What part of they were self sustaining between 2014-18 are you struggling with? Yes, they filed a large loss in 2019, but given their transfer dealings and squad reduction since, they’ll show a handsome profit when the 2020 accounts, which cover the period to the end of June, are released at the year end. A profit that I’ll wager will see them ending the 6 year period as either completely or very close to zero losses. Feel free to bookmark. Everton’s ownership has absolutely nothing to do with this conversation btw.
How can you say "zero losses" when there's also £250m of debt though? Whether that £250m is turned to equity is irrelevant, they still needed that money.
That £250m hasn’t all been accrued during that period. He chose to cover off circa £60m of last years operating loss. If this year’s operating profit is circa or greater than last years operating loss, then they’ll have been self sustaining for 6 years on an operational level. The issue here is you don’t understand the difference between a P&L and a balance sheet, we’ve been here before.
Firstly you are ignoring that if it wasn't for their sugar daddy they would be paying fees and interest to service the loans they would need to operate as they do. Secondly not making a loss in 6 years is meaningless if you happened to be given a quarter of a billion pounds just before those 6 years. Any business can manage that.
From what I've read and I'm learning as I go, it's clubs with owners like Roman that could be in trouble. One owner putting in huge amounts as loans - and I don't know whether he's done what Moshiri has done and converted the loans to equity, I've read nothing that's suggested he's done that - that could be called in at any time, could face financial collapse. If Chelsea's net worth is minus £688m ( according to their last accounts) who would he get to buy it while the books are in such shape?
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Moshiri hasn’t converted the loans to equity yet. As he’s not yet the sole shareholder, it’s sat on the BS as a directors loan. With the greatest of respect, you’re not grasping it. The value of the club isn’t defined by its current balance sheet position. As the current balance sheet merely reflects the amount of cash that Abramovich has chosen to lob at it since the day he arrived. The club is currently operating at a break even position, and it’s value is based on a whole host of factors in the barmy world of football, which bares little resemblance to how a ‘normal’ business is valued, which is generally PBIT multiplied a factor of X, plus asset value, minus any net debt. I’ve already explained why calling in that debt would be counter productive, as a Director you’d only ever draw your loan (or part of) back out, if the business was in a position to stand it. Otherwise you’d be devaluing your own asset. Seems I massively under valued it btw, as the latest Forbes valuation has it at circa £2BN. So his investment is currently showing a potential decent return. https://en.m.wikipedia.org/wiki/Forbes'_list_of_the_most_valuable_football_clubs
Makes me laugh people say might not get game time etc. Yet at same time moan that if one gets injured we have no one to play there. It’s a squad game and 60 games a season. Given Salah and mane can both play central any wide player would get a lot of games. As we’ve said, 1 injury and could be first choice straight away for 6 months. You look at city and I know can’t compare squads but they have mahrez Bernardo silva sterling Aguero Jesus foden all competing for 3 spaces. Don’t see any complaints with their players because they get rotated around.
I'll be honest, I have only the basic grasp of football finances, and about as much interest. I know you've said before about Chelsea being self financing but it wasn't that long ago they hoovered up alot of talent for serious money. I feel you ignore this massive outlay when talking about recent years when they've started to sell. I suppose its difficult in footballing terms, the past2 or 3 years doesn't really tell the tale when talking about income and expenditure. But again, im not massively arsed
As I said I'm learning as I go. I get financial information from the Swiss Ramble which is an excellent source. He has no vested interest, just presents the facts. If he says the finances aren't as cut and dried as they appear ie. - self sustaining, then that makes me think there may be cause for concern for the club in the future. The bit about Moshiri was in the same Swiss Ramble article. He said the Moshiri loan is treated by the club as equity.because it's a 'friendly' shareholders loan with no specified repayment date. Even if I don't understand any of it, I trust that he does. Honestly, it all means very little to me
I’ve never read his pieces so can’t comment mate. My view here is my own, based on reading their accounts submissions to Companies house. My interest was piqued a couple of years ago, when I saw a comment somewhere about them being self sustaining. Tbh I didn’t believe it, so went and read the numbers for myself. I find the business side of football interesting due to my profession and the fact that I’m a nerd. I know some find it as dull as dishwater, and understand why, as unless it’s your bag, it probably is lol. Your man answered your own question btw. As yes, *Moshiri’s* loans are treated as equity, due to no loan repayment schedule. But treated as, and being, aren’t the same thing. He could effectively call those loans in, as you suggested Abramovich could. But he won’t and neither will RA as it’d be economically illiterate.
I think if signing him is a option then we should snap him up. Could be a start for the next decade. He and Trent could a formidable medium cog on that right hand side for that entire decade too!
Anyone think Jimenez at Wolves wants a bigger wage. First Barca, then us and now its ManU, got all the hallmarks of an agent trying to get an older player a big pay day before his market value drops.
Football finance makes my head wobble tbh.....Reality is that if the owner converts debt to equity, he’s pretty much writing off the debt....So there’s debt, usually leveraged against your asset ...then there’s owner debt. We’ve seen the former with Hicks and Gillette....and it nearly ruined us. The latter is completely different. You can’t compare the two, when one can be effectively written off. Lucky Chelsea really; if they were servicing the debt that they had incurred getting to the top, they would have a different balance sheet today.
