In the 4th article of a 7 part series, I take a look at how Rafa Benitez's transfer spending between 2004 and 2009 compares to Chelsea's spending over the same period.
SERIES GOAL
* To accurately report the gross/net spend of the UK's top clubs since 2004.
* To dispel the myth, exaggeration and misinformation surrounding the transfer spending of the UK's top clubs.
* To finally bring clarity and accuracy to this area so that future debates about transfer spending can be based in fact, not generalisation and biased opinion.
NOTES
* Liverpool and Chelsea have slightly different accounting years:
Liverpool: 31 July - 31 July
Man City: 30 June - 30 June
* I have omitted transfer activity (both teams) for accounting year 2009-10 as neither clubs' accounts for that year are available until 2011. Consequently, there is no way to be 100% sure about the figures.
* The transfer of Xabi Alonso took place after the 2008 accounting deadline, which is why it's not included here. I will update the transfer spending table when the 2009-10 accounts are released.
* This series is NOT an attack on Rafa Benitez. The comparisons to be undertaken are regularly requested by visitors to this site.
* These stats have never been compiled before online.
Rafa BENITEZ vs. Chelsea Managers 2004-2009
Chelsea's figures make a mockery of the lame net-spend argument used by many football fans:
* Chelsea spent £325m between '04 and '09, including £100m+ spent each season from '04-'06.
* Despite this huge outlay, Chelsea's average net-spend is only £2m more than Liverpool over the 5 years (!).
* Does looking at the net spend provide a true indication of Chelsea's spending power? Of course not. It's ridiculous to even suggest it.
* The only way to gauge the depth of Chelsea's spending power (and consequent value of their squad) it to look at their gross spend, which is significant.
* The net-spend cult still persist with the idea that net spend = the true gauge of a manager's ability in the transfer market. They'll try and tell us that Chelsea's squad only actually cost £80m; that in 2004, Mourinho didn't actually spend £100m - he spent £41m.
Net spend is quite clearly a non-credible excuse that football fans use to try and justify dubious transfer performance. 'But he only has a net-spend of [insert figure here] per yer' and blah blah blah. Utter nonsense.
SEE ALSO:
Part 1: Rafa Benitez vs. Alex Ferguson - Transfer spending comparison (2004-2009)
Part 2: Rafa Benitez vs. Arsene Wenger - Transfer Spending
Part 3: Rafa Benitez vs. Man City spending
Jaimie Kanwar
SERIES GOAL
* To accurately report the gross/net spend of the UK's top clubs since 2004.
* To dispel the myth, exaggeration and misinformation surrounding the transfer spending of the UK's top clubs.
* To finally bring clarity and accuracy to this area so that future debates about transfer spending can be based in fact, not generalisation and biased opinion.
NOTES
* Liverpool and Chelsea have slightly different accounting years:
Liverpool: 31 July - 31 July
Man City: 30 June - 30 June
* I have omitted transfer activity (both teams) for accounting year 2009-10 as neither clubs' accounts for that year are available until 2011. Consequently, there is no way to be 100% sure about the figures.
* The transfer of Xabi Alonso took place after the 2008 accounting deadline, which is why it's not included here. I will update the transfer spending table when the 2009-10 accounts are released.
* This series is NOT an attack on Rafa Benitez. The comparisons to be undertaken are regularly requested by visitors to this site.
* These stats have never been compiled before online.
Rafa BENITEZ vs. Chelsea Managers 2004-2009
Chelsea's figures make a mockery of the lame net-spend argument used by many football fans:
* Chelsea spent £325m between '04 and '09, including £100m+ spent each season from '04-'06.
* Despite this huge outlay, Chelsea's average net-spend is only £2m more than Liverpool over the 5 years (!).
* Does looking at the net spend provide a true indication of Chelsea's spending power? Of course not. It's ridiculous to even suggest it.
* The only way to gauge the depth of Chelsea's spending power (and consequent value of their squad) it to look at their gross spend, which is significant.
* The net-spend cult still persist with the idea that net spend = the true gauge of a manager's ability in the transfer market. They'll try and tell us that Chelsea's squad only actually cost £80m; that in 2004, Mourinho didn't actually spend £100m - he spent £41m.
Net spend is quite clearly a non-credible excuse that football fans use to try and justify dubious transfer performance. 'But he only has a net-spend of [insert figure here] per yer' and blah blah blah. Utter nonsense.
SEE ALSO:
Part 1: Rafa Benitez vs. Alex Ferguson - Transfer spending comparison (2004-2009)
Part 2: Rafa Benitez vs. Arsene Wenger - Transfer Spending
Part 3: Rafa Benitez vs. Man City spending
Jaimie Kanwar
A very interesting comparison...
ReplyDeleteDo you mean Man City?
Sorry about that - I forgot to change Man City's name over in the table. I've fixed it now!
ReplyDeleteI was sooo looking forward to the end of this season and finally seeing the end of "the Rafa-lution". From November on the IRWTer's said it's not "the Liverpool way" to sack a manager midseason, that any change would harm the team and that we had to give him the rest of the season to sort out his problems before judging him. Now the season's over, he failed miserably to improve performances, and yet still we're told that he deserves to be given more time.
ReplyDeleteRafa then comes out and brazenly states that he needs to overhaul almost half of his team, after SIX years in charge and ONE title challenge, and the IRWTer's say that he deserves the opportunity to splash the cash one more time and that NOBODY else could possibly do a comparable job, or would want to join such a pathetic club as ours??
And all this while our expectation for next season is lowered to be aiming for 4th place?!? wtf is going on at Liverpool FC?!?
This is really only half the picture, what about wages paid to players? From the extracts i've seen from the clubs accounts Chelsea's wage bill is more than £20m per year higher than Liverpool, thats £385,000 per week, thats a huge difference in quality...
ReplyDeleteI would also think when doing a comparison to dispel what is termed the net spend fallacy, showing the respective wages would also help considerably. I believe when Chelsea were the transfer kings they offered considerably more wages than anyone so the quality of players attracted respectively were classes apart. In that regard showing wages would also paint the picture about what Liverpool offered to entice players that otherwise ended up choosing Chelsea for the better remuneration.
ReplyDeleteLike clockwork.
ReplyDeleteEvery single time, the excuses start to pour out from people unwilling to just accept the transfer spending figures. First, it's 'what about wages'; then it's something else. Then something else again until something that reflects well on Benitez is found.
Wages have nothing to do with the amount of money spent in the transfer market. It's yet another excuse. Yes, wages are important but the the point is they have direct bearing on the figures I'm presenting here. The fact that Mourinho spent over 200m in 2 seasons (gross) has nothing to do with wages.
I am surprised it is not higher but again their net spend is higher, i guess it just takes 2 mil extra a year to get a team that can win the PL.
ReplyDeleteCurious though who did Chelsea sell to get almost 70 odd mil in 08/09?
From these figures, it would suggest that RA has only put in 80mil of his own money on transfers. Again we can talk about wages though, i wonder how much the difference is there. Does the records you have also cover player wages as a whole?
Again this does not disprove my theory that net spend is the figure we should look at and not gross. The way i read it, Chelsea have added 2m more talent to their squad than what we have every year.
Just a question, didn't RA own Chelsea before RB took over at Liverpool, do you have that years figures?
"wtf is going on at Liverpool FC?!?"
ReplyDeleteGood question.
If anyone thinks that the political situation at LFC is likely to foster a championship-winning atmosphere, then think again.
Too many factions pulling against each other and no ambition for the future coming from the (so-called) leaders at the club
It's a joke
And the proof that the wages argument is nonsense is everywhere. Chelsea have the highest wages bill yet Man United won the title 3 years in a row. How is that possible if wages are all important?!
ReplyDeleteSimilarly, Liverpool have a much lower wage bill than Chelsea, yet we beat them into 2nd place in 2008-9.
It doesn't wash, and like net spend, it's another lame excuse.
Is there a more pompous ass on the Internet than wannabe journo Jaime Kanwar? I doubt it... ;)
ReplyDeleteNickname - Your denial is truly a sight to behold.
ReplyDeleteRA has only put 80m of his money in?! The mind boggles. Get over the ridiculous net spend argument already! Abramovich has put in over 700m of his own money into Chelsea. The holding company he set up to do this is owed 700m+ by Chelsea FC. This is fact, and is in the various club/parent company accounts ( I've chekced). An article about it is here:
http://www.guardian.co.uk/football/2010/may/19/roman-abramovich-chelsea-loan-debt
How have Chelsea added only 2m more talent per year? You have to be joking, right? Do you not see how this is - with all due respect - an argument of little intelligence? You just refuse to accept that the amount of money spend is clearly important here? That spending 100m+ in one year is obviously going to allow you to buy a greater quality of player?
ReplyDeleteHow have Chelsea added only 2m more talent per year? You have to be joking, right? Do you not see how this is - with all due respect - an argument of little credibility? You just refuse to accept that the amount of money spend is clearly important here? That spending 100m+ in one year is obviously going to allow you to buy a greater quality of player?
ReplyDeleteNo - that is an unprovable assumption you are making. how do you know players went to Chelsea for the money? You don't. They may have gone there for the chance to work with Mourinho. There are other variables too - squad size, for example. The bigger the squad, the higher the wage bill. it's not as simple as you make out.
ReplyDeleteWhat we*can* prove as a matter of fact is how much money was spent on transfers for each given year. And if you have over 100m to spend in one year, you can clearly afford to buy the world's most expensive players.
But his gross spend is on 360m so where is the other 340m? As we are only talking about transfers are you saying to me that before RB took over RA spent an additional 340m on transfers?
ReplyDeleteBased on your figures presented he has only put 80m in on transfers as that is the money that he no longer has in his vast bank account after 5 years due to transfers. Whether or not that money has been invested in other parts of Chelsea i have no idea as i do not have access to that info and the info you have presented does not go into that detail.
where is my denial??? Denial of what?
All this shows is that chelsea have more money to spend, they spend more money on better players thats why they haven't had to add to the squad in the last couple of seasons, 215mil in two seasons as were we have to do it slowly over 5,6,7 seasons. Thats 11 world class players in two seasons we haven't even got that many in our sqaud.
ReplyDeleteoh and before you point out how that 215 mil wasn't spent on 11 players I know I was saying that because thats what that could buy.
Yes, they have added 2m more talent to their squad average per year than us. As we have added 14mil talent per year and they have added 16mil talent
ReplyDeleteIt is important to note they have sold 245.2m of talent and bought in 325.3m of talent. yes they have had a greater kitty than us, but they have also had to sell more of their talent than us
how much do you think wages/signin-on fees/player bonuses etc over 5 years costs? Exactly - a shedload of money. It doesn't matter what the money was used for, RA has, as a matter of recorded fact, put 700m into Chelsea.
ReplyDeleteYou are also assuming that money made back goes into RA's pockets. it doesn't. It stays in the club, as the accounts attest.
None of this changes the fact that 340m of RA's money has left his posession and has been spent on players.
The reason you are in denial is your persistence with the blatantly non-credible net spent argument, and the increasingly incredulous examples you come up with to justify it, all so you caqn keep using the argument to justify Benitez's spending, because you cannot bear to accept the possibility that Benitez has wasted lots of monehy at Liverpool.
But then you forget to mention that Chelsea have to pay twice the price for a player that any 'normal' club would have to spend because the selling clubs know they are loaded.
ReplyDeleteCan you provide the list of players for Chelsea. 2008/9 was nominally the season that Bosingwa and Deco signed. It possibly could be accounted for by accounting periods and transfer windows not being aligned, but without a breakdown of which players are included in those figures, it looks suss.
ReplyDeleteThe only true way to compare expenditure is to look at the total cost of ownership of a player. Basically how much it costs to acquire and employ them for the length of their contract. As that information is confidential and never released, any analysis is flawed. You must take signing on fees, transfer fees, wages, agents fees, levy and eventually sale proceeds into account.
For a club that signed Ballack in the way that Chelsea did, you have to look beyond just the transfer fee.
Ultimately looking at aggregated figures does not really prove anything. It is trivial to manipulate the presentation of the figures to put whatever spin you want on them. It is always arguing from partial data.
I wasn't arguing otherwisw. You're right - Chelsea have had more money to *spend*, i.e gross spend. A 10m differential in net spend does not account for the huge riches they've had at their disposal. 80m net spend over 5 years does not quantify the value of their squad *over 5 years* in way, shape or form, but this is what the net-spend cult tries to tells us. According to them, the value of Chelsea's squad over 5 years is 80m.
ReplyDeleteIn other words, the squad is not worth the money paid originally; it's only worth the money gained from sales. Utterly nonsensical point of view.
ReplyDeleteNo, Jon. Your method of quantifying the value of the player is wrong. Why is it wrong? Because that is not how the club's themselves record transfer spending. They record it exactly as I have presented it. Whether you think it's suss is irrelevant - the snippets from the accounts are provided. The figures are fact. No amount of trying to twist the issue with endless exceptions is going to change that ;)
ReplyDeleteAnd as the table explains, the accounting period and transfer windows are not aligned. Accounting periods are for an entire year, not just for individual transfer windows.
ReplyDeleteAnd as the table explains, the accounting period and transfer windows are not aligned. Accounting periods are for an entire year, not just for individual transfer windows.
ReplyDeleteI see you have got Chelsea's recoup value from the accounts but I'm thinking the Disposal figure may have depreciation or write-off value included in that amount and doesn't have the cash value received.... Do you have the full accounts?
ReplyDeleteI can't think how Chelsea have recouped nearly £125M in two years?
Thanks,
Believe me i am not worried that RA doesn't see that money, the point is the club has not spent that much money, well not as much as i thought. I haven't said that RB's transfer have been great, all i have said, and i am sticking to it even when talking about Chelsea Manu or who ever. Netspend is the important figure. Why can't you understand that? In the business world this is the most valuable figure, why do you not see that?
ReplyDeleteYes he spent 20m on Aquaman but to do that he needed to sell Alonso for 30m. If Alonso wasn't sold he would never have bought Aquaman as the money would not have been there.
No the squad is 80m more valuable not worth 80m. Again i have never said otherwise
ReplyDelete<span>> wtf is going on at Liverpool FC?!? </span>
ReplyDelete£110K+ of interest payments per day. That is the real scandal. The biggest problem facing the club is the American carpetbaggers. It does not matter who the manager is whilst the leeches are draining the lifeblood from the club, it isn't going to improve.
> <span>thats £385,000 per week,</span>
ReplyDeleteOr to put it another way - half what our American owners cost us.
> <span>thats £385,000 per week,</span>
ReplyDeleteOr to put it another way - half what our American owners cost us.
Yes, I have the full accounts, and the disposal figure does not include depreciation or write-off value (!). The accounting year runs from June to June for Chelsea, so that includes the entire Summer transfer window and January.
ReplyDeleteBut that doesn't make sense! How do you know how valuable the squad was in 2004 before all this money was spent? Furthermore, many of the players bought are still at the club and do not figure in the money recouped section...
ReplyDeleteLots of players get sold in that period - the figure includes *everything*, not just big sales. Youth sales, all transfers (and expenses that go with those etc). Go to Chelsea forum as ask someone for a lists of all players sold etc and you'll see.
ReplyDeleteYou don't read articles on here very often, do you, as you are still spreading the misinformation of the club itself paying £110K+ of interest payments per day, which is wrong.
ReplyDeleteBut he has spent about 20m POUNDS on Aqualiani while getting about 30m EUROS for Alonso. Don't trust any figures you have falsified yourself.
ReplyDeleteCan I ask your opinion on something Jaimie, and this is not a dig or having a go.
ReplyDeleteAs you are have analysed the accounts over the last few years and have an idea of comparisons wages etc, my question is ignoring things such as the Americans, based entirely on all aspects of comparative financials with main rivals, do you think Benitez has:
A) Done better than you would expect
B) Done about what you would expect
C) Done worse than you would expect
I know it is nearly impossible to say as the game is not just down to money, but I am interested to know, just your general opinion, how has Rafa done over the last few years and how much better should he have done. Please take into account you have not seen the clubs accounts that cover last season.
Many thanks
The article is good but actually quite incorrect. The sections you have referred to in the financial statements are a good source for working out what the spend in any year was but they are not a source for working out the sale proceeds - this is due to accounting convention. Let me explain:
ReplyDeleteAcquisition £20m - this is indeed the value of players purchased during the year
Disposal £25m - this means that during the year the club sold players that were <span>originally</span> purchased for £25m not that they sold players and received £25m - they may have sold them for nothing if for example they left on a Bosman.
If I expand further included in the Chelsea recouped amounts above will be a significant amount in respect of Shevchenko, Crespo and possibly Mutu. The actual amount received for these players was significantly (possibly £50m) less than what they paid. Therefore, the proceeds in your analysis are significantly overstated.
Hope that makes sense.
convienently it is not pointed out that chelsea spent big the year or so before this and had just finished in the top three plus champ league semi final . they all ready had a srong squad so could afford to spend there money on 10 to 30 million pound players where we had to shop at the lower end to build our squad depth which lead to more in and outs thus the high gross spend. also to be pointed out is yes your right chelsea havnt spent much last couple of years because there first 15 players are all 10 to 25 mill players accept for cashley cole and we no why he was cheap . plus the odd excetion . now sum of these chelsea players are getting on , they will spend big again soon . they virtually had the beest team in europe b4 mourhino took over but still spent alot , yet we where a average side so its pretty obvious we would have to spend much more than chelsea to have reached there level consistanly . also chelsea wages are mega
ReplyDeleteI'm confused, your the ring leader of the rafa out mob and I'm struggling to fatham why on gods green earth you would post this. You could of called it 'I've been wrong all along', it clearly shows the differece in spending power and sort of debunks your views that rafa is the problem, if anything you have to say he has over achieved, coming second the season before last, winning the champs league,getting us to a second final, oh ye and the FA cup. Not being able to buy 4 or 5 top quality players and allow them to gel is why we finish 7th. Spurs were like my bird with a credit card last summer and look were they finshed its simple back your manager and you tend to get results don't and you wont.
ReplyDeletepeace and love (no I'm not Ringo Starr)
The reasons I posted this are in the article. I'm doing a comparison of LFC spending vs other top teams. It's never been done before, and it's information that is useful and important.
ReplyDeleteI'm sorry, but you are completely and utterly WRONG. Please do not try and spread misinformation on this site. The accounts themselves explicitly state the opposite of what you've just said. There are notes in the acounts explaining how the transfers are worked out, what is included in the disposal figure etc. Are you suggesting the accounts are wrong and you are right?
ReplyDeleteI just love how people try and discredit information they don't want to see disseminated.
The disposal figure is the money *received* from everything relating to player sales. I've already posted the proof of this various times on various threads.
Ok, so what are your views now that you have done this?
ReplyDeletecan you see that Benitez may be working with his hands tied?
I also read the Benitez, ferguson comparison and he faired pretty well as did his career stats you posted so I'm intrested to know what your thinking now.
c) Benitez has done worse that expected in the league with the money and players at his disposal over the years.
ReplyDeleteThe league could've been won in 2007-8 and 2008-9. 24 league draws between 07-and 09 was our major undoing (amongst other things)
We can all remember the ridiculous formations/line-ups/substitutions over the years, along with the complete wasting of players like Crouch, Keane etc, players who could've had a major impact *if allowed to play regularly*
I could write a book on why Liverpool should've done better under Benitez (and one day I probably will!) - for now, everything about my reasoning for the above is on the site.
Benitez has not had his hands tied!!
ReplyDelete266m given to him to spend between 2004 and 2009 proves this!
Over the last 5 years, Benitez has given MORE money to spend than Arsenal, Man United and Man City! You cannot accept that fact and then say that he's had his hands tied. it's ridiculous!
I can't be bothered to debate this. Let's agree to disagree - you can think that Benitez has had his hands tied. I'll be realistic and see things the way they really are.
Anteater is correct. Your generalisation about 'in the business world' etc is just you parroting what you;ve heard other people say. Someone else says it, so you adopt it and believe it.
ReplyDeleteFootball is not the business world!
it is a business, but the main goal of football clubs is not the bottom line. It's important, but the main goal is to win football matchs, win trophies and progress. You cannot ascribe genral principles of the non-sporting football to football. You do that because it suits your argument but in reality it is not true.
And your contention that Alonso had to be sold to fund Aquilani is more ill-conceived generalisation. How do you know that? Prove it. You can't. Furthermore, Alonso was sold because HE WANTED TO LEAVE. It had nothing to do with Aquilani. Aquilani was bought BECAUSE Alonso left, and we needed a replacement. If Alonso stays, we don't buy Aquilani.
I pity the denial you're in, I really do. You clearly believe this net-spend argument because other people believe it, rather than arriving at that believe by yourself. It's obvious because you come up with *exactly the same* arguments and thought -process as every other net-spend cultist, most of which were brainwashed by other Liverpool fans on LFC message boards.
As I always argue, it's groupthink on a grand scale. Pro-Benitez fans have their defence-mechanisms, and the main one is net-spend. It's drummed into you to the extent that you are, quite literally, brainwashed into repeating it.
Chelsea 2008 to 2009. gross spend only £1.2 million, recouped £69.2 million. Can anyone please verify these figures other than Jamie ( who lives in a parallel universe ).
ReplyDeleteDid Chelsea really only spend £1.2 million that year? and who did they sell to recoup £68.2 mill?
Anteater is correct.
ReplyDeleteAquilani cost = close to 20m pounds
Alonso sale fee = 24.3m pounds (about 30m Euros at the time of sale)
Your generalisation about 'in the business world' etc is just you parroting what you've heard other people say. Someone else says it, so you adopt it and believe it.
Football is not the business world!
It is a business, but the main goal of football clubs is not the bottom line. It's important, but the main goal is to win football matches, win trophies and progress. You cannot ascribe general principles of the non-sporting business world to football. You do that because it suits your argument but in reality it is not true.
And your contention that Alonso had to be sold to fund Aquilani is more ill-conceived generalisation. How do you know that? Prove it. You can't. Alonso was sold because HE WANTED TO LEAVE. It had nothing to do with Aquilani. Aquilani was bought BECAUSE Alonso left, and we needed a replacement. If Alonso stayed, we wouldn't have bought Aquilani.
I pity the denial you're in, I really do. You clearly believe this net-spend argument because other people believe it. It's obvious because you come up with *exactly the same* arguments and thought -process as every other net-spend cultist, most of which were brainwashed by other Liverpool fans on LFC message boards.
As I always argue, it's groupthink on a grand scale. Pro-Benitez fans have their defence-mechanisms, and the main one is net-spend. It's drummed into you to the extent that you are, quite literally, brainwashed into repeating it.
Benitez has also won more trophies than Man City and Arsenal in the last five years.
ReplyDeleteHe probably has read the relevant article, but he chooses to ignore the truth and keep deliberately spreading the '110k a day' myth because it makes the owners look bad.
ReplyDelete<span>I'm very familiar with the Fixed Assets accounting methods and they work as "H" explained. When you buy a player the purchase value (cost) is posted on the Fixed asset account as Acquisition. When you sell a player the original value minus depreciations is posted as Disposal.<span> </span>The difference is posted on the PL account (profit or loss)</span>
ReplyDelete<span> </span>
<span>If you buy a player for 20m (cash) and sell him for 5m a year later (cash) the accounts would look like this:</span>
<span></span>
<span>Purchase:</span>
<span>20m debit on Fixed Assets</span>
<span>20m credit on Cash</span>
<span></span>
<span>Selling:</span>
<span>20m credit on Fixed Assets (because no depreciation has taken place)</span>
<span>5m debit on Cash</span>
<span>15m debit on loss from players sales (PL account)</span>
No, Runar. You are wrong. Football accounting uses different processes to the type of accounting you are used to. Players are categorises as 'intangible fixed assets', and there is whole different methodology to the way they are accounted for. Please don't try and second guess the accounts when you haven't even looked at them. I have - and my figures have been verified by an accountant offline, accounts on this site and Deloitte's football accounting principles.
ReplyDeleteThe example you have used does not occur in the accounts. It still amazes me how people are dead-set on trying *anything* to discredit figures they don't personally agree with/want to see buried.
Read through the thread and to be honast its utter shite. Also why do any people who question you get banned?
ReplyDeleteWould it be unreasonable to factor in the fact Chelsea (and others!) were stronger in terms of their squad in 2004. Ranieri had a lot of money to play with in the summer of 2003 on the likes of Makelele, Mutu, Joe Cole, Bridge and Duff.
ReplyDeleteI'm not seeking to defend anyone I'm just saying it should be considered. If any team is trying to 'catch' their rivals who are regarded as stronger they may have to, theoretically, spend more to get to that level and beyond.
Hey Mike,
ReplyDeleteThat's not unreasonable at all. How people choose to interpret the figures/fit them around their own view of the situation is down to them. If you feel Chelsea's squad was stronger in 2004, then that's up to you.
Is there a more pompous ass on the Internet than wannabe journo, Jaimie Kanwar...? ;)
ReplyDelete<p><span><span><span>I‘m sorry Jaimie Kanwar but Runar is spot on.<span> </span>These are the fundamentals of Fixed Asset Accounting.<span> </span>I work for Deloitte and these fundamentals are always the same for all industries.<span> </span>Of course you have some minor difference in methods of depreciations and things like that.<span> </span>But the fundamentals described by Runar are the same in all industries, including football.<span> </span>If you THINK that football accounting regarding these fundamentals of Fixed Asset Accounting is different it would be REALY interesting if you could explain them to me.</span></span></span></p>
ReplyDeleteThe bottom line is this - Chelsea and ManU had very strong teams when the current LFC manager was hired. As such, over the years they have had to AUGMENT their squad. LFC on the other hand has had to completely rebuild from ground up. To do that takes $$. Takes alot of $$ to make up the ground and even more $$ to get to the front. And its not going to get any easier with the money that Man City has to play with
ReplyDeleteThe manager has had his issues in the transfer market as has every manager in the game. He has done no worse than any other manager.
Isn't it written there in black and white? Intangible assets balance at July/August 2004 for Liverpool is half what is was for Chelsea
ReplyDeleteso, Jaimie, you wouldnt think that the 2004 Arsenal, Chelsea and Man U squads were stronger than LFC?
ReplyDeleteIn other words - our squad was as good as theirs?
No - I would probably agree with that. HOwever, that doesn not mean that the squad left by Houllier was poor. It was not - that is one of the biggest myths out there about LFC.
ReplyDeleteIn any event, this is not the issue. The issue is how much money was spent after Benitez took after, and what players the money was spent on. Pro-Benitez supporters always try and derail the focus of the debate by bringing up the same old escuses. Instead of focusing non the quality and impact of the players bought, they'll say 'but what about wages/strength of squad compared to United/Chelsea/Houllier's crap squad etc etc. Classic avoidance tactics. Anything but have to justify how Benitez has wasted a crapload of money in the transfer market.
And how much did Chelsea spend in 03-04? compared to Liv?
ReplyDeleteWhat does that have to do with the money spent by Liverpool and Chelsea between 04 and 09? Absolutely nothing.
ReplyDeleteAnd yet still came up with a squad that should have won the title twice and is still capable of doing so next season with a few minor teaks?
ReplyDeleteWhat's your point, Fraggs? The squad was/is capable. It was capable under Houllier; it was also capable of winning the league under Evans (Between 95 and 97). None of that matters if the manager is *incapable* of getting the best out of the players at his disposal, which is clearly the case with Benitez.
ReplyDeleteThere are no prizes for merely being capable of winning something.
Perhaps I can sum up:
ReplyDelete- The 2004 squad of Liverpool was worth 53% of the Chelsea squad at the same time
- In the 2004/05 season Chelsea finished 1st, Liverpool 5th
- Since that time Liverpool and Chelsea have had a similar net spend
- Since that time Chelsea have had a significantly greater gross spend
- Liverpool have changed all but 2 of their players from 2004, Chelsea have changed all but 7 of theirs
- Since that time Rafa has built up a squad that, by Jamie's assessment, should have won the league title twice and is still capable of doing so today
So Liverpool had a lesser squad to begin with, have spent less money overall, have spent less money as a net balance and yet have gone from fighting for a champions league spot to being capable of winning the title.
You've labelled Benitez a failure in the transfer market and yet you think the squad he put together should have won two titles against the significant might of Chelsea and United. I completely support your right to criticise Benitez for his management of the players in his team but as I've said many times before, you can't have it both ways. You can't say he's been poor in the transfer market if the team he's bought should have won two titles. It's completely absurd. You can't ask more of a manager IN TERMS OF TRANSFERS than to put together a team strong enough to win the title. By your own evaluation that is what Rafa has done. Has he made mistakes, absolutely. Has he made dud buys, no question. But what you're suggesting is rediculous. You need some of the "realism" you refer to in your site's motto. If a manager puts together a team that should win two titles then he has, in terms of transfers, done a very good job. End of story.
ReplyDeleteYou need to ask yourself this:
ReplyDeleteThese teams that you say "should" have won the title twice since Rafa has been here, under what manager do you think they would have won the title? Would Mourinho have done it? Wenger? Or is it the other bloke you're talking about, the single most highly regarded manager in modern English football?
I don't think you can say with any authority that Mourinho or Wenger would have done it with those squads. You can express your vague opinion but unless you think those squad were exceptionally strong, what are you basing your opinion on? You either think those squads were very good or you have some other unexplained reason for thinking they should have won the title. Remember, these are your words.
If you're ultimately just saying that those squads would have won the title if we were managed by Alex Ferguson then all I can do is laugh. So if we had the best manager in world club football we would have won the title. Astounding. What brilliance, what amazing observation. Rafa is not the greatest manager in world club football. WOW! I'm stunned!
Realism, Jamie. It's a very broad concept. It can mean recognising that winning the Premier League is actually fairly difficult to do. Perhaps it means seeing that finishing 4 points behind a team like United is actually a significant achievement. Perhaps it means accepting that there simply are not that many managers out there who can do a better job than Rafa.
Fraggs - once again you are misquoting me to serve your own argument. I have never labelled Benitez a 'failure; in the transfer market. Please post a link to the article/comment where I said this. I have been critical of his transfer spending but always acknowledge that he has bought good players too.
ReplyDeleteI beoieve he wasted a lot of money in the transfer market, yes, but the players's he's bought and dumped could've formed the basis of a title winning side (2008-9: Keane, for example, who would've also been useful last season).
The team was clearly capable of winning the league in 2008-9, and cold've won it in 2007-8 aswelll (IMO) with a different, more progressive and inspirational manager.
As I said, LFC were also capable of winning the league under Houllier (2002) and Evans, but it never materialised.
In hindight, can you argue that they did a great job inb the league? Same goes for Benitez overall. The chances were there, but winning the league was never a serious possibility becausehe could not harness the potential of his team.
Even in 2008-9, the title 'challenge' was always going be an anti-climax. United were never really in danger of losing out to Liverpool because Benitez would always be guaranteed to revert to type and make the same old mistakes.
Yes, Fraggs - In my view, Mourinho, Wenger and Ferguson would've won the title in 2007-8 and 2008-9 with the squad available. And you can say this with some level of authority for one reason: all three of those managers have won the title multiple times. Mourinho has won the league with every team he's managed so the odds are very strong he would've been capable of winning it with Liverpool. Same goes for Ferguson and Wenger, both of whom play a much more attacking, progressive style of football than Benitez.
ReplyDeleteAnd no - I do not and will never accept that there are .not many mangers out there who can do a better job than Benitez'. It's just not true. or do you really think that not many managers could take Liverpool higher than 7th place in the league?
Once again, being 'capable' means nothing. Actually doing it is what matters. Liverpool were capable of beating Milan in the 2007 CL final. Becauase of Benitez, the team failed. Same goes for the league.
ReplyDeleteChelsea were capable of winning the lague between 2006 and 2009; they had the highest wage bill; the highest gross spend (with 200m+ spent in the previous 2 seasons), yet they still failed to win the league 3 years in a row.
Capable = nothing without a manager to turn capability into victory.
What your post above shows is how badly Benitez has failed. He's had squads capable of doing great things in the league but because of his mistakes, cautious approach and lack of motivational power, he's been unable to maxmise the potential of hissquad.
Another good analogy is the England team. Apparently the 'Golden Generation' full of alleged 'World Class' players. Repeatedly fails in big tournaments and actually failed to qualify for the last European Championships.
The team is capable of winning a major tournament but they never have. Why?
The manager. Like Benitez, England managers over the last 10 years have not had the ability to maximise the potential of the players at their disposal.
Well it's clear where we disagree. I don't see Mourinho or Wenger taking Rafa's 2008 squad to the title. They've won titles, of course, with their own teams, teams they built themselves. Jose built a team that is clearly shown in your figures as being more expensive that what Rafa has built. Wenger hasn't won a title in some years now and football has changed in those years, Real Madrid, Chelsea and Man City have seen to that with the kind of money they throw around. Managers have always had to work hard in the transfer market but the factors of the past few years are unique, at least they seem very much that way to me.
ReplyDeleteAs for progressive football, I think too many people have forgotten how Mourinho won his titles at Chelsea, how he just won a title with Inter. He does not play attacking football. In terms of stubborn tactics he's about as close to Rafa as any other manager in the world. It cost him his job at Chelsea.
As for your question, I can only ask you the same: do you think there are many managers out there who could take Liverpool higher than 2nd? It hasn't happened for 20 years. I admire your enthusiasm for O'Neill and others but there are no guarantees in this game. Rafa will improve his team this summer, with some help, and Liverpool will compete again next season. With luck we'll push for the title again. I think asking for more than that is foolish.
I agree with all of this. Liverpool had the opportunity to do very well and we came up short.
ReplyDeleteIf you're interested, my point is that if Liverpool were in a position to win titles, if, by your words, they "should" have won it twice then this indicates that it was a very good squad. You don't get to a position where you "should" win the Premier League against Chelsea, Arsenal and United without having a very good squad.
This article talks about transfers, about how much money Rafa has spent. My point is very simple:
Overall, since Rafa has been at LFC only two teams have performed better in both the Premier League and Champions league. Both of those teams, in 2004, had more expensive squads. The quoted accounting records show that. Both of those teams have matched Rafa's spending since he arrived. Rafa has bought more players for more money when compared to united but there is no evidence that he spent more money per player and his net spend, as much as you disregard it, is less.
So how is it then that we expect a manager to come to a team where there are two established title challengers and a team with significant finances, take his team that already is not as expensive as the competition, spend only as much money, or less, as the competition has to spend and yet go from being 4th place challengers to title holders? In the process he needs to knock off two of the very best managers the Premier League has seen and rebuild the entire squad to suit his purpose, his style and his tactics.
You see this as an "apologist" approach but I think I'm just being realistic. I'm not immensely disappointed with Rafa as a manager, I don't think he's done a terrible job. I think he's had difficult circumstances and very very lofty goals. I think winning the Premier League is much much harder than people allow when discussing it. I think what he's achieved is commendable and I look forward to seeing him produce another competitive season starting in August.
I am a firm believer that if Rafa's team comes together as he sees in his own personal vision then we will be very close to unbeatable. I believe this because I've seen it. When Liverpool play perfect Benitez football they beat the best in the world: Barcelona, Real, United, Chelsea, anyone who cared to try. This has all happened and it is my view that aiming to recapture that form is the best chance we have at being a truly great team.
Yeah good homework am impressed, but maybe you should now try and compare wage bills my friend, see what kinda budgets rafa has got to try and attract big names, compared to the rest!!
ReplyDelete(chelsea had bench players not even first 11, on wages more than gerrard and co!!)
Plus the fact rafa has had to sell players before he buys in last few years has made him powerless in the transfer market in terms of getting the valuations he thinks are appropiate for his out going players.. which obviously has an affect on the recouped section which then affects the net spend section!!
In chelsea's case they would invest in new players first then whoever gets sold after theyve got the players they need, would either get sold for the right amount or rot on the bench..and quite affordably so (Abromovich!! were talking here)
This was totally the opposite for rafa, as we all know 'sell before we buy' and every club knew this and used it to their great advantage in their bargaining tools!
We can all have 100 million in one transfer window and splash at superstars left right and centre but having little money each transfer window, (let alone sell before you buy) is not going to get you superstars but average players!!
Rafa has done a brilliant job under circumstances, dont get me wrong, i absolutely hate some of the decisions he's made!
But so has the drunken sailor who is considered the best around e.g veron, carrick, anderson, The 35m berbatov and of course the great oshea..
For chelsea flops the list starts with the 30m shevchenko, 15m alex, the ever consistent portuguess right back blah blah blah...And these mistakes are from 'the special one!'
I can sit here all day and think of other things for all you anti-rafa but alls am asking is just be a little bit fair when you come to comparing and open ur minds a little wider..not to mention or even start on players at the academy who rafa has invested in plus the average age squads??
In rafa we trust, H&G to hell!
I think you have got it wrong on the accounting policy... I'm not trying to be pro/against Rafa just looking for accurate information which 99% of the time you have provided....
ReplyDeleteReading CFC's 2008 Annual Accounts...
You are correct to take the Expediture from the Additions from Note 7: (£80.727M).
But Disposal or Sales should be calculated the following way as per Note 1 "Accounting Policy - Player Registration" (Page 9)
"Fees Receivable are set off against the players' Net book value at the date of sale, plus any payments made in settlement of the contracts and the difference is treated as a profit or loss on disposal."
So taking the above into account here's the rest of the information needed to come back to Fees Received
Within the "Directors Report - Business Review"- The Club made a profit on player trading of £22.2M (2007 £9.3m)....
The other bits of information needed...
NOTE 7: Player Registration
Costs:
Disposal within the Year: (£56.527M)
Depreciation
On Disposal: (£45.967M)
So the calculation would be 56.527 - 45.967 = £10.56M as Net Book Value
So Fees Receivables or Player Sales for 2008 = £10.56M + £22.2M = £32.76M.
This is your blog and you can do what ever you want but I would check my workings with your offline accountant or any other accountant you trust.
How many times...
ReplyDeleteYour calculations are incorrect.
The additions/disposal values are actual, absolute values, i.e. the actual amount of money paid/received for players.
Depreciation/net book value figures etc DO NOT represent actual money paid/received - these are used to track the the *value* a club places on a player. The valuation of a player is 8completely separate* to the real world monetary figures related to the cost/disposal of the player.
Example:
I buy a car for 10k
5 years later, I sell it for 5K.
After 5 years, the value of the car has obviously depreciated (!). If someone asks me the value of the car after 5 years, I would probably say 5k (or whatever my personal valuation).
However, in real terms, this does not change the fact that I originally paid 10k for it, and it does not change the fact that I received 5k when I sold it.
This is what the additions/disposal figures take into account.
I *have* had this checked by an accountant.
It's obvious from the report anyway.
The bottom line is a club's analysis of how a player has depreciated over time bears no relation the *actual cost* of that player.
The actual cost = how much was paid originall, and how much was received at sale.
I know you have about 1000 emails saying information is missing something etc....
ReplyDeleteBut seriously read the Accounting Policy... How do you think they account for Profit or Loss on player sales...It gives you the calculation... Are you saying the account policy is incorrect in CFC's accounts?
Yes I know you are looking for Cash Paid but £56.527 is not what they received...
Your assumption is what the club receives goes against Cost under Disposal... How is that possible...
So what you are saying is If you buy a player in Year 1 for £10M (Addition) and sell him in Year 5 for £5M (Cost - Disposal) then what happens to the £5M Balance it can't sit in your Year End Balance under Cost?
You don't have the asset and that's how Enron got into trouble!
Please explain Jaimie who Chelsea "sold" in order to "recoup" £69m in transfer fees? I'll think you'll find that figure includes players who's contracts weren't renewed (Shevchenko) and other such costs. I certainly DO NOT remember Chelsea selling any players to the tune of £69m!
ReplyDeleteI believe you've completely twisted your Benitez v Chelsea spend to entirely suit your own agenda - this is not the same approach you took when comparing his figures to Man City, you've changed tact here to try and paint Chelsea's spending to being as near to Benitez's as possible when anyone with access to google knows otherwise!
So come on Jaimie, you've got access to the figures, who did Chelsea sell in 2008-2009 which accounts for a £69m sales figure?
Whether you think you've been balanced here is your POV, you know full well if comparing NET profit/loss for transfers Chelsea blow us out of the water, you've included the complete CLUB intangible fixed assets data to purposely muddy the waters.
Here's one undeniable fact for you, Chelsea's squad cost in 2008/09 - £252,910,000, Liverpool's cost - £154,040,000.
I really don't see how you can even attempt to portray Chelsea as being our not so rich cousins!
Chelsea recouped £34.9m in player sales for the 2008/09 period, please provide EVIDENCE how you arrive at £69m. I think you know full well that figure isn't just transfers.
Chelsea only spent £26.8m in 2006-07 did they Jaimie? Well that's rather surprising considering Schevchenko was £30m alone! And then you've got the additional costs of Kalou, Bohlahrouz & Cole!
Admit it Jaimie, you know for a fact the "evidence" you've provided isn't just transfers and that's why you've used that specific data - to make Benitez look as bad as possible.
Please explain Jaimie who Chelsea "sold" in order to "recoup" £69m in transfer fees? I'll think you'll find that figure includes players who's contracts weren't renewed (Shevchenko) and other such costs. I certainly DO NOT remember Chelsea selling any players to the tune of £69m!
ReplyDeleteI believe you've completely twisted your Benitez v Chelsea spend to entirely suit your own agenda - this is not the same approach you took when comparing his figures to Man City, you've changed tact here to try and paint Chelsea's spending to being as near to Benitez's as possible when anyone with access to google knows otherwise!
So come on Jaimie, you've got access to the figures, who did Chelsea sell in 2008-2009 which accounts for a £69m sales figure?
Whether you think you've been balanced here is your POV, you know full well if comparing NET profit/loss for transfers Chelsea blow us out of the water, you've included the complete CLUB intangible fixed assets data to purposely muddy the waters.
Here's one undeniable fact for you, Chelsea's squad cost in 2008/09 - £252,910,000, Liverpool's cost - £154,040,000.
I really don't see how you can even attempt to portray Chelsea as being our not so rich cousins!
Chelsea recouped £34.9m in player sales for the 2008/09 period, please provide EVIDENCE how you arrive at £69m. I think you know full well that figure isn't just transfers.
Chelsea only spent £26.8m in 2006-07 did they Jaimie? Well that's rather surprising considering Schevchenko was £30m alone! And then you've got the additional costs of Kalou, Bohlahrouz & Cole!
Admit it Jaimie, you know for a fact the "evidence" you've provided isn't just transfers and that's why you've used that specific data - to make Benitez look as bad as possible.
Please explain Jaimie who Chelsea "sold" in order to "recoup" £69m in transfer fees? I'll think you'll find that figure includes players who's contracts weren't renewed (Shevchenko) and other such costs. I certainly DO NOT remember Chelsea selling any players to the tune of £69m!
ReplyDeleteI believe you've completely twisted your Benitez v Chelsea spend to entirely suit your own agenda - this is not the same approach you took when comparing his figures to Man City, you've changed tact here to try and paint Chelsea's spending to being as near to Benitez's as possible when anyone with access to google knows otherwise!
So come on Jaimie, you've got access to the figures, who did Chelsea sell in 2008-2009 which accounts for a £69m sales figure?
Whether you think you've been balanced here is your POV, you know full well if comparing NET profit/loss for transfers Chelsea blow us out of the water, you've included the complete CLUB intangible fixed assets data to purposely muddy the waters.
Here's one undeniable fact for you, Chelsea's squad cost in 2008/09 - £252,910,000, Liverpool's cost - £154,040,000.
I really don't see how you can even attempt to portray Chelsea as being our not so rich cousins!
Chelsea recouped £34.9m in player sales for the 2008/09 period, please provide EVIDENCE how you arrive at £69m. I think you know full well that figure isn't just transfers.
Chelsea only spent £26.8m in 2006-07 did they Jaimie? Well that's rather surprising considering Schevchenko was £30m alone! And then you've got the additional costs of Kalou, Bohlahrouz & Cole!
Admit it Jaimie, you know for a fact the "evidence" you've provided isn't just transfers and that's why you've used that specific data - to make Benitez look as bad as possible.
Anon - with respect, you seem to misreading the policy. Players i.e. intangible fixed assets - are mentioned in several different places in the accounts. The section I use is for absolute values, i.e. money received/recouped. Everything else is irrelevant; how the club itself values a player, or how the club feels a player has depreciated, is irrelevant.
ReplyDeleteThe amount of money spent and received still has to be accounted for accurately for tax purposes. This means an exact monetary figure for money received/recouped during the year must be included.
This is the same principle for all sets of accounts, whether it's football or business. If money is spent or received, the exact figures must be stated somewhere in the accounts document.
Kopite - the key word here is DISPOSALS. The accounts do not say TRANSFERS; they say 'disposal of player registrations. This is how clubs account for transfer spend (and all the nuances that go into transfer spend,) not me, so there's no point getting on your high horse about. Transfer spending is a lot more complicated that just buyinmg and selling players.
ReplyDeleteI don't need to prove anything about the 68m - it's an amalgamated figure and it's fact - it comes from Chelsea's own accounts, and there I've posted the snippet in the article.
For the transactions they completed over a 12 month period to reach that figure, you'd have to ask them. the figure is not broken down/itemised.
The same principle applies to Liverpool and our figures: anything relating to transfers. player contracts etc is included in the disposal figure. That is normal accounting policy and has been for decades.
And don't accuse me of twisting anything - comparing Liverpool's transfer spending with other top clubs during the riegn of Benitez is the *no 1* requested stat analysis on the site. I'm doing this series because people have constantly asked for it, via the comments and by email.
I have drawn no conclusions from the comparisons so stop trying to read stuff into the post that just isn't there. The only comment I made about Chelsea v Liverpool was about the net spend argument. I tried to illustrate how Chelsea's low net spend makes a mockery of those who use that argument. And if you read my comments *properly* instead of misinterpreting them, you would see that I actually highlight Chelsea huge GROSS spend compared to Liverpool's.
And Kopite - before you continue your ill-informed ravings, perhaps you should try and appreciate the concept of accounting years, as distinct from the summer transfer window.
ReplyDeleteThe accounts record *every* transfer related transaction over a 12 month period. For Chelsea, it's everything from 30 June to 30 June each year. That takes in the summer and january transfer windows, and the first part of the next summer transfer window.
Good post fraggs. Interesting that JK didn't bother to respond to it.
ReplyDeleteGary - you seem to ignore the 7+ times I responded to Fraggs' posts yesterday. I have a job too, you know. I can't respond to every single post for obvious reasons. I don't have to respond to every post - there are other posters here to you know. Plus, sometimes I read a post and agree with it, so there's no need to respond.
ReplyDeleteAnd Kopite - You should try and appreciate the concept of accounting years, as distinct from the summer transfer window.
ReplyDeleteThe accounts record *every* transfer related transaction over a 12 month period. For Chelsea, it's everything from 30 June to 30 June each year. That takes in the summer and january transfer windows, and the first part of the next summer transfer window.
Yes, IFA's are mentioned all over the place but as you know when reading annual reports the Account Policy is how the Finanical accounts are based on.
ReplyDeleteHave a look at FRS 10 Intangible Assets if you want to see treatment of disposals. I have before you ask... That's why I know you have made a mistake.
Your Second to last Para explains my caculation because it ties in with the accounting policy... Sorry to keep on going on about Accounting Policy!
You mention about a club valuing players? Well you get that information from Cost Additions so that is relevant. Again the Policy explains what is included in the Cost Additions... I.e. Fee Paid etc...
The reason Depreciation is revelant when you don't have the absolute number received
FYI, I've not misinterprated the accounting policy... you just need to take everything into account.
I don't want to take anymore of your time on this but if you could give my calculations and the 2008 annual accounts to another accountant (Someone who is Qualfied and working in Practice) than the one you have mentioned... You will find out I am right!
The Disposal figure is not cash received it's the Cost value coming out of balance sheet.
Last thing... Are you saying Rafa recouped £75M (45.2M + 29.7M) From 1st Agust 2008 to 2009 included Post Balance Sheet Events?
No. From 1st August 2008-1st August 2009, 45.2 was recouped (this includes everything asociated with the disposal of players). the 29.7m in post balance sheet events is just for information only. It falls within the 1 August 2009-1 August 2010 accounting year, so cannot be included in the 2008-9 account figures. It will show up in the 2009-10 report.
ReplyDeleteWe will have to agree to disagree on this. I've had the figures checked by an accountant who specialises specifically in football accounting.
Ok... All I ask is one favour then...
ReplyDeleteAsk your accountant friend the following.....
Let's assume only one player is acquired over 5 years:
Yr 1 you pay £10M
Yr 3 Sell him for £5M
IFA NOTE
Accounts: Yr1 Yr2 Yr3
Cost B/FD (M) 10 10
Additions 10 - -
Disposals - - (5)
Balance: 10 10 5
What happens to the balance at in Yr 3 as you don't have any other headings within Cost to use? based on Additions and Disposals are Cash values?
We know you can't carry an asset value which you don't have...
Let me know.
I'll do that, but as I already explained: you're looking at it in the wrong way. The additions/disposals section is nothing to do with depreciating player values. It is the amount of money paid and received in real terms for the asset. Irrespective of what happens between yr 1 and yr 3, if X team pays 20m for player Y, then that is a real monetary figure which will be recorded in the accounts.
ReplyDeleteOkay, I'll do that, but as I already outlined: The additions/disposals section is nothing to do with depreciating player values. It is the amount of money paid and received in real terms for the asset. Irrespective of what happens between yr 1 and yr 3, if X team pays 20m for player Y, then that is a real monetary figure which will be recorded in the accounts.
ReplyDeleteAt the end of the day, to obtain an accurate figure of money spent and received, we should only be interested in the 8actual* amount of money received and spent. Regardless of what happenes to a player's value of over the years, when all is said and done, the club still receives an exact monetary figure for the player, and club's pay out exact monetary figures for players.
ReplyDeleteI do agree with what you are trying to achieve...
ReplyDeleteMy example is only looking at the Cost Section of IFA Note...
I agree with Looking for and working with Actuals... but Disposal in The Cost section isn't actual money received.
Many Thanks for your time! :)
Thank you for taking the time to outline your thoughts on the issue :-) I'll check into what you've suggested. It's always good to get a different POV on the figures.
ReplyDeleteIt's not a dig JK, I read through the thread and your responses to fraggs. I think that he raised some very good points in his last post and thought it odd that despite responding to his other points you didn't respond to this one.
ReplyDeleteYou say that we had the team capable of winning the league and you blame Rafa for not winning it. Although they "may" have been capable, fraggs makes the point that there were two better teams than us when Rafa took over, Chelsea and Man Utd, who had spent more money than us in the years before Rafa became manager and have continued to spend to improve their squads since. Regardless of the gross or net figures since 2004, Rafa and Liverpool have not only had to play catch up in with those teams but also try to better two squads that were better and more expensive than our own. I think this is a very valid point and I'd like to hear your opinion on this. Its all very good comparing how much money has been spend since 2004 but for Chelsea and Man Utd it is also important to look at how much had been spent in the seasons before as they were both the main contenders for the league when Rafa joined us.
2004 was not a blank slate; you can't disregard the fact that Chelsea and Man Utd, who are the only teams to have won the league since Rafa has been here, already had the squad capable of winning the league and have continued to add to it. Chelsea bought the likes of Makalele, Robben, Duff, Mutu, Cech, Cole, Ferriera, Crespo, Veron and Bridge the season before Rafa joined. Man Utd already had bought players such as Van Nistelroy, Ronaldo, Ferdinand, Rooney as well as their long term stars such as Giggs, Scholes, Neville etc.
No one said there is a <span>100 % correlation</span> between wages and where you end up in the league either.Chelsea ended first this season,did they not ? And Man Utd ended second,did they not ? That's first and second in terms of wages also,isn't it ? And the same thing happend when Chelsea last won - 1st and 2nd in the league,1st and 2nd in wages ?
ReplyDeleteWe beat Chelsea last year but have ended up behind them in the league in five of the last six seasons - and still you pick that one season to prove your point ? What about the rest of the seasons ?
I agree, gary - Fraggs made some great points, as you have also. I will respond to Fraggs' points when I have time, probably later tonight.
ReplyDeleteI appreciate the concept of accounting years Jaimie, I work in the industry although not as an accountant, I do work with several.
ReplyDeleteThe figures you've quoted are NOT transfer fees alone and therefore your heading "Rafa Benitez v Chelsea: Transfer spending comparison" is completely misleading.
Why didn't you use these figures when comparing Benitez spending to the other Clubs?
You know full well the figures you've quoted for profit and loss are not SOLELY for transfers they include other things like the termination of a player's contract which would have cost X amount in the future had it run its course, this is then listed as an amount "re-couped" - which massively screws the data. Using the data you have Schevchenko would be LESS of a loss because AC Milan paid part of his wages during his loan spell, and the same would be applied to Veron, Jarosik, Forssell, Carlton Cole & Hernan Crespo previously.
If you were going to be fair you'd have broken down the spending ALONE offset against the funds recouped via sales ALONE, you've purposely avoided doing this in order to make the figures much closer than they would have been, again, your title is completely misleading.
I'm not saying Clubs do break each individual player purchase down into a seperate amount but often they do release the figure paid, it doesn't take a rocket scientist to work out Chelsea DID NOT recoup £69m in player sales during 2008-2009, if so please provide the evidence or change your articles header as it's obfustication.
I'm not arguing with the data you've provided, simply how you've manipulated it to suit your argument.
You don't like Benitez, fair enough, but you've used the data as a means to try and show that Chelsea have only spent £8m NET more than Benitez since 2004?! I mean seriously Jaimie, on what planet would that be an accurate conclusion?
I appreciate the concept of accounting years Jaimie, I work in the industry although not as an accountant, I do work with several.
ReplyDeleteThe figures you've quoted are NOT transfer fees alone and therefore your heading "Rafa Benitez v Chelsea: Transfer spending comparison" is completely misleading.
Why didn't you use these figures when comparing Benitez spending to the other Clubs?
You know full well the figures you've quoted for profit and loss are not SOLELY for transfers they include other things like the termination of a player's contract which would have cost X amount in the future had it run its course, this is then listed as an amount "re-couped" - which massively screws the data. Using the data you have Schevchenko would be LESS of a loss because AC Milan paid part of his wages during his loan spell, and the same would be applied to Veron, Jarosik, Forssell, Carlton Cole & Hernan Crespo previously.
If you were going to be fair you'd have broken down the spending ALONE offset against the funds recouped via sales ALONE, you've purposely avoided doing this in order to make the figures much closer than they would have been, again, your title is completely misleading.
I'm not saying Clubs do break each individual player purchase down into a seperate amount but often they do release the figure paid, it doesn't take a rocket scientist to work out Chelsea DID NOT recoup £69m in player sales during 2008-2009, if so please provide the evidence or change your articles header as it's obfustication.
I'm not arguing with the data you've provided, simply how you've manipulated it to suit your argument.
You don't like Benitez, fair enough, but you've used the data as a means to try and show that Chelsea have only spent £8m NET more than Benitez since 2004?! I mean seriously Jaimie, on what planet would that be an accurate conclusion?
I appreciate the concept of accounting years Jaimie, I work in the industry although not as an accountant, I do work with several.
ReplyDeleteThe figures you've quoted are NOT transfer fees alone and therefore your heading "Rafa Benitez v Chelsea: Transfer spending comparison" is completely misleading.
Why didn't you use these figures when comparing Benitez spending to the other Clubs?
You know full well the figures you've quoted for profit and loss are not SOLELY for transfers they include other things like the termination of a player's contract which would have cost X amount in the future had it run its course, this is then listed as an amount "re-couped" - which massively screws the data. Using the data you have Schevchenko would be LESS of a loss because AC Milan paid part of his wages during his loan spell, and the same would be applied to Veron, Jarosik, Forssell, Carlton Cole & Hernan Crespo previously.
If you were going to be fair you'd have broken down the spending ALONE offset against the funds recouped via sales ALONE, you've purposely avoided doing this in order to make the figures much closer than they would have been, again, your title is completely misleading.
I'm not saying Clubs do break each individual player purchase down into a seperate amount but often they do release the figure paid, it doesn't take a rocket scientist to work out Chelsea DID NOT recoup £69m in player sales during 2008-2009, if so please provide the evidence or change your articles header as it's obfustication.
I'm not arguing with the data you've provided, simply how you've manipulated it to suit your argument.
You don't like Benitez, fair enough, but you've used the data as a means to try and show that Chelsea have only spent £8m NET more than Benitez since 2004?! I mean seriously Jaimie, on what planet would that be an accurate conclusion?
Kopite - you're wrong about the contract termination thing. I'm sorry, but you are. The accounting policies included in each club account report contradicts what you're saying. Or are you suggesting they've got it wrong?
ReplyDeleteWhy didn't you use these figures when comparing Benitez spending to the other Clubs?
What are you talking about? The exact same figures have been used in Benitez's spending. All clubs account for transfers in the same way: Inatangible fixed assets/Additions + Disposal etc.
Nothing has been manipulated at all - just because you say it has doesn't make it so. And most of the things you've mention about Shevchecko, Crespo/Milan/wages etc is pure supposition, and unbacked by any other evidence other than your opinion.
Chelsea are under a legal duty - like every other club - to declare true and accurate accounts. The additions/disposals section for intangible fixed assets is specfically for the 'cost of acquiring/disposing of player registrations'. This is stated explcitly in the accounts. As such, correct monetary figures have to be included.
In Between 30 June 2008, and 30 June 2009, Chlelsea recouped 69m. How they did it, I don't know. Player contracts are supremely complexe these days, and money becomes payable from various clubs at different times. It's entirely conceivable that a whole raft of transfer fee installments became payable during that year. Who knows. What I DO know is that Chelsea's transfer figures are fact, and cannot be disputed.
You are annoyed because Benitez doesn't come out of it looking as good as you hoped, so you're trying to find ways to discredit the figures in order to make him appear in a better light.
And re net spend: IT IS IRRELEVANT. Why do you even bring it up? What matters is how much Chelsea have spent GROSS, and it is considerably more that Liverpool.
ReplyDeleteAnd I do not 'dislike' Benitez the man. This is not personal, even though you and others are determined to try and make out that it is. I have a problem with Benitez in his capacity as Liverpool manager. That is it.
Not at all Jaimie, I'm not interested in a Pro/Anti Benitez argument as it's a complete waste of time. It's like an arguement between a person who thinks butter is the best and another who thinks marg is the the best, it'll never reach a conclusion, complete futile.
ReplyDeleteI'm interested in this comment of yours:
"In Between 30 June 2008, and 30 June 2009, Chlelsea recouped 69m. How they did it, I don't know. Player contracts are supremely complexe these days, and money becomes payable from various clubs at different times."
Money becomes payable at different times? But in a previous articles even when provided with sufficient evidence to suggest WE are paying Aquilani's fee in installments you completely ignore this evidence and claim that we've paid £20m for Aquilani already? You can't have it both ways Jaimie, and this is what I mean when I say you manipulate data to your own requirements.
"Player contracts are supremely complex"
Hmmm, but not when your using them as a means to make your point are they? You refused to believe that Aquilani's fee was being paid in installments in another thread, despite evidence from Roma stating that fact! Instead, you chose to believe that we'd paid the full fee for Aquilani just 6 months (pre end December 2009) after he'd signed in a time period were he was mostly injured?
You can't spin it both ways Jaimie, everything can't be black & white when it suits you, but "supremely complex" when it doesn't.
I've looked into the figures for Chelsea's player sales during 2008-2009 it's in the region of £30m, so where does the other £40m come from, are you actually suggesting that £40m worth of "add-ons" or installments became payable during that time frame? Your argument in this case is based entirely on supposition and not fact.
Not at all Jaimie, I'm not interested in a Pro/Anti Benitez argument as it's a complete waste of time. It's like an arguement between a person who thinks butter is the best and another who thinks marg is the the best, it'll never reach a conclusion, complete futile.
ReplyDeleteI'm interested in this comment of yours:
"In Between 30 June 2008, and 30 June 2009, Chlelsea recouped 69m. How they did it, I don't know. Player contracts are supremely complexe these days, and money becomes payable from various clubs at different times."
Money becomes payable at different times? But in a previous articles even when provided with sufficient evidence to suggest WE are paying Aquilani's fee in installments you completely ignore this evidence and claim that we've paid £20m for Aquilani already? You can't have it both ways Jaimie, and this is what I mean when I say you manipulate data to your own requirements.
"Player contracts are supremely complex"
Hmmm, but not when your using them as a means to make your point are they? You refused to believe that Aquilani's fee was being paid in installments in another thread, despite evidence from Roma stating that fact! Instead, you chose to believe that we'd paid the full fee for Aquilani just 6 months (pre end December 2009) after he'd signed in a time period were he was mostly injured?
You can't spin it both ways Jaimie, everything can't be black & white when it suits you, but "supremely complex" when it doesn't.
I've looked into the figures for Chelsea's player sales during 2008-2009 it's in the region of £30m, so where does the other £40m come from, are you actually suggesting that £40m worth of "add-ons" or installments became payable during that time frame? Your argument in this case is based entirely on supposition and not fact.
Not at all Jaimie, I'm not interested in a Pro/Anti Benitez argument as it's a complete waste of time. It's like an arguement between a person who thinks butter is the best and another who thinks marg is the the best, it'll never reach a conclusion, complete futile.
ReplyDeleteI'm interested in this comment of yours:
"In Between 30 June 2008, and 30 June 2009, Chlelsea recouped 69m. How they did it, I don't know. Player contracts are supremely complexe these days, and money becomes payable from various clubs at different times."
Money becomes payable at different times? But in a previous articles even when provided with sufficient evidence to suggest WE are paying Aquilani's fee in installments you completely ignore this evidence and claim that we've paid £20m for Aquilani already? You can't have it both ways Jaimie, and this is what I mean when I say you manipulate data to your own requirements.
"Player contracts are supremely complex"
Hmmm, but not when your using them as a means to make your point are they? You refused to believe that Aquilani's fee was being paid in installments in another thread, despite evidence from Roma stating that fact! Instead, you chose to believe that we'd paid the full fee for Aquilani just 6 months (pre end December 2009) after he'd signed in a time period were he was mostly injured?
You can't spin it both ways Jaimie, everything can't be black & white when it suits you, but "supremely complex" when it doesn't.
I've looked into the figures for Chelsea's player sales during 2008-2009 it's in the region of £30m, so where does the other £40m come from, are you actually suggesting that £40m worth of "add-ons" or installments became payable during that time frame? Your argument in this case is based entirely on supposition and not fact.
Thanks for your comments.
ReplyDelete1. My argument is not based on supposition at fact. The core issue here is money chelsea recouped between 30 June 2008 and 30 June 2009. According to Chelsea's accounts for that year - official LEGAL documents - they recouped 69m. it doesn't matter what you or I think, that is a fact.
You say you've looked into Chelsea's sales for that year. What are your sources? Newspaper reports, no doubt. That is not credible research. You do not know:
1. the exact dates players were sold
2. The exact dates installements became payable
3. The details of Chelsea's youth purchases, agents fees, signing-on fees etc.
None of this is in the public domain. The only evidence that *is* public is the combined figure contained in the club accounts.
neither you nor I can argue againnst it. it is irrefutable fact.
2. You've strayed from the issue and brought things into this particular discussion that have absolutely nothing to do with it. Aquilani's fee? Completely irrelevent to this discussion.
The Roma evidence is not a legal document. Liverpool's accounts for 2008-9 ARE legal documents, thus if the accounts state Aquilani has been paid for, I will believe it. I think that's reasonable.
How can u class Alex a flop ?!? Hes rock solid and NOT 15m.. Paulo was d rite bk in the title winning teams of chelsea.. Not spectacular but a true professional.. Does a solid job when called upon and never complains of a lack of matches !!! There are other flops u can mention like Sheva, Del Horno, Tiago, Smertin, Boula.. Get ur facts rite !!!
ReplyDeleteI understand what you're saying Jaimie but you are summising that the figure includes future payments from previous sales etc, you can't prove that.
ReplyDeleteIt's my opinion that the "disposals" could include a player's contract that has become void and other such costs, I've e-mailed one of our accoutants to verify this possiblity so I'll let you know.
I suppose my main point is that through player transfers alone there is ZERO chance that Chelsea have only spent £8m NET more than Liverpool since 2004, there's just no way, the information is out there to prove it and other accountants in football have Chelsea's NET spend very different to how you're attempting to portray it here.
As I've said, the headline of the article is very misleading as it doesn't include just revenue made or used via selling/buying players, there are many other factors at work.
I understand what you're saying Jaimie but you are summising that the figure includes future payments from previous sales etc, you can't prove that.
ReplyDeleteIt's my opinion that the "disposals" could include a player's contract that has become void and other such costs, I've e-mailed one of our accoutants to verify this possiblity so I'll let you know.
I suppose my main point is that through player transfers alone there is ZERO chance that Chelsea have only spent £8m NET more than Liverpool since 2004, there's just no way, the information is out there to prove it and other accountants in football have Chelsea's NET spend very different to how you're attempting to portray it here.
As I've said, the headline of the article is very misleading as it doesn't include just revenue made or used via selling/buying players, there are many other factors at work.
I understand what you're saying Jaimie but you are summising that the figure includes future payments from previous sales etc, you can't prove that.
ReplyDeleteIt's my opinion that the "disposals" could include a player's contract that has become void and other such costs, I've e-mailed one of our accoutants to verify this possiblity so I'll let you know.
I suppose my main point is that through player transfers alone there is ZERO chance that Chelsea have only spent £8m NET more than Liverpool since 2004, there's just no way, the information is out there to prove it and other accountants in football have Chelsea's NET spend very different to how you're attempting to portray it here.
As I've said, the headline of the article is very misleading as it doesn't include just revenue made or used via selling/buying players, there are many other factors at work.
Hi Jamie,
ReplyDeleteI've found you and your accountant another example...
Totteham's 2009 Annual Accounts.
Your Figures show:
Additions in the year: £119.30M
Disposal in the year: £43.292M
Page 21: Chairman's review. The numbers are legal as the P&L and Notes to the accounts.
Additions in the year: £119.30M
Disposals in the year: £72.50M (Note 8 Page 45 uses the word proceeds amount)
My Figure for the year would be:
Additions: £119.30M - £32.50 (2009 Closing Trade Creditor Balance) + 16.50M (2009 Opening Trade Creditor Balance) = £103.30M
Trade Creditor Balance from Note 17 Page 49
Disposals: £56.5M + £43.3M - £27.3M = £72.50M - £25.0M (2009 Closing Trade Debitor Balance + £15.60M (2009 Opening Trade Debtor Balance) = £63.1M
Trade Debtor Balance from Note 15 page 48.
The inclusion of Trade Debtors and Creditors linked to Player additions and disposals is to get back to actual cash received/spent in the year.
Net Spend:
Your Calculation: £71.50M
My Figure: £40.20M
Other comments: Page 24 gives a breakdown of profit made on disposal. Robbie Keane to Liverpool - £17.50M. Berbatov to Man U £23.4M
I'm not trying to prove Rafa spent more or less but looking for correct figures... My calculations would change the figures for all the club accounts you have looked at including Liverpool.
Thanks,
Jamie u seem to be taking into account the cisse transfer which wasn't a Benitez signing. Also I understand that u are merely comparing like for like in terms of transfers but it's a bit simplistic to do so when you take into account that robben, duff, chech, bridge,Johnson, j cole and many more were bought by Ranieri in 2003 at the cost of a 100+million. Mourinhio then moved on some of these players which were surplus to requirements, skewing his net spend figures. If Benitez had for instance not inherited such a poor squad he would have been able to recoup more money, and if he had been able to sell Owen at his true value rather than the 8 mill due to length left on his contract.
ReplyDeleteThat's just my opinion but surely these factors need to be taken into consideration....
Great details posted Jamie, I've seen this one and the Man U comparisions.
ReplyDeleteThanks for these.
I think a few of the posts I've glanced have addressed some of the points I would raise;
1. The squads prior to Rafa arriving, ie Cheski had spent millions in the 2 years before Rafa, United too.
2. The wages matter in so much as Chelski were able to attract players at the end of their contract, based on the wages they could offer (ie. Ashley Cole, M Ballack & Deco) similar to Joe Cole this year, although I wish LFC did not get Joe Cole as I think he is overated as are most English players (Glen Johnson at 18MILL!???)
3. In the United comparisons I dont think the inflation calculator really reflects the true picture. I think an interesting comparison would be what did united buy in comparison to others at the time, I seem to remember Fergusons first years included a few British record transfers and a few record transfer for players in their positions and a few highest transfers for that season (ie, most expensive defender, full backs, etc) whereas Rafa never had 1 record transfer, or even the highest transfer for the season, even when he bought Torres.
On the whole I think Rafa did well as indicated by your comparisons in terms of results compared to Fergie. He could have won us the league a couple of years ago and probably would have if it weren't for putting pressure on ourselves with the infimous rant, but at the same time, as pointed out by a few of the post's not even Wenger has got close to winning the league in the last 6-7 years even with 10+ years at the helm to put in place youth system.
Hope Hodgson does well!
If you're a businessman, you'll understand "TIMING" of investment is crutial.
ReplyDeleteIn the world of captialism, if you've a huge investment against your opponent at the right timing, your opponent cant' match you.
Timing is the factor that you can't compare with mathematics.
Notice 2004-2006, Chelsea has huge investment so their team can settle, not need to be struggle in the transfer market anymore for years. Unlike Rafa who has to circulate his money every year, trying to buy the right players at affordable price.
However, Rafa's performance is excellent comparing to money he's got, in 2005-2006, Chelsea net spent is almost 100M to be the 1st while Rafa spent only 5M to be the 3rd!
Could you imagine if Rafa has got net spend 100M in 2005-2006, what'll happen to Liverpool FC?
TIMING IS MUCH MORE IMPORTANT THAN THE AMOUNT OF MONEY!!!!!!
Friends, don't be misled by just the amount of money!
How on earth do you get those figures for chelsea 04-09 "Recouped £245.2m", according to all the figures ive come across they recouped around £79m between 04-09, a massive gulf in the figures youve posted.
ReplyDeleteI got the figures directly from Chelsea's own financial accounts. The figures are correct, whether you like it or not. The accounts do not lie.
ReplyDelete