[Bluesummers]

Very well written. Bravo jack!

[han2503]

Yes I'am excusing the wages of the senators. We are not in debt. WE HAVE NEVER BEEN IN DEBT. WE DON'T OWE ANYBODY A SINGLE COPPER CENT.

Huge wages were bad business. But it's not the reason we could have not made FFP.

The flip side of keeping Silva and Ibra was that we would have no investment in any department for any player. Unless, we built a stadium or unless we could once again negotiate sole TV rights.

So remove the dept part and put in that we ended up in the red every single year in these last 6 (except for 2009). The wages of the senators are the CATALYST for that situation!!! How can they ever be excused when the result of that is selling one of the best defenders in the world? A player who we should have used as the foundation for the new Milan!!

Inexcusably stupid actions from Galliani and yet they're being excused or blamed on FFP. I just cannot fathom how this is ok with any Milan fan. End of.

Forget about Ibra, because in the end it's probably a smart business move. The flip side of keeping Silva would have been that he'd be our only player on a relatively high wage 6m (after the fake extension that is). By selling Ibra and letting go of all those senators we'd already save up nearly 35m in wages if my calculations are correct (and that is without tasking into account the taxes). That's every year. Now add to that the money we got for Ibra and re-negotiations for smaller wages like with Flamini and it's already one huge improvement. THAT is what a project for the future is. Not this.

As for an investment, I'd rather have kept our backbone than what we'll surely see happen now. We'll replace Ibra with Dzeko or Tevez (who won't come cheap and will demand reasonable wages) and we'll replace Silva with some mediocre defender. And then we'll stay as we are. So basically we're in the same water we started in a month ago, only now it's minus Ibra who single handedly won us a ridiculous number of games last season and the best defender around. Yes that's one major investment right there (IMG:style_emoticons/default/rolleyes.gif)

[Rossoneri7]

What?

The fact that Galliani was the one that created this mess to begin with and he's selling our star players to cover his @ss?
The fact that Rino and Flamini earned more than Silva?
Or the fact the FFP is a load of BS?

Nothing you stated is a fact. On the contrary, Jack did homework, and a lot of it is facts that make perfect sense.

[han2503]

Nothing you stated is a fact. On the contrary, Jack did homework, and a lot of it is facts that make perfect sense.

Only because it suites your argument.

So because you agree with Jack it's a fact, but the facts I stated about certain wages are untrue to you because you don't want to admit they were a major mistake on Galliani's part...

Ok if that's how it is, you're completely right. All of this is for the good of the future of this club yada, yada, yada. We'll talk in a few years time when it's Pato's turn and we're trudging in mid-table mediocrity. But as long as we're under Berlu then everything is ok right? (IMG:style_emoticons/default/rolleyes.gif)

[Jack Sparrow]

I suggest we make this thread sticky in the Other section. I'll want to come back to it in a few years' time.

Thanks for giving your picture Jack. I can't imagine how much time and energy you put into it, certainly more than half an hour (IMG:style_emoticons/default/tongue.gif)

I still think we could have avoided selling Silva and made sacrifices elsewhere. yes we need to be careful with our spending but we "must" finish in top 3 as well. you almost didn't mention the footballing aspects of it, just focused on the financial ones. who are we going to sign in defense? Rolando? right. with that defense we'll still be vulnerable. we WERE with Nesta and Silva last season, what we are expecting now? we've got poor FBs. what I fear now is the very real possibility of finishing outside the top 3. I don't know how the club can be salvaged if that happens...


I think that's because they're a stupidly complete team. they needed a LB and signed a great one in Alba.

Hi Zed. I think it could have been avoided, but then the scale of building a new team would have been too much of a risk.

In terms of footballing aspects, I think if we do reinforce this summer, we can make top 3. We have very little competition in imo. Aside from Juve and Inter there is only Udinese and Napoli. Of course Serie A always throws up surprises every season.

But yes, if we do not reinforce there will be no challenging for top 3. But I don't see non-reinforcement as an option.

[Jack Sparrow]

So remove the dept part and put in that we ended up in the red every single year in these last 6 (except for 2009). The wages of the senators are the CATALYST for that situation!!! How can they ever be excused when the result of that is selling one of the best defenders in the world? A player who we should have used as the foundation for the new Milan!!

Inexcusably stupid actions from Galliani and yet they're being excused or blamed on FFP. I just cannot fathom how this is ok with any Milan fan. End of.

Forget about Ibra, because in the end it's probably a smart business move. The flip side of keeping Silva would have been that he'd be our only player on a relatively high wage 6m (after the fake extension that is). By selling Ibra and letting go of all those senators we'd already save up nearly 35m in wages if my calculations are correct (and that is without tasking into account the taxes). That's every year. Now add to that the money we got for Ibra and re-negotiations for smaller wages like with Flamini and it's already one huge improvement. THAT is what a project for the future is. Not this.

As for an investment, I'd rather have kept our backbone than what we'll surely see happen now. We'll replace Ibra with Dzeko or Tevez (who won't come cheap and will demand reasonable wages) and we'll replace Silva with some mediocre defender. And then we'll stay as we are. So basically we're in the same water we started in a month ago, only now it's minus Ibra who single handedly won us a ridiculous number of games last season and the best defender around. Yes that's one major investment right there (IMG:style_emoticons/default/rolleyes.gif)

Are you sure?

1. Our debt of 67.3 + (4 the increased wage for Silva from his 8 million to 12 million post taxes)-(42+24 as wage saving) still leaves us with a deficit of 5.3 million. And we have a hole in the attack line plus not a lot of money to buy a replacement.

2. Do you think we didn't try to hawk Ibra?? Why did those rumours swirl about? Why did Mancini come in and the rumours about Ibra come up? Ibra had to deny he had an interest in going to Man City. Put simply, NO ONE wanted Ibra. NO ONE was willing to put up a transfer fee (no matter how reduced), and then take up 24 million added wages. PSG gave the only two for one option.

Once again you go over the same point. Our old debts were completely immaterial. They don't count. This season's figures do. We have carried over nothing from the past season. We have no debts to foreign institutions.

[Rossoneri7]

Only because it suites your argument.

So because you agree with Jack it's a fact, but the facts I stated about certain wages are untrue to you because you don't want to admit they were a major mistake on Galliani's part...

Ok if that's how it is, you're completely right. All of this is for the good of the future of this club yada, yada, yada. We'll talk in a few years time when it's Pato's turn and we're trudging in mid-table mediocrity. But as long as we're under Berlu then everything is ok right? (IMG:style_emoticons/default/rolleyes.gif)

No han, its a fact because it is the reality of the situation. This is not an argument about who is right and who is wrong, it is about clarity. In a years time you will see the difference.

Not saying you shouldn't be sad about what is happening, just answering the question as to why it is happening.

[han2503]

Are you sure?

1. Our debt of 67.3 + (4 the increased wage for Silva from his 8 million to 12 million post taxes)-(42+24 as wage saving) still leaves us with a deficit of 5.3 million. And we have a hole in the attack line plus not a lot of money to buy a replacement.

2. Do you think we didn't try to hawk Ibra?? Why did those rumours swirl about? Why did Mancini come in and the rumours about Ibra come up? Ibra had to deny he had an interest in going to Man City. Put simply, NO ONE wanted Ibra. NO ONE was willing to put up a transfer fee (no matter how reduced), and then take up 24 million added wages. PSG gave the only two for one option.

Once again you go over the same point. Our old debts were completely immaterial. They don't count. This season's figures do. We have carried over nothing from the past season. We have no debts to foreign institutions.

Silva earned 6m after taxes not 8m. And going from 67m+ in the red to just around 5m is still a massive improvement anyways, even if you got Silva's wage wrong. These things cannot be corrected in a day, they've been building for years now.

Don't kid yourself about no one wanting Ibra, if City were in talks with us then obviously Mancini wanted him

I specifically said forget about the depts. I was talking about ending the financial year in the red zone for the last 5 years running. I suppose that's the fault of Ibra and Silva as well right? We might not have tangible depts, but that money had to be cleared by Silvio so we're out of the red zone each year. And why was that happening exactly? Because we had a massive wage bill filled with over infalted wages to players who could barely notch up over 20 games a season and were no where near their prime. The fact that when we had a team full of stars with guys like Rui Costa and Stam sitting on the bench and were able to make a profit at the end and when those stars all left or were sold, instead of the wage bill reducing as would have been logical it climbed astronomically, this even after getting guys like Kaka, Pirlo and Dinho off it, who all demanded astronmoical fees.

Explain to me how this is not a mistake and how it did not even marginally effect us or how it wasn't the reason why we're in this mess now. Silva only started earning 4m from last season, while Ibra had only been with us for 2 seasons. These problems have been a long time coming and no one but Galliani should be blamed.

[han2503]

No han, its a fact because it is the reality of the situation. This is not an argument about who is right and who is wrong, it is about clarity. In a years time you will see the difference.

Not saying you shouldn't be sad about what is happening, just answering the question as to why it is happening.

Explain to me yourself how you do not think that the wages of the senators have not put us in this situation.

[Rossoneri7]

Explain to me yourself how you do not think that the wages of the senators have not put us in this situation.

What situation?

[Jack Sparrow]

Silva earned 6m after taxes not 8m. And going from 67m+ in the red to just around 5m is still a massive improvement anyways, even if you got Silva's wage wrong. These things cannot be corrected in a day, they've been building for years now.

Don't kid yourself about no one wanting Ibra, if City were in talks with us then obviously Mancini wanted him

I specifically said forget about the depts. I was talking about ending the financial year in the red zone for the last 5 years running. I suppose that's the fault of Ibra and Silva as well right? We might not have tangible depts, but that money had to be cleared by Silvio so we're out of the red zone each year. And why was that happening exactly? Because we had a massive wage bill filled with over infalted wages to players who could barely notch up over 20 games a season and were no where near their prime. The fact that when we had a team full of stars with guys like Rui Costa and Stam sitting on the bench and were able to make a profit at the end and when those stars all left or were sold, instead of the wage bill reducing as would have been logical it climbed astronomically, this even after getting guys like Kaka, Pirlo and Dinho off it, who all demanded astronmoical fees.

Explain to me how this is not a mistake and how it did not even marginally effect us or how it wasn't the reason why we're in this mess now. Silva only started earning 4m from last season, while Ibra had only been with us for 2 seasons. These problems have been a long time coming and no one but Galliani should be blamed.

- I'm talking about post taxes from the club's perspective. His 4 million costs the club 8 million. His 6 million costs the club 12 million. That's how much it costs Milan to keep Silva on the payroll.

- Man City also wanted Silva, as the rumours stated. No one wanted just Ibra alone. Why would they? Do you know as of this moment, Man City do no satisfy FFP.

- Ending in the red zone for all the past seasons was not a problem. Because they are not counted. Silvio has been spending something like 70 to 100 million every season for some time now. We basically had a free pass till then. Our revenues were different. Wages being paid to the players like Stam and Rui you mentioned were different. Zidane in Madrid was on 4.4 GBP. Now FFP means the club cannot make a loss more than 45 million after transfers and wages and operating costs.

- It was a mistake coz as a standalone business it was bad to spend 80% of your revenue on wages. But Milan is not a stand alone business. It is now trying to be, and some decisions are being made.

[han2503]

- I'm talking about post taxes from the club's perspective. His 4 million costs the club 8 million. His 6 million costs the club 12 million. That's how much it costs Milan to keep Silva on the payroll.

- Man City also wanted Silva, as the rumours stated. No one wanted just Ibra alone. Why would they? Do you know as of this moment, Man City do no satisfy FFP.

- Ending in the red zone for all the past seasons was not a problem. Because they are not counted. Silvio has been spending something like 70 to 100 million every season for some time now. We basically had a free pass till then. Our revenues were different. Wages being paid to the players like Stam and Rui you mentioned were different. Zidane in Madrid was on 4.4 GBP. Now FFP means the club cannot make a loss more than 45 million after transfers and wages and operating costs.

- It was a mistake coz as a standalone business it was bad to spend 80% of your revenue on wages. But Milan is not a stand alone business. It is now trying to be, and some decisions are being made.

Ahh, sorry thought you were talking about his wages being 8m after taxes after the recent extension.

Still those 8m were being paid to Rino, Flaimini (more then that actually), Ambro, Zambro, Seedorf, were costing arpound 6 to 7 each. But I guess Silva's was the one surpluss all the other were ok

As you said previously, with Silva we would have ended up in the red by just 5m, thus according to what you're saying here about FFP, we would still be ok to play in Europe. And yes Man City wanted Silva, but Mancini also wanted Ibra, they've got a great rapport from their time at Inter, Mancini knows haw valuable Ibra can be for any title challenger. As for the wages in the past, it still does not mean that verterans should have been given contract extensions in excess of 4m.

Don't forget there were also others such as Dida, Oddo, Janku, etc which all were earning pretty hefty wages. And lets not forget that 4 year extension Dida got when his performances had already dipped ridiculously and we had KALAC of all people starting ahead of him. It's just inexcusable, and the fact that Silvio spent all that money to cover for those mistakes does not make it ok. That money could have easily gone into rebuilding this team twice over, instead he was getting us out of the red zone with it. Does it matter now? Technically no as what's done is done and those losses aren't recorded as such or payed for by a third party. But if you cannot see how that buildup of constantly needing to be bailed out has helped into getting us into this situation than I don't know what to tell you any longer. Because selling Silva clearly won't solve anything, maybe for this summer we were cleared out by selling him but what happens next summer when we're in the red once again? We currently have a dismantled team. Even if right now with the wages we have we'd break even, we still need at least 5 players to come in. If we want to be remotely competitive. Bringing in just one striker and some unkown defender would mean not making the CL next season. And that would put us in an even worse situation financially as well as footballing wise then it would have been had we kept our only 2 star players.

[Danny]

Insanely long post there Jack, I'll leave this debate to others given I've done so much of this kind of thing relating to Rangers that I doubt I'd be well-informed enough on the Milan situ.

But I did want to praise you on your use of Network. Been a while since I saw a reference to it (IMG:style_emoticons/default/smile.gif)

[kurtsimonw]

Now FFP means the club cannot make a loss more than 45 million after transfers and wages and operating costs.

So basically Madrid can continue as they are now?

They run over 40m operating profit every year and if they are 'allowed' to lose 45m, that basiclaly gives them 90m to play with to account for the new tax. Is that right? Or no?

I don't think FFP will happen personally. But if it does, all it means it that it will drive up sponsorships for the top teams to a crazy amount.

This post has been edited by kurtsimonw: Jul 18 2012, 04:15 PM

[Jack Sparrow]

So basically Madrid can continue as they are now?

They run over 40m operating profit every year and if they are 'allowed' to lose 45m, that basiclaly gives them 90m to play with to account for the new tax. Is that right? Or no?

FFP will let you spend as much as you like provided you have earned it.

The 45 million is for the first two seasons, then it cuts down to 30 million and then even further.

I'm not sure about that 40m profit figure. They cannot lose 45 M, since Madrid are not owned by a single owner. I think it will be more complicated.

The thing is Real Madrid make huge money. HUGE MONEY. Adidas pays us around 13 million a year to be associated with them (remember the ALL IN ad?), they pay Madrid 40 million. They have huge presence all over the world and are much bigger than us in every aspect. Commercial, Stadium, Wages everything.Here's where I think Madrid could suffer:

- The TV rights renegotiation. It screwed us over, so it might screw them over as well. Even the current deal is a bit in trouble. The TV company that is offering them the amount has asked for bankruptcy protection. But the amount promised has a bank guarantee. However we know that the banks themselves are in trouble.

- The tax law. Scrapping the Beckham law will hurt them. Kaka and Ronaldo's salaries are too huge I think to cope with without it stinging a bit. Don't forget their model depends on bringing in hot young players all the time.

- Spains' economy. Madrid's model depends on having the cash and the economics to bring in hot players. If they can't buy the players, they can't sell the merchandise and bag the sponsorships and therefore make the revenue to offset these huge spends. But where can they get the money from if the lending institutions are in massive debt and needing bailouts. If the worst case happens, Madrid could go under.

If a lender ran into trouble, ie could not raise funds to pay obligations (eg depositors wanting funds or unable to refinance their borrowings) then they may be forced to recall loans. This would be a serious situation and would be the last call. The system is based on confidence, which would take a huge hit if this eventuated.

The EU would not let things get this bad, but still Madrid would need to take precautions.

As of now, I think PSG , Man City,Chelsea, Barca are in some trouble regarding the FFP among the big clubs. It's Barca that fascinate me the most. I think Rossell was not kidding when he said the Barca bank is in tatters. I think Laporta lived way beyond Barca's means, and they're gonna suffer.

But here you go. Some excellent reads.

Sorry guys, I slept only 4 hours and had a full work day. I don't even want to look at a financial sheet for a week.