...for all the completed transfers & the speculated transfers on these multiple threads ? I thought I'd read somewhere that the Allams were down to the bottom of their money pit ? Is there a secret source of funds behind all of this ? How much have we spent so far in this window ? What's likely to be available on top of funds from Long & potential Boyd sales ? Waggy, Houghton & Butler, our last multi flurry of signings in one season cost 120,000 quid. We've experienced massive inflation since, but this current window seems surreal.
Yeh - I'm discounting the reckless Duffen era spending because I'm sure the Allams said they were going to run their gig as a "prudent" business, unlike the profligate era the last time we were in the premier league, but all this seems counter-intuitive to that philosophy. Is this a serious gamble to keep us up because someone other than the Allams have seen a gravy train ?
Maybe the Allams are chucking more money in, it's not like they're broke, didn't they just announce a profit again? I don't think they'd sanction stuff if they couldn't afford it.
With the way prices for players are increasing they are probably taking out loans and sanctioning money for purchases in order to sell them for a profit.
I am no expert but I am guessing that the 66,000,000 pounds we received from finishing 16th place last year from TV rights alone is fuelling the spending spree. The additional income from the TV rights enables us to go out in the market and pay silly money for players and equal sillier wages. I am assuming we don't pay everything up front, we put down collateral (a deposit) and then pay the rest in installments. As long as we can sell some of the players along the way for more than we paid for them we are doing ok e.g selling Long for 6 million more than we paid for him. Sometimes it goes wrong a la Nick Proschwitz but then you compensate with the likes of selling a George Boyd. All seems like a bit of a dangerous shell game to me but then I am no expert I only worked for Enron for 5 years.
If the club wants to stay in the Premier League they have to remain competitive. Most of the clubs accept that with only a few clubs trying to limit transfer fees and wages - Burnley & Crystal Palace. If the club gets relegated it will be a disaster financially. If they achieve mid table for even a season the Allam's are more likely to get their money back.
Tv prize money etc, if I recall grossed approx 75 million for 10th place last year. I forget Allams debt - but wasn't it close to 60 mill. I suppose it may take a couple of years to recoup all of their debt after expenses (if they ever wanted to do that) but that would limit the expenditure on new players. As you say - relegation too soon would be crippling - so I think maybe they have an outside source ( cash or guaranteed loans) from a non-banking related investor as I doubt the Allams would want to throw any of their own money ( collateralized or not) at a tricky business proposition - i.e. having to keep a yet-to-be established team in the top league.
One thing is for sure - Mr Allam's 'bean-counters' know what they are doing. What to us may appear madness will be method to them.
As petersaxton suggests, it'd be death for us(City) if we are relegated in the next 2 years unless their method is sound, which in my mind is quite tricky for a non-established (meaning attractive to progressively higher calibre players) team.
We have also sold quite a few players our squad is smaller then last year.. with money coming in from transfer not just going out i bet we have spent net 25 mill by the time the window closes so the tv money will cober this and wages very comfortably
I'm probably wrong, but I don't think the money exists in a way ours does when we go to the shops. Like a global economy, it'll be a fiat currency which is based on a promise. Even then the payments are staged. My guess (and it's all it is) is it goes something like, we agree a price for a player, the club get security for the amount from Allamhouse, and pay them interest. The selling club get a promise from us to pay x amount in staged payments over x years. This is as good as cash (provided others have confidence in it) and the selling club use this promise to buy players. We'll be doing the same with using the 'promise' of the money from Long and Boyd to buy some of our new players. As long as everyone doesn't need their money all at once, the club are only committed to a minimal amount at any one time and the company taking the security risk pay nothing out, but collect the interest. As I say, I could well be miles off.
I meant Boyd. Corrected so people don't get distracted from the point. I'd be interested to know if it's anywhere near.
You're certainly right to a point, much of this is credit guarantees/staged payments, so the we don't have to find actual cash for all these deals, but it's still a risky strategy. If we get relegated, it all starts to unravel and we'd have to start converting a load of these deals back into cash(though that's probably true of most clubs).
If the worse did come to the worse and we had to find the capital, would the onus fall on the company securing the loan, or could that company push for assets from the Club? The who owns what bits there has implications, especially for what could have been written into an agreement between the companies.
The problem here is not the clubs debts as they are owed to one person/company (not banks) and therefore the risk of the loans being called in are negligible. If I were the Allams I would be more concerned about the spending if we were to be relegated, as Allamhouse has a huge part of it's value now tied up in Hull City & relegation might mean we defaulted on those loans, with Allamhouse then taking a huge hit !! Our entire playing squad if sold would probably only repay 25% of the debt owed to them, and even if they then took 100% of parachute payments unless player salaries were paid the FA would withhold future monies
Unless the Council could step in and offer a deal on an asset that would save the football club and stop it taking the rugby club with it?
