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chicagotim1 t1_j6q8k6h wrote

It's very odd that Match Day alone posts a not loss.

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Square_Tea4916 OP t1_j6q8ry8 wrote

Replying to Kanuddie (#1,694,110)

I’ve always heard when it comes to owning big sports clubs, it’s expected to take a loss every year in order to grow the club’s overall value cause they make their money on the sale of the franchise.

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currentscurrents t1_j6qgw2g wrote

Replying to Square_Tea4916 (#1,694,126)

> they make their money on the sale of the franchise.

What does this mean? Are they planning to sell the business someday, and they will make their money back when they do so?

If the business is a net loss except when you sell it to someone else, why is anyone willing to buy it? EDIT: I guess people were willing to buy NFTs.

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100LittleButterflies t1_j6qh0ft wrote

The solution is obvious. Increase merchandise and make substantial cuts to employee benefits. This is the way. The American way.

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Square_Tea4916 OP t1_j6qiw0t wrote

Replying to currentscurrents (#1,694,228)

Think they can flip a switch to make it easily profitable. Not buying 1-2 players and not offering as high of wages relative to other clubs.

It’s pretty much like an over-valued tech company - high potential and big brand name.

But also hear owners get extremely favorable tax benefits from being owners in a large depreciating asset.

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Hascus t1_j6qtmyv wrote

It’s only a matter of time before a bunch of American investors buy the rest of the Premier League teams and introduce a salary cap and ads during the game.

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siddus15 t1_j6rcsn5 wrote

Replying to Hascus (#1,694,544)

A closed league absolutely would NOT have succeeded. European fans hate the concept of removing any penalty for poor performance and would have revolting just as much. If losing means nothing then winning also means nothing.

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siddus15 t1_j6rcxst wrote

Replying to Fjelleskalskyte (#1,694,629)

The primary problem with the ESL was the lack of relegation for the founding clubs. PL is proving this season just how competitive it is and, of course, still sits within a traditional tiered structure with other divisions and European competitions.

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thattoheathswiss t1_j6redtb wrote

A split of squad and non squad costs would be very interesting

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rad0909 t1_j6rveg7 wrote

What is this graph type called? I'd like to make one for myself.

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maof97 t1_j6rwl2d wrote

How is this kind of chart called? And where do I find more of it (like for other companies)?

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ClarkFable t1_j6rysdc wrote

Replying to Hascus (#1,694,369)

American investors (the smart ones anyway) know better than to enter a league where there is free entry through relegation/promotion. That’s way too competitive/capitalist for their tastes. They want a well regulated monopoly.

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neutronstar_kilonova t1_j6rz8ds wrote

Next time you're watching a sport, know that you're watching two billionaire/millionaire company fight both aiming to gain your business. Your business for them is your attention, engagement, ad sales, tshirt sales, ticket sales, and your precious time which will not come back.

PS: Jeez I'm starting to sound like my parents when i was little.

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ceelo71 t1_j6s9tkm wrote

Where are the dividends for investors? Is that under Employee Benefits or Financing Costs?

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ceelo71 t1_j6syhfm wrote

Replying to Square_Tea4916 (#1,696,028)

I understand that the Glazers stopped taking dividends in the second half of 2022 due to the optics, but I imagine they are still paying those out to shareholders. Interesting that a business that lost over £100 million still has the cash to pay investor dividends.

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Huberweisse t1_j6tba4h wrote

I wonder how soccer clubs can make any profit and survive this way? Last statistics I have seen of FC Barcelona and Real Madrid also show that they make net losses.

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ThingsCanBeTwoThings t1_j6u4z36 wrote

Replying to [deleted] (#1,697,504)

I think the person pointing out the amortization issue is right, still.

I'm not an expert on the financials, but I believe the specific amount amortized is the capex spent to acquire the contract negotiation rights to a given player. Then that 'transfer fee' gets amortized over the life of contract.

Your point about it being non cash is totally fair, but typically for a large soccer team like this one, capex on transfer fees is a constant annual expense; I'd argue that amortization is close to a maintenance capex level. So even if EBITDA is positive as someone above suggested, free cash flow may not be.

To your specific point, when the contracts expire and the amortization goes to zero, you either have to re-sign the player at a much higher salary (players that sign without transfer fees invariably get higher salaries - the team doesn't have to pay to acquire the rights) or you lose the player and have to go buy rights to another player.

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