijnaldum Matip & Co. will have added approximately £21m to the wage bill over the course of their first year, which will probably be pushed up to £25m by the time Lovren and Lallana’s new deals are included. About £18m in wages has already been clawed back by the departure of Skrtel, Allen, Benteke, Illori, Ibe and the rest.

 

My best guess is that LFC's wages to turnover ratio is currently in the ballpark of 60% and we will try to offload Lucas, Sturridge, Manniger, Moreno, Sakho, Wisdom, Flanagan, Bogdan, Ings, Markovic, and possibly Can to free up a further £550k a week in wages for new signings. On that basis, Klopp could make six £90k a week signings this Summer and we’d still end up with a wages to turnover ratio of a very healthy 60%.

 

I suspect Klopp was well aware there would be limited funds to spend in his first few transfer windows (as the club had to fund the Rodgers' payoff etc.) and he used that time to assess the squad thoroughly. He has made a conscious decision to freeze out Sakho, Moreno, Markovic,and Sturridge; presumably to encourage them to move on and provide him with the resources to shape the squad in his own image.

 

I know this stuff bores a lot of people to tears but it actually does provide some insight into what is actually achievable. With Champions League qualification, I would expect the club to spend up to £90m this Summer. 

 

A pretty good summation. You dont mention agents fees though. In previous seasons we've seen a steady increase in these although they dont appear to be specified in the current accounts (or I just didnt notice them).

 

I think in previous seasons we've paid at least £10m and while I might have been dreaming, did we once pay as much as £20m agents fees?

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The £42m wage bill increase in the most recent accounts really surprised me so I have done a ‘back of a cigarette box’ calculation to see how it has arisen. It goes without saying that the figures won't be entirely accurate as they are not in the public domain but I have done my best to piece it together from the available information.

 

The most obvious category was new signings and the acquisitions of Benteke, Firmino, Clyne, Milner, Ings, Gomez, Bogdan, Grujic, Caulker, Allan and the full time arrival of Origi from Lille will have added slightly north of £26m to the wage bill.

 

We also handed out a lot of new contracts / pay rises in 2015/16 – Coutinho, Henderson, Skrtel, Sakho, Mignolet, Flanagan, Smith, Ibe, Brannagan, Ojo – which when added to Sturridge’s bumper deal in October 2014 would have given an uplift in the order of £11m.

 

Klopp replaced Rodgers in October 2015 and was joined by his backroom team of Buvac and Krawietz. Rodgers’ and his entourage were paid £15.7m by way of ‘redundancy and associated costs’, which are listed separately in the accounts. However, Klopp is reportedly on up to £7m p/a (including bonuses) so it seems reasonable to allow £3m for himself and his team for October 2015 – May 2016.

 

The final £2m appears to relate to the club employing 70 new staff between Commercial / Admin and Ground Staff. At an average salary of £28.5k that seems about right.

 

The upshot of all this activity is that LFC had a wages to turnover ratio of 69% in 2015/16. The Board will not be too worried about that as the new Premier League deal and revamped Main Stand will increase revenues by up to £70m next season.

 

Last Summer’s signing of Mane, Wijnaldum Matip & Co. will have added approximately £21m to the wage bill over the course of their first year, which will probably be pushed up to £25m by the time Lovren and Lallana’s new deals are included. About £18m in wages has already been clawed back by the departure of Skrtel, Allen, Benteke, Illori, Ibe and the rest.

 

My best guess is that LFC's wages to turnover ratio is currently in the ballpark of 60% and we will try to offload Lucas, Sturridge, Manniger, Moreno, Sakho, Wisdom, Flanagan, Bogdan, Ings, Markovic, and possibly Can to free up a further £550k a week in wages for new signings. On that basis, Klopp could make six £90k a week signings this Summer and we’d still end up with a wages to turnover ratio of a very healthy 60%.

 

I suspect Klopp was well aware there would be limited funds to spend in his first few transfer windows (as the club had to fund the Rodgers' payoff etc.) and he used that time to assess the squad thoroughly. He has made a conscious decision to freeze out Sakho, Moreno, Markovic,and Sturridge; presumably to encourage them to move on and provide him with the resources to shape the squad in his own image.

 

I know this stuff bores a lot of people to tears but it actually does provide some insight into what is actually achievable. With Champions League qualification, I would expect the club to spend up to £90m this Summer. 

 

You've not accounted for players leaving though. There were 2 big earners in Gerrard and Johnson, and also Sterling, Lambert and Brad Jones. That must be a good £15m at least, possibly even £2-3m more. Then there were players who we loaned out in Balotelli and Markovic which should have seen decent savings, and then the younger players not paid much but added together might not be insignificant.

 

It does get closer to filling the gap than I thought though, and when you account for our new incentive based contracts, getting to 2 finals could close that up further.

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A pretty good summation. You dont mention agents fees though. In previous seasons we've seen a steady increase in these although they dont appear to be specified in the current accounts (or I just didnt notice them).

 

I think in previous seasons we've paid at least £10m and while I might have been dreaming, did we once pay as much as £20m agents fees?

 

Agent fees are not listed, but I don't think these are included in wages, they should be added to transfer cost.

 

Signing on fees could possibly be included in wages, the way they are accounted for is mentioned and they come under "Admin Expenses" which is where wages also are, however the items listed in the notes for Admin Expenses does not equal total Admin Expenses in the in the P&L, so there are things not listed which could include signing-on fees

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You've not accounted for players leaving though. There were 2 big earners in Gerrard and Johnson, and also Sterling, Lambert and Brad Jones. That must be a good £15m at least, possibly even £2-3m more. Then there were players who we loaned out in Balotelli and Markovic which should have seen decent savings, and then the younger players not paid much but added together might not be insignificant.

 

It does get closer to filling the gap than I thought though, and when you account for our new incentive based contracts, getting to 2 finals could close that up further.

 

I avoided getting bogged down in departures / loans as we are not privy to the details of any contribution to the wages of players sold or on loan. I was actually nerdy enough to work out the cost of wages for departing players between the start of the club's financial year and their date of disposal but only really wanted to provide a rough explanation for the £42m increase in wages.

 

I believe that agent's fees are amortised as 'signing on fees' under the admin heading in the accounts. The FA disclosed that our payments to agents in the 5-month period from October 2015 to February 2016 totaled £6.6m so we can extrapolate that out to around £15m over the financial year.

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Why would they own the club if they weren't making any money off it?

 

Genuine question.

 

They plan to make their money through increasing the value of the club and at some point sell some or all of their holding to make their return.

 

They have said they did not plan to take money out of the club (at least in the medium term), and for the club to be self sufficient, so by not taking money out , the club has more money to invest and in theory increases its value.

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It's insane we've managed to spend more than Arsenal and Spurs on wages. 13/14 aside we've consistently finished below them. How the fuck Spurs manage to keep a squad that good that happy on what must be much lower wages than what they could get elsewhere is just unbelievable.

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I avoided getting bogged down in departures / loans as we are not privy to the details of any contribution to the wages of players sold or on loan. I was actually nerdy enough to work out the cost of wages for departing players between the start of the club's financial year and their date of disposal but only really wanted to provide a rough explanation for the £42m increase in wages.

 

I believe that agent's fees are amortised as 'signing on fees' under the admin heading in the accounts. The FA disclosed that our payments to agents in the 5-month period from October 2015 to February 2016 totaled £6.6m so we can extrapolate that out to around £15m over the financial year.

 

The increase in wages is a net number though, you can't look what was added without considering what was removed. We did have 'common knowledge' of what some of the players were on who left, Gerreard was £130-150k per week, Johnson was £100-120k etc.

 

Signing on fees are the payments made to players when they sign, for instance we would have paid Milner a significant signing on fee was there was not transfer fee, but I think even those where there is a transfer fee may get a signing on fee as well. In the notes it says that the 'cost' is spread over the life of the player's contract, even though it might be paid as a lump sum.

 

Agent fees where you are paying the agent for services in the process of buying (or selling) a player are different, they are a cost of the transfer and should I think (I'm not an accountant) get added to the transfer fee and so it would be recognised as an intangible asset. This is alluded to in the notes for accounting treatment for intangible assets where it says "costs associated with the acquisition of player" and not just their transfer fee.

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It's insane we've managed to spend more than Arsenal and Spurs on wages. 13/14 aside we've consistently finished below them. How the fuck Spurs manage to keep a squad that good that happy on what must be much lower wages than what they could get elsewhere is just unbelievable.

 

Spurs massively underpay the market rate for their players, even after they have renegotiated loads of them this season. Think Eriksen was doubled to £70k, he could get loads more elsewhere.

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I believe that agent's fees are amortised as 'signing on fees' under the admin heading in the accounts. The FA disclosed that our payments to agents in the 5-month period from October 2015 to February 2016 totaled £6.6m so we can extrapolate that out to around £15m over the financial year.

 

Think we can guestimate the agent fees from what we 'know' about transfer fees and the increase in Intangible Assets in Balance Sheet.

 

Transfers: Benteke (£32.5m), Firmino (£21m with possible additions to £29m), Clyne (£12.5m), Ings (£6.5m possible up to £8m), Grujic (£5.1m), Gomez (£3.5m, possible up to £6m). I make that £81.6m as a base number.

 

In the accounts it states that additions to Players' Registrations was £101.8m, so a £20.2m difference. This might not be just agent fees, would imagine there are legal fees and other related costs. We might also have had to have paid more already for things like Gomez making first team appearances or Firmino scoring a certain amount of goals etc. But between £15m and £20m would be a decent guess.

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Spurs massively underpay the market rate for their players, even after they have renegotiated loads of them this season. Think Eriksen was doubled to £70k, he could get loads more elsewhere.

Yeah I know mate, it's just fucking mental how good they are at doing it. Can't get my head round it. Can't get my head round how bad we are at it either.

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Probably helps that they are doing really well and are still young. They might also take things like that with regards to player mentality into account when looking at buying players.

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I find it hard to believe Spurs can attract and retain players like erikson, lloris and a few others in London for what is seemingly the top end (plau maybe 10%) of the Championship wage.

 

I suspect spurs pay a big appearance and win bonus to their players or at least, their 'stellar' ones.

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