NFFC Financial Talk

[Sausage Roll]

We have taken a looa out from the sale of Brennan Johnson. Future installments paid directly to the bank instead of us.

Was reading Kieran Maguire's explanation of it - apparently it's pretty common practice when big transfers occur.

We get the money up front from the bank, albeit less than the actual transfer fee to cover their interest, then they recoup the money from the buying club (Spurs in this case) directly in instalments.

[Paplane]

We have taken a looa out from the sale of Brennan Johnson. Future installments paid directly to the bank instead of us.

Was reading Kieran Maguire's explanation of it - apparently it's pretty common practice when big transfers occur.

We get the money up front from the bank, albeit less than the actual transfer fee to cover their interest, then they recoup the money from the buying club (Spurs in this case) directly in instalments.

Debt factoring. Happens in many businesses to create cashflow.

[ozzyten10]

All clubs do this. Nothing to see really other than it helps with cash flow rather than ffp. Academy players sales count as pure profit for the year for ffp- were just getting the money upfront and paying a charge on it. It is secured against the club though as an unsecured loan would be much more expensive.

[Tricky]

We have taken a looa out from the sale of Brennan Johnson. Future installments paid directly to the bank instead of us.

Was reading Kieran Maguire's explanation of it - apparently it's pretty common practice when big transfers occur.

We get the money up front from the bank, albeit less than the actual transfer fee to cover their interest, then they recoup the money from the buying club (Spurs in this case) directly in instalments.

Does the selling club get interest from the buying club, if payment is being spread over a few years? 

Lets assume you bought something from Currys (why would you do that?), say an expensive cooker or TV and you took it out over say 3 years. You would be charged interest based on the amount the repayment was spread over.

Is this any different?

[Reds73]

We have taken a looa out from the sale of Brennan Johnson. Future installments paid directly to the bank instead of us.

Was reading Kieran Maguire's explanation of it - apparently it's pretty common practice when big transfers occur.

We get the money up front from the bank, albeit less than the actual transfer fee to cover their interest, then they recoup the money from the buying club (Spurs in this case) directly in instalments.

Does the selling club get interest from the buying club, if payment is being spread over a few years? 

Lets assume you bought something from Currys (why would you do that?), say an expensive cooker or TV and you took it out over say 3 years. You would be charged interest based on the amount the repayment was spread over.

Is this any different?

No the selling club and the buying club agree a payment plan. There is no interest involved. You just get the fee agreed, paid by the installments agreed.

[ozzyten10]

It works both ways - our purchases will be similar with clubs borrowing down on payments owed…

[Paplane]

Mike Ashley would often offer the full cash up front as a lever on deals when he bought players.

[Username]

We have taken a looa out from the sale of Brennan Johnson. Future installments paid directly to the bank instead of us.

Was reading Kieran Maguire's explanation of it - apparently it's pretty common practice when big transfers occur.

We get the money up front from the bank, albeit less than the actual transfer fee to cover their interest, then they recoup the money from the buying club (Spurs in this case) directly in instalments.

Does the selling club get interest from the buying club, if payment is being spread over a few years? 

Lets assume you bought something from Currys (why would you do that?), say an expensive cooker or TV and you took it out over say 3 years. You would be charged interest based on the amount the repayment was spread over.

Is this any different?

There is interest charged on the loan so effectively we are worse off longer term.

[Tricky]

We have taken a looa out from the sale of Brennan Johnson. Future installments paid directly to the bank instead of us.

Was reading Kieran Maguire's explanation of it - apparently it's pretty common practice when big transfers occur.

We get the money up front from the bank, albeit less than the actual transfer fee to cover their interest, then they recoup the money from the buying club (Spurs in this case) directly in instalments.

Does the selling club get interest from the buying club, if payment is being spread over a few years? 

Lets assume you bought something from Currys (why would you do that?), say an expensive cooker or TV and you took it out over say 3 years. You would be charged interest based on the amount the repayment was spread over.

Is this any different?

There is interest charged on the loan so effectively we are worse off longer term.

Thanks UN. That is the point I was thinking about.

So we agree to Spurs owing us £32M over the next 3 years, which is money we need now. So we have to take a loan out, to generate the cash required now. We have to pay interest on the loan, I get that, but do Spurs pay interest on the remaining amount owed to us or are they sitting on the remainder interest free?

[Sausage Roll]

We have taken a looa out from the sale of Brennan Johnson. Future installments paid directly to the bank instead of us.

Was reading Kieran Maguire's explanation of it - apparently it's pretty common practice when big transfers occur.

We get the money up front from the bank, albeit less than the actual transfer fee to cover their interest, then they recoup the money from the buying club (Spurs in this case) directly in instalments.

Does the selling club get interest from the buying club, if payment is being spread over a few years? 

Lets assume you bought something from Currys (why would you do that?), say an expensive cooker or TV and you took it out over say 3 years. You would be charged interest based on the amount the repayment was spread over.

Is this any different?

There is interest charged on the loan so effectively we are worse off longer term.

Thanks UN. That is the point I was thinking about.

So we agree to Spurs owing us £32M over the next 3 years, which is money we need now. So we have to take a loan out, to generate the cash required now. We have to pay interest on the loan, I get that, but do Spurs pay interest on the remaining amount owed to us or are they sitting on the remainder interest free?

The way I understood it from what Kieran Maguire tweeted is that Spurs pay the bank the full transfer amount in instalments, the bank pay us less than the full amount up front and they keep the difference to cover the interest.

[Sniffer Dog (Admin)]

Is it a Greek bank...

[Reds73]

We have taken a looa out from the sale of Brennan Johnson. Future installments paid directly to the bank instead of us.

Was reading Kieran Maguire's explanation of it - apparently it's pretty common practice when big transfers occur.

We get the money up front from the bank, albeit less than the actual transfer fee to cover their interest, then they recoup the money from the buying club (Spurs in this case) directly in instalments.

Does the selling club get interest from the buying club, if payment is being spread over a few years? 

Lets assume you bought something from Currys (why would you do that?), say an expensive cooker or TV and you took it out over say 3 years. You would be charged interest based on the amount the repayment was spread over.

Is this any different?

There is interest charged on the loan so effectively we are worse off longer term.

Thanks UN. That is the point I was thinking about.

So we agree to Spurs owing us £32M over the next 3 years, which is money we need now. So we have to take a loan out, to generate the cash required now. We have to pay interest on the loan, I get that, but do Spurs pay interest on the remaining amount owed to us or are they sitting on the remainder interest free?

No Spurs don’t pay interest.

Spurs owe us 32.5m in future instalments over the next 3 yrs
We take out a loan guaranteed by those future payments.
We get say 27.5m immediately via the loan (5.5m is interest on that loan).
The lender has a charge over the future payments, so Spurs pay them directly back to the lender.
Spurs don’t pay any interest as they aren’t taking out a loan