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Post by Robin van Bergkamp on Jul 8, 2012 8:59:55 GMT
Guys I have never understood this. At the end of last summer I heard several times that the club take into account the wages paid to a player in computing the cost of that player. Thus if Pod costs £10m, they build into the total picture, his wages over the next ( I think ) 3 yrs, making the grand total let's say, £25m if he is paid £5m per yr. My burning question is - why do they bring in the cost of his salary? Surely this is an ongoing expense that is met by the gate and other receipts while the cost of an asset should come out of a different fund. And another thing - if you buy in someone to replace an outgoing player then surely you should by this method, also account for the cost saving of not paying the outgoing player. If I go to the market and buy a pund of apples I don't build into the cost of those apples, the cost of refrigerating the fruit nor the washing up liquid and water it will take to clean off the plates and knife after I have eaten those apples. Am I making sense? Later Gators  |
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Post by Jayramfootball on Jul 8, 2012 9:15:51 GMT
You are EXACTLY correct. The club cover wages and make a profit each year. It is stupid to suggest that the profit, which can be used on players also needs to cover wages!  Once again this is something I have only heard talked about since Gazidis came in. He also had the audacity to claim that our cash in the bank had to be used to cover wages - which is very misleading if you don't then. Go on to say that the cash will be added to on the other side from profits. Each year our cash pile is growing, and our playing staff are degrading. One thing is true and that is when cash is high, it pushes up valuations which can reflect in the share price. Kroenke has doubled his money already on his shares, as have all the other shareholders. I am sure they are delighted. |
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Post by Robin van Bergkamp on Jul 8, 2012 10:17:29 GMT
You are EXACTLY correct. The club cover wages and make a profit each year. It is stupid to suggest that the profit, which can be used on players also needs to cover wages! Once again this is something I have only heard talked about since Gazidis came in. He also had the audacity to claim that our cash in the bank had to be used to cover wages - which is very misleading if you don't then. Go on to say that the cash will be added to on the other side from profits. I'm glad you cleared that up Jayram since the former made no accounting sense BUT then again accountability is something that has been totally misconstrued by the CEO and board. What I really would like to know is - how many of the Arsenal faithful are fooled by this? By that of course I don't mean the eager beaver lapper uppers of anything that the management says. You know the ones I'm referring to of course... Not a very surprising consequence of stockpiling cash. Yet of course some will say no. Talk about flying in the face of logic and to which I will add, truth. Somewhere down the line the spin will run out of momentum. Hope it is not too late but surely the Arsenal faithful need to be aware of this blatant bout of lying. This deliberate wool-pulling is very disconcerting, especially as it hasn't been picked up in open discussions. Think I may ask the question on Ian Payne at 97.3 next Saturday if the opportunity arises. |
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Post by Jayramfootball on Jul 8, 2012 10:31:14 GMT
I am eagerly awaiting the full year accounts up to the end of May. I want to see what has happened to our cash position as the half year accounts showed some worrying numbers. We seemed to have shifted all our cash into short term investments in November (which is strange thing to do if you needed it to cover wages !)
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Post by Bergkamp a Dutch master on Jul 8, 2012 14:04:16 GMT
and the player contracts are becoming disturbing...... WTF have we been doing ?- with long long deals at high wages. Denilson has 2 more years at approx £50k !!!!!! Bendtner and co !!! are found to be on £50k and now almost impossible to sell on.
We must have an alarming bill for deadwood. Ivan the terrible - or was it Hill-Wood? - said we needed to prune the bill by £23m per year...... but how?
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Post by pneawf on Jul 8, 2012 17:51:23 GMT
and the player contracts are becoming disturbing...... WTF have we been doing ?- with long long deals at high wages. Denilson has 2 more years at approx £50k !!!!!! Bendtner and co !!! are found to be on £50k and now almost impossible to sell on. We must have an alarming bill for deadwood. Ivan the terrible - or was it Hill-Wood? - said we needed to prune the bill by £23m per year...... but how? We don't want these players and we are simply loaning them out to cover part or some of their wages. Why not just sell them for almost nothing, then we are not paying any of their wages. It's not like they are ever going to play for us again!!! We could get a million for each of them and save whatever we are paying them. Surely that beats paying 25% of their wages and getting nothing for them until they leave for nothing? I'm no financial genius, but that doesn't seem like rocket science to me........ |
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Post by Bergkamp a Dutch master on Jul 8, 2012 20:08:01 GMT
ah ! - but then you will face accusations of stockpiling dross, making crazy, failed contracts, having a few dozen that will never be top drawer PL players..... need I go on?
Trust me - AW & the Board don't go in for that sort of disarming honesty.
You can fool a lot of people for a lot of the time. While they are on board you don't admit anything.
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Post by Robin van Bergkamp on Jul 8, 2012 22:05:04 GMT
Accountability and honesty are rare amidst the halls of N5
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Post by Bergkamp a Dutch master on Aug 2, 2012 10:00:22 GMT
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Post by tufnelltoughie on Aug 2, 2012 18:48:27 GMT
As i understand it this is just a way of assessing the overall cost of a player over the lif cycle. I don't think it is all taken into the accounts in year 1.
Player cost amortisation is a black art which all clubs use as a kind of depreciation provision although most of our players actually appreciate in value i.e. we make a profit on them.
The CEO is really just trying to justify not wanting to pay the price required for really top players.
Wages are an annual wage expense in the accounts and shouldn't be confused with Gazidis's trickery as mentioned.
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Post by Robin van Bergkamp on Aug 2, 2012 23:45:37 GMT
As i understand it this is just a way of assessing the overall cost of a player over the lif cycle. I don't think it is all taken into the accounts in year 1. Player cost amortisation is a black art which all clubs use as a kind of depreciation provision although most of our players actually appreciate in value i.e. we make a profit on them. The CEO is really just trying to justify not wanting to pay the price required for really top players. Wages are an annual wage expense in the accounts and shouldn't be confused with Gazidis's trickery as mentioned. I hear ya Tuffers but I gather that the egghead employs this method in determining what to pay for a player. Thus if we have 60m to spend, it isn't a case of 3 players with a price tag of £20m each. The way Egghead works it out we could possibly only afford a max of two players depending on their salaries. If the first player is paid £100K per week, Gazidis's calculation would like this - Player 1 : 20m + 15.6m ( 3 yrs salary ) = 35.6m Player 2 : Leftin budget for cost+salary = 24.4m Total budget for transfers 60.0m No wonder we haven't bought anyone of real substance. It's all a spin since as we have agreed, salaries are an annual expense and shouldn't be brought in to confuse the transfer budget Gazidis = Deadwood  |
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