Transfer Rumours 2016/17 City Transfer Thread
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See post [HASHTAG]#7122[/HASHTAG] about signing players who think they are doing you a favour
Why would I say that?
The only reason Canada and I ended up in an argument was because he was being deliberately contrary and spouting rubbish like "buying the corporate veil". You came in and agreed if the Chinese and Allams were setting transfer fees together there was no valuation issue and that was the end of it.
You also said that buying a player doesn't change the valuation of a club because of accounting reasons - ie. the debits equal the credits.
I said it doesn't change the value of the club when the parties that have agreed the value are part of the valuation of the players because of accounting reasons. I initially didn't include that qualification as I thought everyone was aware the Dais were involved in the process, but pointed it out when Canada appeared to be in the dark.
It doesn't as long as both party's agree the players worth, you change £10m cash reserve for a £10m asset or vice versa so the value of the club remains the same.
You explained it by the cost of the transfer being an increase in asset and the bank payment (reduction in bank) or on credit (increase in creditor). This would have no net effect on the balance sheet. This would ignore any concept of whether the player was worth the transfer fee and wages.
Separately, and later, did we discuss whether the new and old owners would both agree on the players. This would have no relevance on the valuation of the club though.
Exactly. It's incredibly straight forward but some see my name and feel the urge to be contrary.
Well it does considering the valuation set by the new owners is all that matters when it comes to valuing the club for their takeover.
The discussion centred around player purchases altering the value the Chinese would pay. If they're setting the value of the players and not taking out further debt or equity to finance the purchases the value of the club with respect to the takeover doesn't change. FACT
You are confusing the accounting with true value. If a club buys Alex Bruce for £100m then in the accounts the player asset would increase by £100m and cash would reduce by £100m (assume cash deal) so the net balance sheet stays the same. But would anybody think £100m going out of the club bank account is the same as the advantage of getting Alex Bruce?
I have an on-going thing with the Scousers and "net spend", they like to think they have only spent a little money because they have sold some players, they cant understand those players were assets.
If new owners value Bruce at 100m, and pay 100m for him, does their value of the club change?
You're taking the very naive option of believing that valuation theory is am objective science, and that an entities value isn't purely the price the purchasers pay.
The deal is a different matter to the reality of the valuation.Well it does considering the valuation set by the new owners is all that matters when it comes to valuing the club for their takeover.
The discussion centred around player purchases altering the value the Chinese would pay. If they're setting the value of the players and not taking out further debt or equity to finance the purchases the value of the club with respect to the takeover doesn't change. FACT
No I wasn't, and you're now arguing for the sake of it. Even in your own example you state the club has paid 100m for someone them questioned who would value him at that.. Hint: it's the people who just paid that much for him.