Money to spend this summer...or not?

Once again, just driving back home, I've been listening to TS and on there was Gab Marcotti. He was talking about different clubs and players and the subject of City and Ancelotti came up.

He went on to say that any manager coming in will be taking over an ageing squad and will need new players. He then said, what loads of journo's etc are saying....City don't have anywhere near £200m to spend on players - what is needed.

Now I know Dawg, you keep saying £250m........so I'm asking the question:

What is it all these journo's are missing, when pretty much all of them claim that we won't have a great deal of money to spend, certainly not enough to go on a spree like United have?

I'm starting to get worried that they are correct....and all our talk on here is wildly optimistic. I hope not!

The relaxing of FFP is one thing, but we still don't know exactly what they are relaxing the rules around.

I am basing my claims on new money coming into the club since the last accounts. We spent nearly £50M last season and didn't, or shouldn't, really have a problem with FFP.

Once we get into FFP profit, then I multiply by 5. I assume that new players are on 5 year contracts and we only have to account for 20% of their transfer fee in the accounts.

The salaries still have to be taken into consideration, but I am generally relying on some sales to release funds to pay for the new salaries. If Yaya, Dzeko, Lampard, Milner, Nasri, Boyata and Jovetic leave, that will free up nearly £800k per week. It will also net us about £80M in transfer fees (Yaya - £15M, Dzeko - £20M, Nasri - £20M, Boyata - £2M, Jovetic - £20M, Sinclair £2.5M).

£800k per week would pay for about 5 or 6 players comfortably.

There was talk back in March ( and last year) that City were in the process of re-negotiating the Etihad deal upwards to £80M a season. Since the academy is built and paid for, more of the deal will hit the p&l account. I expect at least £45M extra from this one source alone.

http://www.mirror.co.uk/sport/football/news/manchester-citys-new-80million-per-year-sponsorship-5290985

There is talk of re-negotiating the Nike deal upwards to £20M, an increase of £8M per season.

http://www.dailymail.co.uk/sport/football/article-2906407/Manchester-City-set-windfall-look-renegotiate-Nike-kit-deal.html

We're supposed to have 3 sponsors for the academy worth £15M a year for 5 years. 

http://www.mirror.co.uk/sport/football/news/manchester-city-set-400million-jackpot-4377857

I'm sure we could use the academy for small concerts too as it has a capacity of 7,000, but I'm not including any possible money from this source.

We've also got the new seats which I reckon will be worth £10M a season as there will be lots more corporate seats (as well as the £299 seasoncards).

There are many more sponsorship deals being signed and I'd conservatively guess that's worth £10M a season to us.

The CL tv deal will be worth at least £15M a season to us. More if we get further

One off expenses (like Bobby's sacking) inflated losses the previous year. New contracts on lower basic salaries, should also reduce our outgoings especially when we don't win stuff!!!

Just looking at those major possible/probable new sources of income:

Etihad deal - £45M
Nike deal - £8M
Academy deal - £15M
New seats - £10M
Other sponsorships - £10M
CL tv deal - £15M

That's £103M per season of new money. Since we are supposed to be at break even right now, that can be spent however we like (into the squad for instance). 

Multiply by 5, and we get a figure of well over £500M.

If you say we can only spend what we earn and all our transfers are paid off in full immediately, we should still have that £88M and the £80M from other sales, making a total of £183M.

But it doesn't work like that. Either Sheikh Mansour can give us more money to spend so we can pay for the players in one go, or we go by the normal instalment plan others adopt.

A good source for info (though I didn't use it) is http://swissramble.blogspot.com/2015/01/manchester-city-roll-with-it.html

Hope this helps!!!

PS Even if you don't believe in the new Etihad deal or the Nike deal, the others are worth £50M a season. Multiply by 5 and, hey presto, £250M.

Not really...as it's all speculation, by newspapers - whose journalists are the one's saying we won't have anywhere near £200m to spend and hope that we actually get transfer fees up front and at the numbers you quoted - that's my point

But thanks for the ground work and links.

Ha, I totally forgot about the new CL tv deal with BT. It's not easy to find what the final figures will be (depends on how well we do!), but we should be getting around £15M a season more than this current season.

I'll change the numbers above to account for this.

We've also got the extra money coming in the following season for the PL tv deal which is worth at least £55M extra each season. Even the bottom club would get over £90M just from the tv deal. No wonder European clubs want FFP amended!

Then if the figures and predictions are correct, why are so many so-called experts, saying we won't be able to spend that much and will have to rely on player transfers out of the club to raise the money?

I'm all for it - I'm hoping your figures are correct.

It's because most of them are journalists and football journalists at that. They aren't financial wizzkids and I bet they have to ask others as to what the numbers mean.

Melton did an article recently on amortisation and how that works.

The only stumbling block is the full transfer fees have to be paid up front and the club doesn't want to stump up all the money in one go.

Can't honestly believe that 90% of the journalists don't know anything about FFP rules and club finances - most do articles on them at each club.

I'm just hoping you're correct.

Which ever way you look at it, MP isn't gonna spend anywhere near that amount anyway. All our speculated big money signings (Sterling, Pogba) are just that...and are in no-way guaranteed to come. To be honest, we'll probably spend £50m on 4-5 has beens and injury plagued players

I think we only have one signing left from Mancini's last season - Richard Wright.

Maicon - gone
Rodwell - gone
Garcia - gone
Sinclair - gone
Nastasic - gone

We cannot afford to buy so poorly again.

You could argue a bit on the numbers here and there.

Would we get £10M from the extra seats or £8M???
Are we getting £15M or £16M from the academy sponsorship???

Whatever the exact numbers, we will be getting money that we weren't getting in years gone by. That's brand new money which we can spend.

If the journos came out and said why we've only got a bit to spend then we can discuss their reasoning but have they put their numbers out there?

we also get around 15-20mill for finishing second in the prem.

£21.5m to be precise.

Topdawg wrote:You could argue a bit on the numbers here and there.

Would we get £10M from the extra seats or £8M???
Are we getting £15M or £16M from the academy sponsorship???

Whatever the exact numbers, we will be getting money that we weren't getting in years gone by. That's brand new money which we can spend.

If the journos came out and said why we've only got a bit to spend then we can discuss their reasoning but have they put their numbers out there?

Yeah, I get that....but so far, with the summer approaching and the window opening on 1st July, where are these sponsors? "Show me the money!"....

The money for the extra seats won't surely be counted until next year- so there's £24m we haven't seen yet.

This is what I mean - we're banding around figures that were posted in articles back in January....but so far, we haven't seen any concrete evidence of:

New Academy stadium sponsors

New Nike deal

New Etihad deal

New stadium gate receipts

nor have we sold any players yet to bring in money for further transfers. We've been linked with nearly £500m worth of players in the media, but as of yet, the only guarantee is the TV money and £21.5m for finishing 2nd in the PL.

Forget the £21.5M for finishing 2nd as I'm not counting it as 'new' money. I'm only interested in new money.

New gate receipts - well, we've already sold all the new seasoncards and the waiting list is over 10,000 now. How much we actually get can be debated, but it will be several million.

New sponsors for the academy. Well, we've already got the arch sponsored so there must be something there.

The BT money, that's safe. That's £15M on it's own.

I haven't got the time to trawl through all the new sponsorship deals we've signed over the last 12 months, but that is new money too.

We've already sold Sinclair for £2.5M!!!

Money will come in, we just don't know how much. 

I'm standing by my comment that we can easily spend £250M this summer if we wanted to.

surely it is new money dawg as we didn't have it on Wednesday before the arsenal game????

What I mean is, a new source of money.

If we are at break even, then the money we got for winning the league last year was spent on wages and other expenditure.

To have more money to spend this year, we need to earn more money. ie new sources of income or increase income from existing sources.

That's why I've focused on new sponsors, new seats and increasing current deals.

Even if nothing comes off, I can't see us having less than £50M of new income which means we could spend 5 times that amount on players.

Trust me on this!

One day I'll ring in and ask them to 'show me the numbers'.

If you aren't convinced, why not ask Melton or Ripleyscat to see what they think we have to spend. It would be interesting to know what they think.

Your not getting me Dawg.....I read Melton's posts - and I'm hopeful he is correct, as you are, but none of you work for MCFC accountancy department, so it's all speculation at this point.

I really cannot, under any circumstances, see us spending anywhere near £200m this summer on players.

I'd would suggest on the figures you've posted, IF we sell/release 4 or 5 players for approx £50m....then we MAY spend £100-120m tops.

I've got a feeling that the Directors think we only need 2, maybe 3 more players in.....which wouldn't surprise me in the least, knowing we really need 5/6 players.

You don't need to work for the City accountancy department to be able to figure a few numbers out to some extent.

I've always started on the basis that we are currently break even for FFP. It's very straightforward. As long as get the same 'old' money again, and are expenses are similar to last year, we can spend £250M if we want to.

We might only part with £50M in cash terms, with the rest paid in instalments. We don't have to part with £250M to buy these players, just the commitment to make the payments.

Fair enough.....I'll re-phrase it.

I cannot see us buying £250m or anywhere near that sum, on players.
Hope I'm wrong though.

Ah, that's different.

We can easily afford to in my opinion but I can see us with the same short termism that we had when we won the league for the first time. 

Buying Bs and Cs isn't anywhere near good enough. If we can't buy the A++ players, we need to be getting at least A class players and some B+ with potential.