Bye bye Tiote!

Ffs.... People said stuff like that over colo remember!

 

I don't understand your point. We still made a loss of £4m. Factoring in amortization is a normal part of formulating the accounts. And what does the part about including total contracted wages in their transfer values have to do with the accounts? Isn't that just their way of making it look like they've spent far more than they actually have on players - "we got 35m for Carroll, but have spent 30m (because we are going to include the new players' entire wages in that figure." It's just a ploy, not accounting practice.

Now don't get me wrong, the figures are a substantial improvement, but the fact that we still can't turn a profit clearly indicates that incoming transfers will be limited, and any decent offers will see players leaving (and a decent offer for Tiote is a lot less than £25m), though that doesn't really matter as long as the money stays in the club and we do well in the transfer market.

And yes, Tiote is a defensive midfielder, but that doesn't mean you don't have to expect a few assists and goals from him - the team is lacking just that from pretty much all the midfielders.

 

Rightly.

 

Sorry if already mentioned but Tiote on twitter a couple of days ago: "@CheikTiote24: I won't move club I love this one".

 

It's been mentioned but it's the kind of thing we like to hear over and over again to reassure us.

 

Didn't think he was on twitter.

 

My point is the facts and figures are based on concrete numbers, money incoming and outgoing.
Then Amortization is added to the equation. Like I say, I don't know how it works from a numbers point of view but to me its a fictional amount.
Like their previous amortization would never have valued Carroll at 35M.
Its a minefield.
Say for instance Cabaye is on 30k a week over a 5 year contract; thats 7.8m. Is that his value? Next year will his value drop by 1.56m? Does he have a term in his contract saying he gets a years pay if we sell him before the 5 years is up so is his value 1.56m + a fifth of his transfer cost for every year he has left? It can't be based on the cost of a replacement because Carroll would only have been sold for 10m or so.
Without amortization we made a clear profit which suggests this year we stand to make profit.
The wages ploy could have gone into their accounts. For that financial period we spend 60% of our income on wages and we spent 30m on players including wages, so has part of that wage been double counted (ie Cabayes 1.56m)?
Now with regards to Tiote we don't need to sell him for £8m to Villa.
He doesn't want to leave so won't force a move to a level team like Everton.
If we sell him it's going to be to a European contender who can afford to double or triple his wages. If they're paying 60-90k a week to turn his head then, having a 5 year contract means we can ask for silly money.
It's not like Enrique who was probably worth 9-12m or Given who was worth more in a time when we needed the cash. We don't need to sell a key player and weaken an area of the team for a fee which will only bring in a replacement who is unproven. We sell him for a fee which will bring in two or three players and their wages.

 

Hes had one for a while but hardly uses it, and when he does he hardly says anything. Because be doesn't need too I guess

 

They capitalize the costs associated with signing players into fixed intangible assets and then that is amortized equally over the period of their contracts.

 

That twitter post is good news. As Llambias alluded to, the main problem comes when players and agents ask for too much. Maybe if Cheik has a proper affinity with the club and its fans, he'll keep his agent in check and his demands realistic. Maybe he'll be happy with the 6 year deal he's signed. Maybe his agent is a decent bloke and won't feel the need for him to move. Ok the last one is getting a bit carried away!

 

Tiote doesn't have a Twitter account, Twitter has a Tiote account

 

In all seriousness does he have a twitter account? And did he post that? This is why I hate Twitter, its a crock of ****e, there's loads of fake accounts.

 

If we sell Tiote I'm going to think there is never going to be any glory days at this club.

 

Which is fine for accounting purposes but has no relation to reality. Tiote would be entered into the books at £3.5 million, of which 40% would be amortized by now, giving him a book value of about £2.2 Million. He is worth £10 million plus. How much plus is a matter of debate. The same is true of Cabaye: he will have been entered at £5 million and amortized down to £4 million. He is worth at least £8 million.

I've no complaint about the use of standard accounting practice to reduce profit and therefore tax, but it does understate the clubs position

 

You're joking, right? The book value is based on something concrete. So what if you think that Tiote is worth £10m or a £100m - it doesn't make any difference because you are just arbitrarily assigning a value to him - that isn't the basis of accurate accounting.

 

No, I'm not joking.

Generally Accepte Accounting Practice allows for assets to be recorded at book or by valuation. Book value is widely used but produces wholly articial results. Land, for example, is often recorded for decades at the price for which it was purchased despite having increased in value many times over.

The club could commission a valuation of its player assets and obtain a more realistic view of the extent to which they had depreciated/appreciated. Clearly they would want someone more qualified than me to perform the valuation. The valuation of players, as with most assets, would be far from a preciase science. The result would still be much more accurate than the use of book values.

The club wishes to use book values probably because doing so shows a loss and therefore no liability for taz. Well and good. It doesn't make the figures an accurate reflection of the club's finances.

 

But a player could be injured at any time or see a massive collapse in his form and subsequent value, and anyway simply valuing a player is next to impossible - it just isn't a basis for evaluating a club's financial position - the player's value or lack there of will be realized if or when the player is sold otherwise you'd have the likes of Freddie Shepherd conjuring up all sorts of financial bull****.

 

Put it this way. If an investor was consideirng purchasing the club, he would perform a valuation based assessment of the value of the players, not a book value exercise.

Ba has no book value. Ba is valuable. How valuable is a matter of debate, esp[ecially as his knee is suspect, but any valuation of the club's assets would place a value on him.

Book value is no more objective or concrete an approach to placing a value of assets than any other. It starts with a historical fact (this player was purchased for £x) but then places a very rarely valid assumption on those facts (player's value only decreases and never increases: moreover, it decreases at a straight line rate).

The reality is that £13 million more came in than went out. The rest is a choice between hypotheses

 

No, one approach is based on known facts the other is based on conjecture. And your point seems more relevant to a buyer assessing the overall value of the company rather than the accounts (profit/loss) for any given year.

 

No, both are based on conjecture.

The book value conjecture (or hypothesis) is that player's value only eveer decreeases, and that it decreases at a steady rate.

The individual valuation conjecture is that an expert valuer is capable of assessing a plaer's market value.

The first hypothesis is clearly wrong. The second one is sometimes wrong