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Legal-Software t1_ixif54r wrote

The fact that the amortisation and depreciation are double the operating loss suggests more that this has been engineered in such a way to put a loss on paper and reduce the tax liability. This is why things like EBITDA are important, so you can get a general overall sense of their totals before they've had the opportunity to "optimise" the balance sheet.

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wanted_to_upvote t1_ixitmjv wrote

They are likely cash flow positive and their value is increasing each year.

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burnshimself t1_ixj9zxe wrote

They are not cash flow positive, they’ve needed to take out debt to fund the business nearly every year.

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wanted_to_upvote t1_ixjt4xs wrote

The debt may be to buy capital goods and expand future business which would not make it cash flow negative if they can make the payments on it.

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burnshimself t1_ixjuca5 wrote

It’s not doing that, it’s a football club. They don’t have any capital equipment of note to invest in, they are not a manufacturing business. Their only property is their stadium, which is a fraction of their spending (8m in FY2022) compared to their acquisition of contracts and intangibles spend (115m in FY2022). The amort is real business expense that gets consumed once the player’s contract expires. The team is a money pit.

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33Marthijs46 t1_ixiv009 wrote

This summer Manchester United bought Antony for roughly €100 million. They gave Antony a 5 year contract. So the transfer sum gets depreciated over the duration of the contract. This has nothing to do with dodging taxes this is just the way the finances work for a football club.

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burnshimself t1_ixjacic wrote

You have a very loose understanding of the accounting concepts here. They are cash flow negative, this isn’t just amortization coming off some long held or stepped up intangible. Their amort is the expensing of acquired player contracts, which they have to pay actual cash for, so it isn’t just a tax shield they’ve fabricated. If you look on a cash basis (eg swap out D&A for Capex and acquisition of intangibles) the business is still CF negative.

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belanaria t1_ixksoed wrote

So the amortisation is players and their contracts

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