Should wages be coming out of the £35?

Just a thought. Surely the wages freed up by Kuqi, Campbell, Ireland, Carroll and Nolan leaving should cover the wages of the 4 new lads and maybe a bit more on top. There's no doubt others will be leaving as well; Enrique, Ranger, Routledge, Best, Barton, Perch (god forbid) and Forster are all possibilities.I understand things like agent fees going out of the £35 million but surely Pardew must be able to use up the wages that he has freed up using player sales before it starts coming out of the Andy Carroll money?

What do you think?

EDIT: Just realised I forgot to put 'million' in the title . I can assure you we have more than £35 going into the club (well at least I hope so).

 

No, thought wages and transfer fees were kept secret.

 

You'd think that wouldn't you + you'd also think Pards would get a normal transfer budget plus the 35 mil. Would we have not had a budget if we didn't sell Carroll?

 

If any of them are willing to play for £35 i've got no problem with that (yes i saw the edit)


Well in my opinion NO. Signing on fees/agent fees i have no problem with however if Ashley wants to make the club break even then we shouldn't need to be selling players to pay for the wages. That said i suppose it does mean that less of the money we generate in the next couple of years will have to spent on wages.
In fact if we paid off the players entire 5 year contracts now we'd be fine for the financial rules (nobody tell Man City)

 

Im guessing the clubs revenue is currently not enough to cover the massive wages so moneys being put aside for new wages.

What I dont understand is what about the rest of the money earned at the end of the season for league position and TV rights, surely the clibs expenses aren't so large that none of that money could be used for transfers.

 

Where else are they going to be coming from and we will no doubt be investing a lot more than £35m in the club.

Sponsorship Money
TV Revenue
Season Ticket Sales
General Ticket Sales
Merchandise Sales
Potential Prize money
Player Sales

EDIT: All means of income that can be used to pay debts or re-invest! Remember that we are still reducing massive debts and that fans need to get a real perspective of how much football clubs cost to run nowadays and how an actual transfer of a player works. There's all sorts of legal fees and agents fees. Demba Ba and Marveaux have cost Newcastle in excess of £8-£10m (not including wages each week of around £115k for next few years. Cabaye cost Newcastle an initial fee of £4.3m and then around £4m in agent, admin and legal fees. (Again not including his £45k each week)

 

Maybe thats going on the debt we owe Ashley due to the Fair play rules not allowing us to take 0% loans from owners. (ask DT)

 

Exactly, paying these debts now will only benefit us in the future...

 

Had a ****ing awful nightmare last night that Tiote went to Chelski for £28m and Ashley then cashed in and ****ed off. The more I've thought about it... It's a tempting thought though...

 

I couldn't careless if we didn't actually spend any money on "transfer fees" themselves as long as the players we do sign are of the same ilk of what we have signed so far.

 

Haha ... good plan TLG but unfortunately it wouldn't work. Wages are a profit and loss expense and have to be shown in the correct accounting period. Even if you paid them up front you would then have to show the transaction as a prepaid expense (debtor) on your balance sheet and accrue an equal proportion of the expense back each year, effectively putting you back where you started. Sorry to get all accounting on you!

As for whether the £35m should be spent on wages. That will come down to the clubs projected income figures for the upcoming years. One thing we have to take into account is that when you buy a player (for example £12m on a four year deal) you have to spread the cost of buying the player over length of his contract for accounting purposes (even if you actually paid the £12m in one up front payment). That means for the purposes of the profit and loss, and therefore also the fairplay break even calculation you have to know that you can cover an expense of £3m in each of your next four accounting years.

There is a possibility that if we spent the whole £35m on player transfers the club may not be able to finance these annual expenses (posted as depreciation btw) and therefore when they say that some of the money is going to be spent on wages what they really mean is that we cannot afford to spend it all on players transfers. Instead that which isn't spent in this way will become part of the working capital of the club used to pay expenses (of which wages are the main part).

Hope that made sense and sorry for being boring!

 

And just to get this milestone out of the way....500th post

it's quality not quantity, anyone can type 3000 posts of complete and utter ****e like Tash ... lol

 

Like GRB said, I posted some info on a thread a few weeks ago about the fact that the fairplay rules state that we would not be able to benefit from interest free loans from MA and would have to build in a suitable interest expense back into the break even calculation. As interest rates are the lowest they have been in 80 odd years it would be to our benefit to pay as much of these loans off now, whilst the charge would be cheaper than to sit on these loans and end up with an increased expense down the line.

I actually think that if some of the £35m was spent on this it would make very good sense.

Saying that we still need another striker or two and a backup LB so I certainly don't want too much of it being used sensibly!

 

Dam, i forgot that there's someone on here who actually knows the rules

 

Haha ... no worries! Don't tell the Mackems though ... I bet they don't know the rules!

 

Of course but why break the bank just for the sake of breaking it. We've done excellently so far in the transfer market, keeping our spending to what is basically an absolute minimum. I'm happy if we get at least 1 quality striker and LB cover. Another quality midfielder and another decent striker would be brilliant business. Obviously the latter is dependant on outgoings I would have thought!

 

I agree totally! The important thinkg is to get the players we need, but if we can do it spending as little of the £35m as we can then I am all for it.

We are entering a new financial world as a club and I am totally behind the club's sensible approach to the finances in regard to the fifa fairplay regs. I am actually looking at the spending patterns of other clubs and shaking my head in bemusement. Man City's attempt to push through the £400m sponsorship endorsement from an obviously related party, which is in absolute breach of the regs, is an example of the act of desperation that many clubs are going to try and push through. They cannot argue that the sum paid passes any sort of "arms length" or "fair value" test.

But MA despite his fan management faults appears to be doing everything right and I am very hopeful that we will come out of this well placed.

 

I just realised my last post read as if I was saying you thought we should be spending big. I just quoted you because I agreed with your comments ... lol.

Some, if not most, NUFC fans are obsessed with the "£35m" as are the media and Sunderland fans ... lol. Like we both seems to agree on. I'd don't care how much we spend and don't care how much money MA is making out of me or pocketing for himself as long as he continues to sanction the signing of players the same quality as the lastest few. Although I hate Ashley the man, you really can't fault Ashley the businessman!

 

Also, any idea whether this has been sanctioned by FIFA. Surely they will see what the rest of the world has seen already and stop this "deal" from happening!

 

I agree with the sentiment completely, but the fact is there isn't an infinite number of cheap players that perform. There are bargains, and if we can get them, go for them. But, good players cost money. It's no coincidence that the biggest spenders occupy the highest places. It would be nice to live in a world where everything falls into place perfectly, but there isn't one