05 Jul 2019 11:44:47
I'm not the biggest Radz fan as everyone knows but equally I think he's a better owner than we've had for quite some time . I've been doing a bit of thinking about our financial situation, especially regarding EFL FFP rules, as it's always being blamed for why Radz can't invest more and why we've had no choice but to cash in on the likes of Wood, Viera and now Clarke.
Leeds FFP summary
The bottom line is that every champ team can not exceed a rolling three year period of losses of a combined £39 m . Up to this level, however, owners can pump in cash in the form of equity to extinguish those losses hanging around on the balance sheet and meaning a club would otherwise be affectively trading insolently . In 16/ 17 we made a profit of circa £1 m and in 17/ 18 we made a loss of circa £4.5 m . But this masks significant operating losses only partially made up by the said and other player sales . No one knows for sure what the results will be for the season just finished until they are published but it's extremely likely that operating losses will be even higher than last year after the acquisitions of the likes of Bam, Douglas and Casilla on big salaries . Hence the need to sell JC and very little cash for player acquisitions without further sales .
All this means that we are unlikely to see anymore permanent incomings unless we lose players . The obvious contenders in my view being KP, Pontus, Roofe or Forshaw unless a big offer comes in out of the blue for some one else . This of course assumes that we can't get much cash for the likes of Saiz and all the other dead wood . My personal preference would be to sell Forshaw to fund the likes of the young Croat, or some one like Mo Besic or Luongo at QPR .
So a few conclusions -
- It does appear that right now even if a rich Arab owner came in, their hands would be largely tied by our financial situation and FFP, at least in the short term .
- Whilst this partially let's Radz off the hook from some criticism, we should not forget how wasteful he and Orta were in their first year buying a dozen or so poor foreign imports - Sacko £1.5 m, De Bock £1.5 m, Saiz £3.5 m, Wiedwald £ 0.5 m, Ekuban £0.5 m, Anita free but wages and agents fees, Ideguchi £0.5 m, Bouy ( unknown ), Halme £0.5 m, Grot £1m, Cibicki £1.5 m etc . Plus the big contracts handed out to the likes of O'Kane, Dallas, Berardi, Pearce etc . This profligacy has contributed significantly to our operating losses and issue now with FFP . Most of these payers are still on the books and costing us wages even if partially offset by loans .
A foot note on the purchase of ER . Wex and others keep banging on about the fact Radz bought it in a separate company . There are two counter arguments . Firstly, if he pumped the cash into the club to buy the ground it may have affected FFP, as it would be an expense in the P&L, although there appears to be an exception for infrastructure costs . I'm not 100% on this point, perhaps others know? Secondly, I recall GFH were still owed money for their shares at the time of the purchase of ER, based on the value of the club . If Radz had funded the club to buy ER, he would have had to pay more to GFH . Surely no one would have wanted that!
05 Jul 2019 12:12:24
Which is why the JC deal (we got money to balance FFP books but get his services too) and Costa (we only part with cash to buy NEXT SEASON) are for me both great pieces of business in the FFP environment.
If pontus goes I expect to get a, replacement as once he goes we have money within our FFP budget to use - same for KP.
Personally I like FFP and also like the Championship money games taking place.
05 Jul 2019 12:16:07
Best post all summerRHC. I sometimes disagree with your thoughts but then you got me back with some sound facts. Hope your are correct with your calculations as it is a balancing act all around and a good and smart owner will put his dna into how it runs and he ain't done bad elsewhere. MOT.
05 Jul 2019 12:36:30
RHC, welcome to the real world, doesn’t your post just summarise what a number of people have been saying for some time on here. You seem to have had a dramatic conversion in relation to Radz. Point is, it’s not all negative, lots of good stuff has been going on but errors have been made. That tends to be what happens when you have humans on board. Pleased your feeling more positive!
05 Jul 2019 12:44:35
What RHC said
Only points of issue with FFP are
Parachute payments give a massive help to recently relegated clubs. I know why they get them and understand they have to be there but. it does mean we can’t compete for the same players and wages as the likes of WBA and Stoke last year
When you exceed spending allowed under FFP but make it to the premiership, you’re then seemingly outside the rules ( wolves )
05 Jul 2019 13:13:31
RHC
Your not the real RHC
Give him back to us, you Doppelganger
Were not stupid. We can tell.
Be off with you, you alien abductor thing
In seriousness, that is a really good piece of research. It actually gives we a decent feeling that we AREN'T being run by imbeciles, at last.
I also agree that quite a few of their bargain buys of a couple of seasons ago haven't really come off, but I think they weren't a million miles away there, either.
They bought Ekuban for £500k and are selling him at £2m
They bought Alioski and he has been a huge success
They bought Saiz and he was worth about £10m until he first spat at an opposition player and then decide he didn't want to be in this country. Don't think we can hold Radz/ Ortz to task on that one
Also you've got to remember they were the ones that have brought in Kun, Struik, Edmondson, Stevens and Davis (who was a reported £4m target for liverpool) .
With you on the others that you name checked, but it's not all doom and gloom.
05 Jul 2019 13:18:58
RHC Top posting.
05 Jul 2019 13:19:42
Fair response on the player acquisitions Axe .
05 Jul 2019 13:20:02
Another stunner Axe! We can’t be too critical of him I suppose , the power of positive thinking and the happy crowd have caused him to turn his back on the dark side and swap the sidecar of doom for the hot tub of hope! I think we’re going to need a bigger tub! I only Told you to blow the bloody tub up!
05 Jul 2019 14:03:02
With those figures in mind that means we could have spent 20mill on players this window and still be within FFP rules coupled with forecasted annual loss. Wages come into but we are offloading quite a few players and have money from Clarke, Ekuban, and probably Wilks plus Halme. So in effect by your calculations it was possible to invest more this window. Do not get me wrong i am quite happy with the business we have done but window not over yet and if Pontus, KP and Roofe go i will not be so happy. Agree Radz is financially very astute but that is what Aser are set up to do, improve the stability of their purchases. So although you can use these figures to promote Radz as doing well you could also use them to show underinvestment if we are still in this league after next season, which we will not be. Onwards and upwards.
05 Jul 2019 14:18:11
Bielsabud that’s incorrect unfortunately . We only made the trading loss of £4.5 m last year due to player sales ( Wood instalment, Viera ) , operating loss much higher . Some experts talking of an operating loss of around £20 m plus this year, won’t know until accounts are published . That’s why transfer budget is so limited .
05 Jul 2019 16:17:26
Hard to call ffp, one thing we know as rads said it. there are ways round ffp. Leeds can do this like other clubs. rads don’t want to, this is lack of money or ambition. rads can’t hide behind ffp when the rules are so easy to bend.
05 Jul 2019 16:36:32
I’ve been saying this for a while but the bottom line is that Radz could raise spending significantly if he invested in the club but he won’t do that. The only finding is what we generate as a club incl. player sales. My gripe is that as owner he should be putting his own money in to get us to where we need to be.
05 Jul 2019 17:45:00
That’s a great post, based on some detailed research RHC! good stuff that man!
05 Jul 2019 18:39:47
Rhc i think i did mention we have sold JC, Ekuban, Halme and Wilks on his way which i reckon would be the same as Viera and Woods installment. Also offloading quite a few players for free and i know Costa and Kikos wages are higher and Bam Bam but the departures will offset some of this. 20 mill deficit for last season you reckon, think that is a bit high. If that is correct then you have a point, if not then Radz may be more astute than we all think.
05 Jul 2019 18:42:26
I still don’t understand how it wotks.
05 Jul 2019 19:37:47
Bielsasbud go on twitter and check out Swiss Ramble . Great summary of last year’s accounts . That’s the season ending May 2018 . We made an operating loss of some £20 m before player trading . This season ending May 2019 with the extra higher earning players and Bub and his team we are scheduled to make operating losses of £25 m plus . With similar operating costs for next season ( with Bub and his team staying on another season etc ) we will be making another operating loss of circa £25 m plus . So by the end of next season if we don’t go up we will be very close to an FFP breach without substantial player sales next Summer . With the £15 m commitment for Costa next Summer, we would need to make probably two big sales . If you think about it like that, Radz is actually betting on getting up next season, which I’m kinda happy about . Once again to be clear it would n’t make any difference how much Radz is prepared to invest of his own money, if we make losses of over £39m in any three years we will be screwed by the EFL . And dont’t you just know they would give us Brum punishment plus plus!
05 Jul 2019 20:57:25
Yes operating loss i understand that's why we need to sell to bring that down. Last year we had 20mill you say but finished just 4.5 mill loss after player sales. We have sold players now so that 25mill will come down as well. Its taken over 3 years i think so last three years we had minus 3.5 plus whatever this years is. So if we are still here after next season it would be minus 3.5 +this year +next year. as long we are in this division we will be selling players every year.
06 Jul 2019 01:10:05
What we are entering in to at the moment is a one year plan for Radz and Bielsa. Orta might be here longer but probably not if the others both go so he has to try and facilitate plans to make it happen. That doesn’t mean that we aren’t doing things for the future but the decks are being cleared for a big push for promotion this year. That to me seems clear. The one year plan is pretty strong, after that it’s a gamble depending on where we are playing. To be fair that’s what most people seem to want and as we are going to be doing it the Bielsa way it should be fun.