This New Chelsea Owner

[TD_LFC]

7 minutes ago, Scott_M said:

Gutted. 

 

On the plus side it's just doubled the cost of some of the bigger signings they want to make.

[TD_LFC]

Just now, Megadrive Man said:

 

Chelsea voted for it according to David Ornstein!

 

Back dating concession, or they don't want to be seen to be the crying outsider.

 

 

[Pidge]

But has it enabled them to spend more in the short-term on the basis of higher assumed (and likely real) losses?

 

Brain is mush today so likely getting stuff backwards.

 

Guess the bigger question is whether those losses remain under the FFP threshold.

[TD_LFC]

2 minutes ago, Pidge said:

But has it enabled them to spend more in the short-term on the basis of higher assumed (and likely real) losses?

 

Brain is mush today so likely getting stuff backwards.

 

Less per year over a longer period which reduced yearly losses/allowed them to spend more, now they spend more per year over a shorter period.

 

Enzo, for example, costs them about 12 million a year for 8.5 years. If they signed him with the 5 year cap in place it would cost them 21 million a seasons but over a shorter period.

 

(excluding wages)

[Pidge]

So the backdating perspective means the contracts they've signed to-date can still be amortised on the original basis, even in future accounts submissions?

[TD_LFC]

7 minutes ago, Pidge said:

So the backdating perspective means the contracts they've signed to-date can still be amortised on the original basis, even in future accounts submissions?

 

Yep.

 

Signings made up to the implementation of the rule will still be amortised over the full length of the contract and accounted for in that way (remains to be seen how a standard contract extension will be handled, will it trigger the new rule or will the legacy rule still apply).

 

They can give future signings a 10 year contract but the amortisation of that fee will be capped to 5 years.

 

If you can get a player/agent to sign up to it there's an obvious work around for the rule that would work like a yearly wage rise % on top of multiple club dependent extension triggers (dependent on the answer to contract renewals).

[Pidge]

So they get the theoretical advantage and are happy enough to stop anyone else from following. Considering how it's gone it's not a shock they voted for the change then.

 

Newcastle probably the main potential benefactors I guess. Although there would be others looking to utilise the approach when the pressure is on.

[CrownPaints]

22 minutes ago, Megadrive Man said:

 

Chelsea voted for it according to David Ornstein!

David Ornstein apparently tapped his nose and uttered "we're playing the long game chaps..."

[TD_LFC]

The advantage being taken away from other clubs is all theoretical as well because not many are willing to offer beyond 5 years, you get the occasional 5.5/6

 

Risk outweighs the reward.

[polymerpunkah]

What are they going to do with the duds?

 

I'm assuming any time they sell a player with an agreement to pay part of his salary that still counts against their allowable spending?

 

Because I can see a fair bit of that in their near future.

[TD_LFC]

24 minutes ago, polymerpunkah said:

What are they going to do with the duds?

 

I'm assuming any time they sell a player with an agreement to pay part of his salary that still counts against their allowable spending?

 

Because I can see a fair bit of that in their near future.

 

That's why they've prioritised selling home grown players up to this point, zero book value so all profit.

 

If they sold Enzo after 1 year then they'd still be on the hook for £90ish million (12ish million per year) in terms of book value over the remaining 7.5 years of his deal.

 

Only anything above that would be considered 'profit'.

 

In cash terms they'd obviously benefit from the amount they received minus anything still owed to Benfica as the payment structure of a transfer is different to book value.

 

If they get stuck with a load of Winston Boegarde's (or Jack Rodwell's) they're in trouble because 7 or 8 years is a long time to sit on a contract doing nothing.

 

The alternative is having to make concessions on deals by, like you said, subsidising wages or reducing transfer fee's.

 

 

[dave u]

3 hours ago, Megadrive Man said:

Along the same lines,

In Baseball Boehly offered this guy a 10 year contract worth 700 million but has now changed it in to a 19 year contract as below.

 

 

 

That lad is a fucking dickhead if he's agreed to that. By the time he's getting the big money the world might be over given the way things are going. I'd be wanting as much of that money front loaded so I could actually enjoy it.

[El Rojo]

TLW Chief Drops Huge Hint About World's End Date 

 

[TD_LFC]

5 minutes ago, dave u said:

 

 

That lad is a fucking dickhead if he's agreed to that. By the time he's getting the big money the world might be over given the way things are going. I'd be wanting as much of that money front loaded so I could actually enjoy it.

 

He picks up 40 million a year in endorsements alone so he's not going to struggle, he's just ensured that he's going to pick up a decent sized pension.

 

There's also some precedent for what's been done and protection against clubs suffering financially that could impact earnings.

 

Bobby Bonilla, the most famous example, signed a deferred payment deal with the Mets that carried an 8% interest rate that see's him picking up over a million dollar every July until 2035 at which point he'll be in to his 70's 

 

The Met's used the money they would have given Bonilla to invest in Madoff's Ponzi scheme and lost their shirt, it was reported at one point that he was their highest paid player on the team despite not playing for them

 

FSG deferred 75million of Rafael Devers contract that will be paid up to 2043

[AngryOfTuebrook]

3 hours ago, Megadrive Man said:

Along the same lines,

In Baseball Boehly offered this guy a 10 year contract worth 700 million but has now changed it in to a 19 year contract as below.

 

Hair by Ted Stroehmann

[Megadrive Man]

40 minutes ago, dave u said:

 

 

That lad is a fucking dickhead if he's agreed to that. By the time he's getting the big money the world might be over given the way things are going. I'd be wanting as much of that money front loaded so I could actually enjoy it.

 

Apparently It's because Shohei gets something like $40m per year in endorsements and doesn't want to use up the entire salary cap himself, and on top of that once he's done playing he can move out of California and not have to pay high state income taxes on the deferred part of his salary.

[TD_LFC]

Other thing to consider with Ohtani's contract is that he was projected to sign for a more conventional deal in the 500 million range (which still would have been a record) by deferring that majority of the cash he's been able to add 200 million on top of that projection.

[Barrington Womble]

17 hours ago, Megadrive Man said:

 

Chelsea voted for it according to David Ornstein!

If it's not back dated, it makes sense for Chelsea to vote for it. If means nobody else can exploit the loophole, while they still get to benefit from it from their previous actions. 

[Megadrive Man]

2 hours ago, Barrington Womble said:

If it's not back dated, it makes sense for Chelsea to vote for it. If means nobody else can exploit the loophole, while they still get to benefit from it from their previous actions. 

 

They might be doing it to protect themselves from signing completely unproven young players and sticking them on 8 year contracts again!

[Code]

The state of Chelsea the last year should not be possible considering the money they have spent.

 

Look at this.

 

 

[lifetime fan]

On 12/12/2023 at 10:13, Scott_M said:

Talk they need to raise money in January to sign new players but can only make a profit off the home grown players and that despite being one of their best players this season & captaining the side, Connor Gallagher is the one likely to go as he’s only got 18 months on his contract. 
 

It’s a complete bizarre situation. Of all the academy players they’ve sold - Tomori, Abraham, Guehi, Zouma, Mount etc - are the ones they’ve signed any better? Incredibly dubious.

And yet talk within the club is of spending up to between £60-80m in Jan. 

 

There’s going to have to be a point the PL look at their accounts more closely. 

[VladimirIlyich]

9 hours ago, lifetime fan said:

And yet talk within the club is of spending up to between £60-80m in Jan. 

 

There’s going to have to be a point the PL look at their accounts more closely. 

And then take a decade to do anything about it.

[Scott_M]

Are they still dipping into that “working capital” they had as part of the takeover?

 

They paid £4.25bn for the club, £1.75bn of that classed as “working capital”, everybody assumed to be for a new ground, in reality it’s just been…

 

[lifetime fan]

11 minutes ago, Scott_M said:

Are they still dipping into that “working capital” they had as part of the takeover?

 

They paid £4.25bn for the club, £1.75bn of that classed as “working capital”, everybody assumed to be for a new ground, in reality it’s just been…

 

I’ve no idea where the money is coming from (I assume that won’t be a net spend, but that’s only my assumption) but the talk at the club is they’ll spend again in Jan and could even go as high as £60-80m. 

[JustTosh]

I know it’s now forbidden, but this 8 years contract stunt with spreading the cost over an 8 year period is in itself destructive.

In 2030, probably long after Caicedo stopped playing for them, they’d have to deduct around 15M from their transfer budget because of that transfer back in 2023. We have a saying where I live ”pissing in your pants to keep warm”. That’s exactly what they’re doing.

It’s not impossible, I’d even say probable, Chelsea won’t be a PL team 5 years from now.