UK time is: 03:04:58
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

Pardew Confident Of Aarons Signature (Friday December 19 2014)

NUFC Fixture Changes For TV (Friday December 19 2014)

NUFC Influence Growing At Rangers (Friday December 19 2014)

Newcastle Upon Clyde (Friday December 19 2014)

Pardew - We Can't Let The Fans Down Again (Thursday December 18 2014)

Alnwick Picks Up Shoulder Injury? (Thursday December 18 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. Toon_NoMatterWot 265
2. PieMag 126
3. BLACKBOB 27 100
4. OldLeazes 80
5. thecorner 73
6. Mcnamee67 64
7. kevinpie 60
8. officemonkey 60
9. vin1892 56
10. Bruce68 51

League Results (view all)

Latest Results
Arsenal 4 - 1 Newcastle
Newcastle 2 - 1 Chelsea
Burnley 1 - 1 Newcastle
West Ham 1 - 0 Newcastle
Newcastle 1 - 0 Q.P.R.
WBA 0 - 2 Newcastle

League Table (view table)

Team P W D L GD Pts
5. Southampton 16 8 2 6 12 26
6. Arsenal 16 7 5 4 9 26
7. Spurs 16 7 3 6 -2 24
8. Newcastle 16 6 5 5 -4 23
9. Swansea 16 6 4 6 2 22
10. Everton 16 5 6 5 3 21
11. Liverpool 16 6 3 7 -3 21

Breaking League News

Team News: City v Crystal Palace
» Man City : 19/12/2014 19:57:00
Pellegrini Confident Milner Will Stay
» Man City : 19/12/2014 19:54:00
Team News: Hull v Swansea
» Hull City : 19/12/2014 19:37:00
Dawson Out For Five-Weeks
» Hull City : 19/12/2014 19:36:00
More Than Arfa Chance Hatem Will Leave
» Hull City : 19/12/2014 19:35:00

Current Site Poll (view all polls)

Spurs MotM
Suggested By:  Site Staff
Alnwick 34%
Coloccini 0%
Williamson 0%
Haidara 0%
Dummett 0%
Colback 66%
Cabella 0%
Gouffran 0%
Pérez 0%
Sissoko 0%
Riviere 0%
Sub:-Armstrong 0%
Sub:-Anita 0%
Sub:-Vuckic 0%