That's all fine BUT we read every year that Berlu has covered the loses. .. And he brags that he has made a huge sacrifice ... So if he has covered the loses we should be debt free ... Which evidently isnt the case.

And our debt is somwhere around 200-300 m euros ... Which means Berlu hasnt spent anything on Milan the last at least 6 years.

Kudos to Berlu and Galliani, not only they are very bad at managing one of the biggest clubs in the world, trophy and income wise, they are very good at lying the fans.

 

That's all fine BUT we read every year that Berlu has covered the loses. .. And he brags that he has made a huge sacrifice ... So if he has covered the loses we should be debt free ... Which evidently isnt the case.

And our debt is somwhere around 200-300 m euros ... Which means Berlu hasnt spent anything on Milan the last at least 6 years.

Milan was lossing money 31.7M (2007), 66.8M (2008), 9.8M(2009), 69.8M(2010),67.3M(2011),which means the club had abosolutely NOT a single cent of its own to buy any players during all these years, if Belu had not had grab the money from his own pocket to financing all those transfers.

The new reality is from now on the club has to try live within its own means, we have to get used to it.

 

Man look at those salary numbers...

That's the problem really handing out huge salaries...

 

Milan are cheap bastards and looks like all Serie A teams are handing this mercato to Juventus...

 

"Milan unlikely to reinvest Ibra/Silva money"


Oh my god, it's brand new information!


Seriously, I have been telling this to the advocates of Thiago Silva sales Part I a month ago: No matter its 6.5M, 65M or 650M they won't be reinvested back on the team. That's why I had always wished to keep the players instead of cashing 150M into Berlu's bunga bunga savings account. arty:

 

"Milan unlikely to reinvest Ibra/Silva money"


Oh my god, it's brand new information!

Well said...

 

Well we've saved about €80m (going from about 160m to 81m and that's still counting Taiwo and Mesbah wages who could still leave us) on wages this summer and also gotten the fourth most prize money from UEFA in Europe so those numbers don't tell the whole story.

The truth is that last year's deficit is going to be covered by the savings on wages alone, so it's not a wild dream to expect at least €30m to be spent on the mercato.

 

The savings on the wages of the departuring players is for the coming years (seasons), it cant be used per se to cover last year's deficit. Its impact will only show on the accouting book for 2012/2013 season that the club's salary expenditure is to be lowered by €24M(Ibra)+12M(Silva) plus other oldies' who left us this season.

Acutally the savings are not "real" money, they are the money not spent which is supposed/planned to spend. Just like you planned to spend $100k to buy an expensive car but finally didn't, which does NOT result in extra $100k in your poket.

 

There are always be, young and talented and cheap players all over the world, the question is: who will find them first? I have been Milan fan for long time, so nothing surprise me anymore, we can repeat the sloppy 97/98 season, again, so be it.
FORZA MILAN!!!

 

There are always be, young and talented and cheap players all over the world, the question is: who will find them first?

The answer in Italy at least is "probably Udinese"

 

:howler: That's true

 

while we all expect downfall, Milan is unpredictable, and could give us a positive emotions next spring as well!!!

 

If you're looking purely at income vs expenditure, we've been tracking at roughly -€40m per season. That's not taking into account player transfers, amortisation, depreciation, interest, tax, etc...

Clearly our players wage bill was spiralling out of control, but you would think that we would have sliced at least a quarter off given the number of high profile departures we've had. That would be roughly €40-50m alone in decreased player wages.

The problem, however, is that our commercial and match day revenue must continue to grow in spite of the fact that our team is likely to suffer on-field. Like most Italian clubs, our match day revenue is a pittance of what they make elsewhere, and until they fix the stadium issues in Italy then this won't change. But I suppose that B&G have completed the first step which is to cut the wage bill to a much more manageable figure.

 

delet double post

 

Yeah I was expressing myself a little bit fussy, I meant that the savings on wages alone would cover a similar deficit this next season cause I don't expect it to be a bigger deficit.

 

How the hell did the salaries in Milan increase so much since 2006? Weren't you supposed to be reducing the payroll the last few years?

 

There is a difference between big losses and being in football accepting its realities. Of course even Abramovich has a limit but to win and compete - even more if you want to win - multimillion dollar losses are a reality. I will support Milan even we are a perpetual selling club but the club should be clear on that. Ok, we cut our losses today by selling but if we want to win CL in 2015 (for example) I can guarantee you that that CL winning team will be one that doesn't make money. So Berlusconi will be back losing money in 2015...

 

That's bullshit. Manchester united played two cl finals and they made money in both occasions by keeping expences in check despite Rooney's huge salary.

They rely on their brand because that's what makes them their money.

 

1. If we compare the prices of players sold and bought by the club, Milan hasnt spent anything since 2006.

2. The transfers make the budget of the club, you cant leave the transfers out of the budget.

3. Milan had better chances to be the brand ManU is now, and to get huge money from that ... But I guess Galliani was lazy in the 90s and didnt hire people to do that.

4. If Berlu payed from his pocket to cover the clubs debt, than we wouldnt be having 250m euros debt. And Galliani said that Berluhas covered last years 67m debt ... So why we have to sell our best defender!?

5. Why dont Galliani work his ass and try to sell Robinho who had similar wage as Silva!?

 

First of, Nobody pays 42 m euros to Robinho.

Second of, Milan had high wages, with taxes, it was close to 200 m euros wages, this is why Milan makes -60-70 m euros loss every year.

Milan sold both İbra and Silva for 2012 budget. Berlusconi already covered 2011's loss.

Milan needed to lower the wage bill by 60-70 m euros. Silva new wages was 12 m euros, Zlatan's wages was 24 m euros a year with taxes.

Gattuso 8 m euros, Flamini 10 m euros, Seedorf 7, Van Bommel 7, Zambrotta 7.

Above all, All of these players wages with taxes for 6 months will be in 2012 budget. Some part of 62 m euros will go to there to cover the debt then the rest will be re-invested.

if Milan can keep the wages at lower figures, They can solve their problem a bit, at least until a new stadium.

 

That Milan didn´t capitalize on its world dominance back in the late 80´s and early 90´s to market the brand better and create a lager fanbase is a fact. This is a mistake they did and there is no escape from it.

And that we should have by now own our own stadium and have a MUCH larger match day revenue is also a fact well known. Another big mistake.

These are IMO the two mistakes that are really hurting us along with the family policy.

But right now, and that is what is important, our situation is unfortunately what Canzano described. Its a mess. Its not sustainable. It could be if Finivest wasn´t loosing money and was making huge profits like before. If it still was so than they could just easily count Milans losses as Finivests and wright it off, i.e. part of the money that whould be handed over to the state as tax would be directed towards Milan to cover the losses. Note that Berlusconi would still have to pay part of his profit to cover our deficit, just not all of it like is the case now (this is why Marina was bitching a few years ago about Milan). But those days are gone and Finivest is loosing money.

To think that they are just sitting on their asses and instead of getting rid of Robinho or Mexes are selling Thiago and Ibra because they are lazy or what ever is just naive IMO. The situation is far worse than that. First of all I just cannot believe that people who build Finivest and Il Grande Milan dont know better. Juses christ, these guys have created more than most of us all together will ever be able to. They aint dumb.

Second, Thiago simply has many more admirers and far greater market value (a value that will very soon drop given that he is 28 years old) than Robinho, Mexes and Pato together.

Just for a sec forget about the emotional aspect of loosing Thiago, forget about short term brand value. Forget about short term revenue losses with these sales. From a purely economic point, buying a defender for 14 mil and selling for 42 is good business. I´m sure they have already calculated how much less revenue we are going to have with these sales. If they are still selling than it means that they are either sure that the profit is larger than the losses or that they simply dont have another choice. Yet this is only the short term effects. Long term, i.e. 10-15 years time span, Milan is just to big to be effected that much by these sales. We have a solid fan base in italy of around 8-10 mil people and many more outside Italy. We are not Lazio. We will bounce back, but first we must stop the bleeding, build that God damn stadium and focus on youth.

 

Just for a sec forget about the emotional aspect of loosing Thiago, forget about short term brand value. Forget about short term revenue losses with these sales. From a purely economic point, buying a defender for 14 mil and selling for 42 is good business. I´m sure they have already calculated how much less revenue we are going to have with these sales.

Peive, selling Thiago would not have been an issue if Milan would have taken the steps to replace him way before (apart from Berlu lying to Milan fans like they're some lowlife shits, but that's another discussion of it's own). Barca came knocking at the door last year for Thiago and the management should have learned something with what happened with Kaka(first City then Real). There were a few young guys ready to replace Thiago and Nesta instead of giving a huge contract to shit-Mexes (who will become the highest paid after we sell Binho). We still had Astori before we offloaded our half to Cagliari for 4 million. We try to buy him back this year and Cellino rejected the notion couple of days ago. We could have done a co-own with Bocchetti and let him play at Genoa. But nope the management is short sited and has no clue how to think longer then 6 months. Now we are being overcharged to find a replacement for Thiago and the 1st target is an overpriced Porto defender who likes to make Mexesque mistakes, ok maybe not as bad.

Well today I invented a new word, Mexesque

I hear often that not having our own stadium is a detriment financially (not just us, but many SerieA teams do not own their stadia)... WHY is this the case? Why does owning the stadium have such a huge implication on revenue?

And who gets all this huge money that we're apparently missing out on? The city gov't of Milan? Or SerieA?

Yeah the city council takes half of the revenue.

 

I hear often that not having our own stadium is a detriment financially (not just us, but many SerieA teams do not own their stadia)... WHY is this the case? Why does owning the stadium have such a huge implication on revenue?

And who gets all this huge money that we're apparently missing out on? The city gov't of Milan? Or SerieA?

 

Okay sorry to be brief but I'm on a portable device and cant be wordy. According to my googleing acmilan had 2012 matchday revenues of about 35mil euros. If that's half of what it could be then wed pay for a new 120mil euro stadium (like juves) in under 4 years and then would add 35mil every season afterward. In other words it seems like an easy and obvious business choice... so why aren't we doing so?

 

We have a contract for the stadium until 2016.

 

Probably needs approval from the city council who will definitely reject it as the new stadium will make San Siro defunct.

 

Why did we sell San Siro in the 1st place? The stadium was built by Milan but for some reason was sold to the city council in 1935. After having shared it with Inter for so many decades, with the council apparently obstructing any plans regarding construction of our own stadium, guess that's a decision that still haunts us almost 80 years later.

 

Can someone with good accounting/financial knowledge in relation to football please explain the 'Profit in Player Sales' and also the 'Player Amortization' lines in the income statement posted in the OP. I have read up online but have come across some conflicting meanings.

i.e. Profit on Player Sales - does that simply refer to transfer revenue received minus transfer fees paid for the year? Or does it refer to profit made on a players book value (and doesn't include transfer fees paid)?

To further explain my query, where on the income statement does it reflect our transfer fees paid for incoming players? Is that deducted from transfer revenue received (Player Sales) or is it spread over the length of his contract and thus included as Player Amortization?

 

I think the best way of explaining is by using an example.

Let's imagine that Inter buy Quaresma for 32 million and sign him on a 4 year contract.

Those 32 million then go directly towards the assets part of the balance sheet. And the player amortization is divided over the length of the contract.

So after a year the player amortization is 8 million. His value in the balance sheet is now 24 million.

After the second year there is another player amortization of 8 million. Making his value 16 million. Inter now decide to sell him on to Besiktas for 6 million. Which makes it a loss on player sales by 10 million, which is quite a feat. alm:

 

I understand that from the balance sheet perspective (players as assets whose value decreases annually) but I'm just a bit confused about how our transfer fees are represented on the income statement. Say we buy Tevez for 20m over four years. Will our 2012 income statement show an expense of -20m or will it appear on the 2013-14-15-16 statements as -5m per year?

 

Should be the latter one, but as the money was "spent" this year, it might figure as this year's expense. Pretty much as when you buy an article in parcelled payments, "I'll pay you Tuesday for a hamburger today"

Not to mention that 5 m this year is one thing, and next it's another (it lessens its adquisitive power, that's why interest might be added, to amount for the "real" 5 m value) It's actually a reconversion, and given Milan's facing dire straits... it might be a very costly one, too... :moan:

BTW, I read the whole thread and the motto that fits this piece of news seems to be "spend wise, spend less". I bet you´ll find yourselves eyeing towards Milanello camp and the youth squads more often than of late. Which is a good thing, even if most of you might disagree with me. :lazy:

 

No prob The Pippo, I hope I´m not mistaken.

I hate to repeat myself, but back in the day, many Milan teams had loads of youth team chaps climbing to first team, instead of being loaned out. It used to be customary, the Silvio years changed everything and left most lusting for outshore signings. On this present day scenario, the youth team way might be the wiser.

 

So I would think that to get a more accurate look at how much cash we are losing each year, you would need to look at the cash flow statement rather than just he income statement which the OP has provided.

As a result of player amortisation, our profit/losses are made to look better or worse based on transfers paid in previous years.

For example, we bought Robinho in 2010 and we spent roughly 18m at the time. However, our 2012 books are still feeling the impact of that as his 18m is being spread out over the duration of his contract. So while we might not actually spend a cent on player transfers in 2012, our books will say we have. Which does not give a totally accurate and realistic assessment of how we performed financially for 2012. We might break even on income v expenditure (real cash) but the books will say differently as we are still "paying" for transfers such as Robinho. So when looking at our income statement and seeing a 69m loss, that does not necessarily mean our real debt has increased by 69m or that Berlu has had to inject 69m of his personal funds. It seems more complicated (but not as dire).