ndombele
Lo Celso
Clarke
Sessengnon
Bergwijn
Reggie
Hojberg
Doherty
Rodon
Gill
Royal
Sarr
Romero
then loan fees of Bale, Vinny, Golini and Fernandez. it can’t be far off 400m can it? With not a great deal coming back in from sales. Not bad during a pandemic.
A few of us have said for a while now that the issues not the money being spent, but on what it’s being spent on. Hopefully Paratici will sort that out. Doesn’t seem to be what people want to hear though.
I think some creative accounting may have been applied in Levy's statement there.... SwissRamble's analysis doesn't show anything like that number. Swiss Ramble shows our gross transfer spend as ~£310m since our stadium was open - £136m (gross) in financial year 2020, £110m (gross) in financial year 2021 and £46m(net) this year (financial year 2022) - I have assumed about £60m gross for that window. Total net amount is about £250m. Or ~£83m per window (which I still think is ample and should allow us to be in the top 6 and pushing for top 4 if sustained for the next 5 years).
Some interesting bits and pieces from the accounts:
Last season we were about £120m down on match day revenue and probably £10-20m down commercial income. These will come back in the 2022 figures. There are also two new sponsorships (Cinch and Getir) that will show in the next set of numbers. My guess is perhaps as much as £15m combined. TV and media revenue is likely to reduce in 2022 due to numbers from 2020 being pulled into 2021 and also Europa Conference being worth less than Europa (I would estimate £145m of revenue in 2022 versus 205m in 2021 as a result of these two factors.
I think we can therefore expect our revenue number in 2022 to be around £90m higher than our 2021 number, taking us to about £450m of revenue. Not quite as high as our record revenue year of 2019 but notable in the fact that it will be achieved without any major contribution from European football.
Against that though is the fact that our operating expenses were lower by around £44m in 2021 (I assume due to stadium being mostly closed) so that will jump back up. This will be partly offset by us likely having cut our wage bill this year (expensive players going and ones replacing them likely to be on lower salaries). Let's take a punt at a £10m reduction in wage bill this year. So we'll be about £90m of revenue up but also about £30m up on costs. Rather concerning though is that our cash position reduced by £78m in 2021, only expected really considering pretty much zero match day revenue and still a fair amount of money spent on player purchases.
It looks to me as though in normal times (assuming paying only interest and not capital on our loans, the owners not loading even more debt on the club, the club keeping a reasonably level cash flow position to what existed at end of 2021 period, having a wage to turnover ratio at around 50% and assuming the club achieves Europa League participation) our club can probably afford to invest around £70m net per season on player purchases. A stadium naming rights deal might be able to take that amount to £80m to £90m, maximising non football events at the stadium might be able to take that up another £10 - £20m. £100m net investment into the playing squad at THFC is entirely feasible without us even having CL football just as long as we can get the commercial deals done (might take a bit of swallowing his pride from Levy on the stadium naming rights).
In seasons where we reach the Champions League it might be prudent for the club to continue to spend a similar net amount on transfers and use surplus funds to improve our cash position so that we have reserves in case of unexpected items, i.e. the most serious case of relegation, or a collapse in the TV deal, or a pandemic. Or should a less impacting event occur such as not qualifying for the Europa League we could dip into cash reserves to maintain our level of spending). Increasing our cash balance would also give us the opportunity to pay down debt if and when the cost of debt increases.
In theory £450m+ of revenue in year 2022 should mean that we can operate a £225m wage bill. Given that we have probably reduced wages from the £205m number just posted for 2021 (I'm guessing we're running at £195m for 2022) that could give us some nice headroom to bring in Bosman transfers (i.e. we could get as many as 3 new £200k a week players without needing to sell/release anyone). Of course that assumes that Levy does have some ambition for us to become more competitive with our wage to turnover ratio.
We look reasonably well placed financially to be able to operate a decent, sustained investment into the first team squad. It won't allow us to compete on a level footing with Chelsea, Emirates Marketing Project, Man Utd or even Liverpool but will allow us to compete on an equal (or more likely slightly better) footing than Arsenal and on a significantly better footing than any of the rest of the PL unless their owners sustain big capital injections.
It is clear though that we do need to get far better at selling players. We know that we can't compete with the 4 richest clubs in England so we should look to operate more like (e.g) Dortmund or Lyon, concentrating on young players, supplemented with the odd experienced head and looking to fund the next batch of promising young players by selling a superstar every couple of years. Doing that just might allow us to hit the sweet spot in the odd season where some of the young players have come on and the superstar hasn't yet been sold and we can pick ourselves up a proper major trophy. Hopefully the club getting Paratici and apparently overhauling our scouting and recruitment network indicates that we are looking towards that model. I can see us agreeing deals for two or three Bosmans in the next two windows (we have the room on the wage budget), selling Kane and bringing in Vlahovic and then using any spare funds to bring in players who are under 23 (including a few who count as association trained).
