UK time is: 12:30:55
Vital Login
Social Login

Choose your club

Other Sites

Network Navigation

Vital Partners

'If It's Football, It's Vital'

Ash ready to splash the cash?

The list of players linked with a transfer to NUFC is getting longer by the day, some will be true, some wont and some just a smokescreen designed to put other clubs off the scent of a cherished signature. What isn't a smokescreen though is the Financial Fair Play rules or FFP for short. To cut a long explanation short, we basically have to meet various criteria with the main one being that a club has to break even within a set number of years from last season 2011/12(3 i think) and to live within it's means. Those that are familiar with ToTT will know that we run various articles on finances from time to time and we've been proven over the years to know what we're on about in a nutshell with the latest ramblings being based on how much money can we possibly spend to abide by these FFP guidelines. To the 'untrained' supporter, it's not just a case of selling a player for 35 million and then balancing it out over the next few years, it actually goes into complex detail of how or when it was done, what the wages were and for how long. For example: There can be two aspects to it, (A) what does the club need to do to stay within it's limits? and (B) what does Mike Ashley have to do to keep his tax bill down?.

A key thing to remember is that player's contracts are amortised over the life of their contract, therefore a Summer spend of 33.5m would work out at 6.61m per season assuming 5 year contracts or about 8.2m if 4 year contracts were given. Next, when a player is sold, the difference between their book value and transfer fee is counted as profit in that year, so Leon Best, say cost 1m with a 4 year contract. After 2 years, book value is 500k. He's then sold to Blackburn for 3m, which gives 2.5m profit. If Danny Simpson gets sold and the net effect on profit is that the club is looking good. Too much profit affects the tax bill and after last season's TV revenues, prize money etc, Ashley has to buy players or pay the taxman. As long as he keeps selling players without making a loss, it is in his interest to churn the squad.The other aspect is that if he wants to sell the club, he will want it to look profitable so won't mind taking the short term tax hit.

As i said, a complex scenario but one that doesn't necessarily mean we will sell big players to accommodate new ones. It may be better financially to splash the cash this year as weird as it sounds, now wouldn't that be a statement of intent?




Use your social login to comment on front page articles. Login using you Facebook, Twitter, Google or LinkedIn accounts and have your say!



Click here to join in the debate on the club forum.

The Journalist

Writer: TNMW with help. Mail feedback, articles or suggestions

Date:Wednesday July 18 2012

Time: 3:54PM

Your Comments

A pithy summary of our current position. knowing Ashley though he might be prepared to pay the tax man simply to ***** off the support further. The big fat childish baby still hasn't gotten over us calling him nasty names.
oldleazes
Interesting reading however anything NUFC do is bound to be contrary to popular convention. We will see eh.
Birdys
 

Have Your Say

Log in...
with your social network     OR     with your Vital account

Recent Newcastle United Articles

Mbiwa Allowed To Go Despite Shortage (Monday September 1 2014)

Transfer Deadline Day Live Blog (Monday September 1 2014)

Having Watched..... (Sunday August 31 2014)

NUFC v Crystal Palace Match Analysis (Saturday August 30 2014)

Call Ups Cause Commotion (Thursday August 28 2014)

Ignore Loic Remy Talk (Thursday August 28 2014)

NUFC Cup Date At The Palace (Wednesday August 27 2014)

A Win But Must Do Better (Wednesday August 27 2014)

Ben Arfa Back But For How Long? (Monday August 25 2014)

Archived Newcastle United Articles

List All TOTT Articles
Have your say
Click here to suggest an article
Click here to suggest a poll

Vital Members League (view all)

1. Rexn 35
2. Boomboomcheiktheroom 27
3. billybobcat 25
4. Finn_the_Dog 20
5. thecorner 18
6. The Owl 16
7. OldLeazes 14
8. officemonkey 12
9. kevinpie 8
10. Sir Laz 8

League Results (view all)

Latest Results
Newcastle 3 - 3 Crystal Palace
Aston Villa 0 - 0 Newcastle
Newcastle 0 - 2 Man City

League Table (view table)

Team P W D L GD Pts
13. Sunderland 3 0 2 1 -1 2
14. Man Utd 3 0 2 1 -1 2
15. Leicester City 3 0 2 1 -2 2
16. Newcastle 3 0 2 1 -2 2
17. Everton 3 0 2 1 -3 2
18. WBA 3 0 2 1 -3 2
19. Crystal Palace 3 0 1 2 -3 1

Breaking League News

No Signings, But Keeping Bony Feels Like One
Swansea : 02/09/2014 12:11:00
Welbeck Closes Arsenal's Transfer Window
Arsenal : 02/09/2014 10:24:00
Cleverley Stay`s
Man Utd : 02/09/2014 10:04:00
Amalfitano Joins
West Ham : 02/09/2014 10:02:00
Diame's Gone
West Ham : 02/09/2014 10:01:00

Current Site Poll (view all polls)

Where do you think NUFC will finish this season?
Suggested By:  Talk of the Tyne
Top 3%
Top 4 5%
Europa league places 28%
Mid table 54%
Relegated 10%