Willtell
8:37 Fri Mar 10
Re: West Ham to earn £250 million this season!
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For simplicity about this and transfer budgets let's get a few things straight.
1. Turnover is sales income that should exceed £200m for the first time this year. It does not include property or player sales and the articles arsegrapes refers to are wrong. Sales income is TV revenue, ticket food and clothing sales.
2. Costs are the amounts of expenditure the club makes including wages, office costs etc.
3. Operating profit is the difference between teh costs and the sales. It should reach about £125m with an operating profit of £75m. I'm guessing this as we have no idea how the wage bill has gone.
4. Out of the operating profit come the costs of buying players and other assets depreciated over the expected lifetime of that asset, interest payments on loans and corporation tax.
5, Assets are items the club buys that will be used for more than just one year so the costs are spread over several years.
The UP land is an asset sale. The value of the land is assessed from regular professional valuations and the figures show in the balance sheet in the accounts. This is an extension of the P&L (profit & loss statement of trading) as mentioned in point 3.
Selling UP for £38m was not income of £38m. It had a mortgage of £30m so was only an £8m income. (If you sell your house for £380,000 but have a £300,000 mortgage your income is only £80,000.) This is reflected by an £8m increase in the value of the balance sheet without affecting the trading figures.
The sale of Payet for £25m is treated in a similar way. He cost £11m 18 months before so on a 4 year contract the cost to our operating profit would have been about £3m a year or just over £4m for that 18 month period. So on the balance sheet Payet's value was shown at say £7m. So the balance sheet value was increased by the £18m profit. However, we also bought Fonte and Snodgrass for a similar amount but the entire cost is not allocated to this year and spread over many years.
Clear as mud I expect but put it this way. If our operating profit as at point 3. was to be say £75m and we bought 4 players for £25m each the total cost would be £100m. However, if those players are signed to 5 year contracts the cost would be written down over the 5 years. Or the cost would be about £25m in each of the next 5 years to come off the operating profit figure at point 3.
Now what we don't know is the state of the balance sheet is from previous years of trading activity. One thing is certain that we will have big write downs from previous years. The only sales to add back into the balance sheet is the Tomkins and Payet sales that are worthy of note. So those players and the ground sales only reduce the cost of asset purchases. Their affect is to add funds to the amounts that would otherwise reduce operating profits at point 3.
In short we should expect a lot of purchases and a £100m spend on players this summer is not as outlandish as it may sound. It is probably easily achievable...
I hope that helps and sorry if you cannot follow it but that is basically how accountants earn their money auditing companies. I'm not an accountant btw but was a director for 35 years and learnt the hard way.
Sorry if it is difficult to follow
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kylay
8:33 Thu Mar 9
Re: West Ham to earn £250 million this season!
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good example is the 40-50 million quid outlay for Ayew & Zaza (obviously Zaza being shipped out knocks it down to about 35), but we probably could have attracted a decent striker for 35.
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Sir Alf
7:59 Thu Mar 9
Re: West Ham to earn £250 million this season!
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Lots of good points and debating (yes mass debating ;-) ) . I can see the argument that excluding the TV deal and any existing debt etc... in terms of operational costs and revenue we have seen a big increase from the stadium move or will do. That big increase is still a fraction of overall revenue and costs.
I also get the Alex V argument that our player trading strategy if there is one is poor in comparison with a ton of clubs and many smaller ones. We have not bought resaleable assets or developed them until recently with Payet and Tomkins.
But we have had transfer fee budgets of 30 - 50 million last 3 or 4 seasons. With the increase above and the increase in TV revenue if it were not for our poor investment in players ( no sell on value) and the history of debt, intuitively you would expect a lot more money to be available for transfers. Everton bough Lukaku for around 30 million and paid out 25? million for Schneiderlin. We are now above them in the revenue league but well below them in the disposable budget league it seems.
Yet we need quality players. Not just 2. That comment from Sullivan was an insult to every fan's intelligence. But also a real worry or perhaps statement of intent.
We need to be buying 3 real proven quality or high likelihood of quality players this summer at RB, striker and central midfield. Get it right and we progress. That means paying the fees Everton are now paying. But we need to start also recruiting some more younger talent or developing it to balance the books too.
Unfortunately this next transfer window , we still cannot do that so no doubt Sullivan will be shopping in the 5 - 10 or at best the 15 - 20 million aisle. The risk of mediocrity will increase.
They like their interest of 7% too so as stated, that dent will never clear so nothing will change probably and we will at best tread water,
Without a team on the pitch that we can see competing near the top of the table, the unrest over the move will continue and so it should because to me there was an unwritten contract and promises of a better team as the trade off for the move.
We will all be watching the summer business and Sullivans comments closely. Will we enter into the same transfer market fee range that Everton, now supposedly smaller than us, do? Like fvck we will :-(
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Willtell
6:53 Thu Mar 9
Re: West Ham to earn £250 million this season!
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13 Brentford Rd 4:08
That's absolutely correct. I was looking at the table today and it occurred to me that over the last few years we have grown in parallel with Southampton who we came up with a few years ago now.
Southampton have had a difficult time of it with the owner dying and his daughter, not very attractive, over weight and not interested in football taking then over. She sold close to £200m worth of players and here we are behind them again on goal difference.
In that time before 2016 we hardly sold a player and were top 6 spenders yet only once did we finish in front of them. That says all anyone needs to know about our acquisition policies run by David Sullivan as his private FM17 game.
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Willtell
6:41 Thu Mar 9
Re: West Ham to earn £250 million this season!
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arsegrapes
You are a charmer and clearly have no idea what you're talking about. I've tried to be helpful but it really isn't important.
I have had enough of trying to stop you from making an idiot of yourself so feel free to carry on by yourself. You know, a bit like your sex life...
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arsegrapes
6:30 Thu Mar 9
Re: West Ham to earn £250 million this season!
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Witell, you either won't admit your wrong or your not the sharpest tool in the box, I will provide you the benefit of the former and let you have last word in to save face.
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Willtell
6:21 Thu Mar 9
Re: West Ham to earn £250 million this season!
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No apology given arsegrapes. I did read your post at 3:18 and you still don't understand. I know you said income but you cannot just add property sales to get £244m is what I am saying. It does not work that way.
That is the mistake the journalist is making as well. Just because we sold Payet for £25m and UP for £38m does not mean we will have sales income of nearly £270m. It will still only be £200m.
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arsegrapes
6:00 Thu Mar 9
Re: West Ham to earn £250 million this season!
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Witell you obviously forgot to read my post at 3:18.
Property sales=Additional income.
Sales=Turnover, just so you are made aware.
No need for an apology.
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Willtell
5:34 Thu Mar 9
Re: West Ham to earn £250 million this season!
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arsegrapes
I'm not making it up. That article is wrong too. It's an amateur journalist talking shit as usual...
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Willtell
5:26 Thu Mar 9
Re: West Ham to earn £250 million this season!
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Reply arsegrapes 3:18 Thu Mar 9
"Willtell
I said the 38m from sale of the Boleyn is additional income which it is. I did not say it was turnover? I advise you invest in a new pair of glasses to go with that calculator."
Touchy bastard aren't you? You added the asset sale income to turnover to make it £244m and said I was wrong. I'm not.
WH's turnover next year will be in the region of £200m with or without income from asset sales. It will not be £250m because income from asset sales are not part of the business turnover. Your £244m is wrong. There will be other income from selling Payet for £25m but that doesn't count either...
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arsegrapes
4:34 Thu Mar 9
Re: West Ham to earn £250 million this season!
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https://www.westhamtillidie.com/posts/2017/03/09/west-ham-s-financial-situation-revealed
Says estimated turnover £275m at 31st May 2017
Obviously included the £38m Boleyn income in that.
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13 Brentford Rd
4:08 Thu Mar 9
Re: West Ham to earn £250 million this season!
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Odd because Palace almost went bust after we allegedly did and have always been a smaller club yet still manage to outspend us on single players along with other smaller clubs like Stoke, Southampton and Leicester, which means these clubs must be run much better than us.
We do spend money but the problem is our owners don't have a clue how to build a club on the pitch and are too tight so instead of spending 35m on THE right player they will spend it on 3 players and then get a load of loans and freebies to bulk out the squad and cross their fingers.
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andyd12345
4:07 Thu Mar 9
Re: West Ham to earn £250 million this season!
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Why would I want to "come back to you"?
I could give two shits whether you accept it or not. I certainly have no intention of "coming back to you" with anything at all.
If you're too stupid to realise a subsidised stadium with 80% higher capacity is going to return more profit than a smaller one, then frankly I'm amazed you ever passed your 11plus.
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Nagel
3:57 Thu Mar 9
Re: West Ham to earn £250 million this season!
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andyd12345 2:57 Thu Mar 9
Come back to me when you have some details on what "significantly less costs" and a "lot more profit" actually are. Everything you've said is pure conjecture and wishful thinking, and you're in for a rude awakening I'm afraid.
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arsegrapes
3:18 Thu Mar 9
Re: West Ham to earn £250 million this season!
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Willtell 2:26 Thu Mar 9
I said the 38m from sale of the Boleyn is additional income which it is. I did not say it was turnover?
I advise you invest in a new pair of glasses to go with that calculator
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Alex V
3:04 Thu Mar 9
Re: West Ham to earn £250 million this season!
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andyd12345 2:58 Thu Mar 9
As is often said, if the spending this Summer seems low compared to the club's financial position, then I think we've every right to criticise. I don't think you can say that about recent seasons where the spending has been unprecedented in our history. I believe the intention is to spend every spare penny we can in the playing squad, and I think the figures back that up.
I think Sullivan (and many fans) are way too focused on outlay alone, to the detriment of the sort of horse-trading we see better-run clubs exploit that is the key to genuine progress.
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andyd12345
2:58 Thu Mar 9
Re: West Ham to earn £250 million this season!
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V - I hope you're right. I would love us to break the £100m barrier.
Personally I'd be surprised if we break the £50m barrier
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andyd12345
2:57 Thu Mar 9
Re: West Ham to earn £250 million this season!
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Nagel,
If you can't grasp some very basic facts I fear your understanding of economics is more in line with a child.
We used to have a 36,000 seater stadium with X running costs, and generating Y in ticket sales and merchandising.
We now have a 60,000 seater stadium, with significant less than X running costs and generating considerably more than Y in ticket sales and merchandising. This is fact, not conjecture.
The economic impact of this, is that the OS is generating a lot more revenue and profit than UP. If you aren't able to grasp that, I suggest you ask for a refund in your magic fucking beans.
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Alex V
2:56 Thu Mar 9
Re: West Ham to earn £250 million this season!
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andyd12345 2:41 Thu Mar 9
I think commitments on wages should be taken into account by us when we're evaluating what the club do, yes. Transfer fees are very misleading - for example the two so-called frees last Summer which involve long contracts, inflated wages and no doubt sizeable signing-on payments, yet are dismissed by most as bargain bin activity. Most times the wage commitments will outweigh any transfer fees we pay.
In terms of the Payet savings, the club hasn't had much chance to react to those yet, but as I've predicted already I could see us breaking the £100m mark in transfer fees alone this Summer as a result. Could be very wrong, but as an educated guess it seems feasible.
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Willtell
2:51 Thu Mar 9
Re: West Ham to earn £250 million this season!
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I think you forget or don't know that it is much more complicated than that andy. What about the one-off £15m they had to pay towards LS development costs.
The thing is I don't intend to make excuses for the owners but you have to expect them to want to take back a return on their investment. The £50m odd they invested in WH was never a season ticket or a donation. It was a loan we were all grateful to get in desperate times when our survival was in serious doubt!
If anyone is only just realising that the owners are not only fans then more fool them...
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Nagel
2:47 Thu Mar 9
Re: West Ham to earn £250 million this season!
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andy, there's no point "debating" this any further.
I look forward to the day this season's accounts are published. A lot of you are going to go into meltdown when you see the facts, seeing as your grasp of economics is at the level of an infant with his first piggy bank.
Anyone believing that the Premier League and the move to the new stadium are a "goldmine" have been sold some magic beans. It's only a goldmine in its sell on value to mega rich owners with massive egos who don't expect a return on their investment.
The new TV money increases fees and wages far more than it does profits. I doubt there's many clubs who have made a profit over the last 5 years who don't have massive debts that go far beyond the amount they've gained, and that will continue.
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