Vital Football

Latest Newcastle United News

Ash ready to splash the cash?

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?

Win FREE pizza with Vital Football!
Select your team and get 50% off if they score twice.
www.papajohns.co.uk/football



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

Writer:TNMW with help.
Date:Wednesday July 18 2012
Time: 3:54PM

Best of Vital Network

Comments

0
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
18/07/2012 17:04:00
0
Interesting reading however anything NUFC do is bound to be contrary to popular convention. We will see eh.
Birdys
18/07/2012 21:20:00
Page 1/1
  1. 1

Login to post a comment

Recent Newcastle United Articles

Benitez Expecting Tough Palace Clash

Manager Rafa Benitez has said he's expecting a tough clash when we face Crystal Palace this weekend, but he wants Newcastle to focus on their own energies and strengths...

With Mind Games Aimed At NUFC Comes Hope.

Hope for a Benitez stay above all else.

Vital Pre-Match - Newcastle v Crystal Palace

A draw against Liverpool was certainly a point gained than points lost as at half time at Anfield we were dead and buried. Alan Pardew's Crystal Palace must be beaten though!

Well, We Aren't Top Of The Injury List At Least

Our weekly update looking at the injury table for Newcastle United and also comparing with all our competitors in the Premier League.

Archived TOTT Articles

TOTT articles from

Site Journalists

Ken Waugh
no email
Profile
TNMW
Editor email
Profile
Ian Smith
no email
Profile
Rexn
no email
Profile
BowburnMag
no email
Profile

Current Poll (see more polls)

Newcastle v Crystal Palace
Suggested By:
Newcastle win72%
Crystal Palace win28%
Draw0%
ScoopDragon Premier League Network Sites

League Table

# Team P W D L Pts. GD
1 Leicester City 35 22 10 3 76 30
2 Spurs 35 19 12 4 69 39
3 Man City 35 19 7 9 64 32
4 Arsenal 35 18 10 7 64 24
5 Man Utd 34 17 8 9 59 12
6 West Ham 34 14 14 6 56 14
7 Liverpool 34 15 10 9 55 13
8 Southampton 35 15 9 11 54 12
9 Chelsea 34 12 11 11 47 7
10 Stoke 35 13 8 14 47 -14
11 Everton 34 9 14 11 41 5
12 Watford 34 11 8 15 41 -7
13 WBA 35 10 11 14 41 -11
14 AFC Bournemouth 35 11 8 16 41 -19
15 Swansea 35 10 10 15 40 -15
16 Crystal Palace 35 10 9 16 39 -9
17 Sunderland 34 7 10 17 31 -18
18 Norwich 34 8 7 19 31 -25
19 Newcastle 35 7 9 19 30 -26
R Aston Villa 35 3 7 25 16 -44
Latest F1 News
Latest Vital Boxing News

Recent Newcastle United Results (view all)

Newcastle United Fixtures (view all)

Apr 30 2016 3:00PM : Crystal Palace (H)
Barclays Premier League
May 7 2016 3:00PM : Aston Villa (a)
Barclays Premier League
May 15 2016 3:00PM : Tottenham Hotspur (H)
Barclays Premier League

Vital Members League Table

RankNamePoints
1.Toon_NoMatterWot163
2.BLACKBOB135
3.billybobcat76
4.Mcnamee6754
5.keggy_keagal51
6.PieMag42
7.daftladguy26
8.vin189226
9.Rytoon25
10.Bruce6823