I feel sometimes like I'm beating a dead Jacka s s

[Peter R]

LOL

I am an amateur accountant, I have no shingle but I do have some understanding of accounting generally. An ongoing discussion has been taking place where I have been trying to explain certain concepts in accounting which may or may not apply to football.

Here's the thing, I don't think my posts have been anti nor pro anyone, but merely by way of explanation of concepts so that the "valuation" discussions can move forward.

SO here goes for those who are interested. I found an article which I have not fully read, which deals with "Accounting for soccer players.."

A couple of pieces of information:

1. It would appear that football players are treated as INTANGIBLE assets. FYI if the intangible asset has a finite life it can be amortized. (Amortization in this case is synonymous with depreciation).

2. I will copy this excerpt here from the article. It responds to those who think contracts are not depreciated/amortized/written down:

As an intangible asset, the license to use the player paid through the transfer fee needs to be gradually written off. In this case, the write-off will be carried out throughout the economic lifespan of the asset (meaning the duration of the contract). The period of time associated to the value recovery of the asset cannot surpass 5 years, as the contract cannot be negotiated further (according to the new regulations) (Aronsson et al, 2004). On the other hand, if the value of a player’s contract is considered to lower (given his performance, injuries, conflicts etc.), the club may write down the value. In order to be able to do this, the club must have a comparison value and a solid reason. Adversely, write-ups are not recognized, in accordance with the prudence principle in accounting.

Be guided accordingly my friends

Here is the link to the article http://www.researchgate.net/publicat...s._Expenditure

[Karl]

Why yuh beating di dead hor-see?

[Peter R]

Good question Karl... mi a tun eediat ina mi ol' age... yuh might know whe mi a talk bout

[Paul Marin]

LOL

I am an amateur accountant, I have no shingle but I do have some understanding of accounting generally. An ongoing discussion has been taking place where I have been trying to explain certain concepts in accounting which may or may not apply to football.

Here's the thing, I don't think my posts have been anti nor pro anyone, but merely by way of explanation of concepts so that the "valuation" discussions can move forward.

SO here goes for those who are interested. I found an article which I have not fully read, which deals with "Accounting for soccer players.."

A couple of pieces of information:

1. It would appear that football players are treated as INTANGIBLE assets. FYI if the intangible asset has a finite life it can be amortized. (Amortization in this case is synonymous with depreciation).

2. I will copy this excerpt here from the article. It responds to those who think contracts are not depreciated/amortized/written down:

As an intangible asset, the license to use the player paid through the transfer fee needs to be gradually written off. In this case, the write-off will be carried out throughout the economic lifespan of the asset (meaning the duration of the contract). The period of time associated to the value recovery of the asset cannot surpass 5 years, as the contract cannot be negotiated further (according to the new regulations) (Aronsson et al, 2004). On the other hand, if the value of a player’s contract is considered to lower (given his performance, injuries, conflicts etc.), the club may write down the value. In order to be able to do this, the club must have a comparison value and a solid reason. Adversely, write-ups are not recognized, in accordance with the prudence principle in accounting.

Be guided accordingly my friends

Here is the link to the article http://www.researchgate.net/publicat...s._Expenditure

Good post Pedro. I will definitely read the article. Part of the problem that we have with certain "noisy forumites" from that "noisy neighbour club" (even though they deny it) is that their pontificating on certain subjects using financials as justification for their arguments without fully appreciating the intricacies of financial engineering in any given industry, e.g. nuances of accounting as it applies to football teams, let alone understanding the basics of accounting.

[Karl]

Yes...but is this for education of the Massive or is it ammo against X?

[Assasin]

You are beating one, only him nuh dead yet. LOL!!!

[Peter R]

Karl you directed the question to Paul, but if I might venture my own response... it IS FOR THE EDUCATION of the massive. Now, once armed with the information it can be used to back up or refute (used as ammo if you will) any particular claim or position by any poster on the forum. So I see it.

[Paul Marin]

Karl you directed the question to Paul, but if I might venture my own response... it IS FOR THE EDUCATION of the massive. Now, once armed with the information it can be used to back up or refute (used as ammo if you will) any particular claim or position by any poster on the forum. So I see it.

So me see it to....don't need any more ammo against X, that's look shooting fish in barrel!!! LOL!!!

[Peter R]

Ayy sah

[Sir X]

How do these intangible assests depreciate in midtable , how top 4 would appreciate the squad,and how your coach plan to bridge that gap ?

If you dont have a plan after giving me a class on accounting,stop with the educated mumbling,Claffy, a Claffy in a benz is still a claffy .

If the salvo is we cant compete with top 4 because of obvious financial gaps,dig up Rafa plan for the academy, scouting and tell me what you get from it , google works.


You can always say i didnt admit the financial gap or better yet ,i never mentioned Rafas ,tan deh ole yuh breath a wait for it from me , while we rot in midtable.

[Peter R]

How do these intangible assests depreciate in midtable , how top 4 would appreciate the squad,and how your coach plan to bridge that gap ?

If you dont have a plan after giving me a class on accounting,stop with the educated mumbling,Claffy, a Claffy in a benz is still a claffy .

If the salvo is we cant compete with top 4 because of obvious financial gaps,dig up Rafa plan for the academy, scouting and tell me what you get from it , google works.


You can always say i didnt admit the financial gap or better yet ,i never mentioned Rafas ,tan deh ole yuh breath a wait for it from me , while we rot in midtable.

I was going to respond but, it feel like I have a whip in mi han' an about to beat a dead equine

[Sir X]

You cant , the red herring of accounting terminology has been lifted ! with all your mumbu jumbo of intangibles ,using proper accounting terminolgy, funny you didnt hit on spelling, I think claffy tried that once, you have to deal with LFC sitting in midtable and loosing value , the longer they stay there !

So what is the plan to get out, you and your buddy havent a clue to the point of discussing accounting terminology and how it applies to pool.

Are you for real, hint Rafa said if we can produce one good world class player a year we save ourselves that money , we did just that this week with Sterling, the other part he said was shrewd scouting, and of course it goes without saying a good coach.

[Karl]

Oooops!
Making a few mistakes today!
Sorry, Paul!

Yup! It was for you Peter.
...and seeing it is for The Massive; You are not saying this can be used against My GUNNERS as being careful on spending when 'playing with the figures' could allow more buying and financial statements being 'nicely' presented?

[Paul Marin]

You cant , the red herring of accounting terminology has been lifted ! with all your mumbu jumbo of intangibles ,using proper accounting terminolgy, funny you didnt hit on spelling, I think claffy tried that once, you have to deal with LFC sitting in midtable and loosing value , the longer they stay there !

So what is the plan to get out, you and your buddy havent a clue to the point of discussing accounting terminology and how it applies to pool.

Are you for real, hint Rafa said if we can produce one good world class player a year we save ourselves that money , we did just that this week with Sterling, the other part he said was shrewd scouting, and of course it goes without saying a good coach.

Where has the Rafa model been applied "successfully"?

[Paul Marin]

You cant , the red herring of accounting terminology has been lifted ! with all your mumbu jumbo of intangibles ,using proper accounting terminolgy, funny you didnt hit on spelling, I think claffy tried that once, you have to deal with LFC sitting in midtable and loosing value , the longer they stay there !

So what is the plan to get out, you and your buddy havent a clue to the point of discussing accounting terminology and how it applies to pool.

Are you for real, hint Rafa said if we can produce one good world class player a year we save ourselves that money , we did just that this week with Sterling, the other part he said was shrewd scouting, and of course it goes without saying a good coach.

Oh the simpleton is being simple again. So your plan is 1) hail mary development of one Raheem Sterling a year (this is so ridiculous I can't even laugh, oh what the hell ) 2) shrewd scouting and 3) a new coach. So how will #2 get us more revenue? Oh...by finding the next #1!!! Wooooooooooooiiiiiiiiiiiiiiiiiieeeeeeeeeeeeeeeeeee eeeeee... Disgrace...you are a genius!!!! GENIUS mi seh!!!!! LOL!!!!

Anyway, (mi still a wipe di eye wata from mi yeye dem).... here is how FSG plans to bridge the financial gap:

1. Expanding the stadium - this is a big deal and LFC's prior regimes dropped the ball going all the way back to the 1980s on this one. Match day revenue is the third biggest revenue generator after TV and commercial deals.

2. Developing younger players - this is not new. Everyone talks about it, but most recently, Southampton has been doing this more successfully than anyone else, just selling their kids too soon. Of course, to you Rafa is the ONLY one who thought of this!!!!

3. Investing in a LONG TERM squad - the LFC squad is one of the youngest in the Prem. They are more interested in keeping the squad together than anything else. The one thing the Sterling fiasco did is a) send a message to young players that we nah jus sell unu jus so - unu haffi bring big money...and the other is, "we play hardball"...in the end City caved to FSG, plain and simple.

4. Broaden the fan base - this is something that they are doing with partnerships with the Red Sox and with other commercial enterprises in the far east. The club's tour of Australia and Asia is a calculated commercial endeavor which will reap big benefits. My guess is that you will see Liverpool in Asia for preseason every year. As silly as this sounds, the fact that the team plays in RED is a big deal in China.

5. Taking a long term view - dummy fans will sit their and pine over every game lost, every player sold, every this and every that. Smart fans will look at the initiatives underway and realise that we don't have City's money so we have to be smart and invest in the future - young manager, young players, young fans. The model FSG is trying to duplicate is Arsenal's but without the big debt.

And to tie this all back to accounting. The lesson you concrete-headed-grasshopper, is simple. Capital expenditures on long term player investments at reasonable market prices with a manager who can develop young players bodes well for the LONG TERM future of the club...there is (as you credit the genius Rafa with) already the thinking of developing for the future in the club, but the "Rafa model" by itself is NOT EVEN GOING TO COME CLOSE to generating the kind of money the club needs to turn over year over year to be competitive. It is one slice of the pie but being the simpleton that you are, it's the only thing you see.

However, a bigger stadium, bigger commercial deals, bigger fan base, and cheaper players with potential to challenge for the top 4 are all initiatives a foot. And who better to develop young players than a former "youth coach". If you think for a minute that FSG believes we can crack the top 4 as a foregone conclusion with the current squad, you are smoking crack. They are not stupid...which is more than I can say for...oh well...you know.