Lukaku - transfer speculation | Gone

[simonhch]

I would sell him if they can put €50m up front with €30 to follow over the next 2 seasons. That money would allow us to buy the likes of Ben Yedder

The problem with this logic is to assume that we’d have to pay up front for anyone we buy, which is rarely the case. Often what happens is that you can player a player for 40m up front or 45m over three years. Just as a random example. From the selling club perspective it makes way more financial sense to take the higher fee over 3 years. If you look at United’s accounts, we still owe a ton of money of transfers made over the last 3 years, precisely because we pay in instalments. If Ben Yedder is going to come in for 45m, we can easily put down 25m up front then 20m over two years. We don’t need all the Lukaku money up front, and it’d be better to get 80m for him over 3 years with only 10 up front, than 70m for him with 35-50 up front. Businesses run on multi-year cycles. Not year to year.

I really think fans (not saying you particularly, but just reading this thread), read for too much into the headline economics of prospective transfers without ever understanding the more subtle intricacies of the transactions or their real financial accounting impact.

@giorno @VeevaVee @Berbaclass seem to be the ones talking the most sense in this thread.

 

[golden_blunder]

The problem with this logic is to assume that we’d have to pay up front for anyone we buy, which is rarely the case. Often what happens is that you can player a player for 40m up front or 45m over three years. Just as a random example. From the selling club perspective it makes way more financial sense to take the higher fee over 3 years. If you look at United’s accounts, we still owe a ton of money of transfers made over the last 3 years, precisely because we pay in instalments. If Ben Yedder is going to come in for 45m, we can easily put down 25m up front then 20m over two years. We don’t need all the Lukaku money up front, and it’d be better to get 80m for him over 3 years with only 10 up front, than 70m for him with 35-50 up front. Businesses run on multi-year cycles. Not year to year.

Yeah but if you look at my sum, it adds up to 80m not 70m

 

[simonhch]

Yeah but if you look at my sum, it adds up to 80m not 70m

Ok but it’s the up front fee that’s the sticking point. Why not sell him with 10m up front and 70m in two years? If that’s the only way to get to 80m. And I laid out the argument for that in some relative detail. You don’t need the 50m up front if it’s a barrier to a sale or getting the optimal fee.

 

[roonster09]

You don’t really understand football economics. Very few transfers are paid up front. Most are paid in instalments over 3 years or so. As a club we usually pay in instalments ourselves. It’s really not a problem to get 10 now and 60 in two years. Much more important is the total value of the transfer.

If their opening offer is 70m, regardless of the payment structure, that’s a good starting point. That’s 62m in pounds. I believe we can get that up to around 75m pounds. Maybe with 12-15 as a loan fee and 60m as an obligation to buy. We’ve already amortised about 30m of his fee on the books from an accounting perspective too. So from an accounting perspective we’ll actually make a profit at those prices. And before you start talking about it being an accounting trick etc., the moment you started bringing up cash flow, you took it into the realm of accounting.

From both a sporting and financial perspective to recoup our money for a player that we don’t want, and wants to leave, is a good deal no matter which way we shake it. The time value of money loss is negligible.

Yeah the initial bid is good and we should get better deal than this. 2 year loan deal + obligation to buy is as good as structured payments for 3 years (assuming the obligation to buy is paid in 1 time).

Also from Inter's perspective it's a good deal as they are just fresh from settlement period and with this being loan deal they can improve other positions this season and next.

 

[Morpheus 7]

We owe inter absolutely nothing, if they want it over installments like that they should pay 85m. They were trying to milk us over Perisic no time a go, we shouldn't be doing them no favours.

 

[Wednesday at Stoke]

They should stick to their guns and get Inter to pay every last cent of that 80M after how they stonewalled over Perisic. Lukaku is a professional enough player to not kick up a fuss even if he doesn't get a move.

 

[Devil81]

People losing their shit over the transfer fee, Lukaku ability wise was never a 75 million pound player, we overpaid and given the form he's been in the last twelve month we should be grateful with the fee we will be taking from this transfer.

Get shut, it's not my money and I'm sick of seeing him lose possession and stand like a statue in the box. We want a striker who's willing to move and is able to bring others into play.

I'd drive him to Inter.

 

[LawCharltonBest]

It’s not a bad offer. At 20m for the loan and 65m for the final fee I think we’ll deal.

I don’t see the point. Olé would surely want to reinvent. You can hardly reinvent 20m and get a World Class forward in

 

[flappyjay]

People losing their shit over the transfer fee, Lukaku ability wise was never a 75 million pound player, we overpaid and given the form he's been in the last twelve month we should be grateful with the fee we will be taking from this transfer.

Get shut, it's not my money and I'm sick of seeing him lose possession and stand like a statue in the box. We want a striker who's willing to move and is able to bring others into play.

I'd drive him to Inter.

So was Morata for 58m and Higuain for €90m but they were still bought for crazy money. Why should be the ones to sell cheap. We get fleeced all the time, we should return the favor

 

[Devil81]

So was Morata for 58m and Higuain for €90m but they were still bought for crazy money. Why should be the ones to sell cheap. We get fleeced all the time, we should return the favor

Because all those players were bought when they were on a high, how do you sell a player on for a profit in such bad form?

The guy was built like a truck last season and showed little interest in playing for the club. I'd say we're lucky getting the fee that we are and we should be grateful.

 

[Red Indian Chief Torn Rubber]

People losing their shit over the transfer fee, Lukaku ability wise was never a 75 million pound player, .......

who gives a shit? Why should United be the ones to sell cheaply? Is there a universal law stopping us overpricing players too?

 

[Classical Mechanic]

I don’t see the point. Olé would surely want to reinvent. You can hardly reinvent 20m and get a World Class forward in

I really don't think that it makes much difference to what we can invest this season anyway. Transfer fees are almost always paid in installments. No one would be paying £80m up front for Rom.

I think if we get rid of Rom and pick up Ben Yedder for 40m Euros then we've don't great business. YBY got 25 goals for Sevilla last year and is better technically than Rom.

 

[Devil81]

I don’t see the point. Olé would surely want to reinvent. You can hardly reinvent 20m and get a World Class forward in

No disrespect mate but United aren't strapped for cash, and if they've got an obligated transfer fee built into the contract then I don't see the issue at all.

 

[Red Indian Chief Torn Rubber]

Because all those players were bought when they were on a high, how do you sell a player on for a profit in such bad form?

Real Madrid do it nearly all the time.

 

[marko goalo]

A lot of interesting and useful points being raised here. A shame the offer is somewhat derisory but the fact is this is no auction, there are no other suitors who may force up the fee. Inter have been plagued by the FFP rules and are using our desire to sell against us and you can't blame them for that. As has been mentioned we paid way over the odds and so have to be somewhat subjective.

From an accounting point of view I guess he stays on our balance sheet therefore we cannot write the loss off in this financial year and thus save some tax?? Or is his 'value' restated so that we do get some tax relief??

Does anyone know if the deal is they have to buy after two years or can they walk away and send him back? If his form continues to slide downhill over the two years why, as Inter, would you still go ahead with the fixed fee at the end of it when in real terms he's likely to be worth less than the agreed fee?

 

[Devil81]

Real Madrid do it nearly all the time.

That's because everyone thinks that to be a player for Madrid you've got to be world class. Reality is they've got about four or five world class players carrying a pretty average squad.

 

[Classical Mechanic]

Think what people are missing here is that under no circumstances would we get £80m in one hit. It would be £16m a season over the term of his 5 year contract. 95% of deals are structured like this in football. The £80m we got in one for Ronaldo was a rare deal.

Inter are basically proposing to stretch the payment terms from 5 to 7 years with a lower value initial term over the 2 year 'loan' option. We need the overall values increasing closer to the £80m we want but the only sticking point for me would be who is paying the wages over the loan period.

 

[LawCharltonBest]

No disrespect mate but United aren't strapped for cash, and if they've got an obligated transfer fee built into the contract then I don't see the issue at all.

Not strapped for cash. But they only spend on transfers a percentage of their total club profits (including players sold)

The more we get now, the more we’re able to reinvest.

Imo to get to be a title challenging team again, we’d still need at least 4 brilliant signings after Wan-Bissaka, assuming nobody leaves. So more money the better

 

[roonster09]

Think what people are missing here is that under no circumstances would we get £80m in one hit. It would be £16m a season over the term of his 5 year contract. 95% of deals are structured like this in football. The £80m we got in one for Ronaldo was a rare deal.

Inter are basically proposing to stretch the payment terms from 5 to 7 years with a lower value initial term over the 2 year 'loan' option. We need the overall values increasing closer to the £80m we want but the only sticking point for me would be who is paying the wages over the loan period.

No, that's just how the deal is reported for accounts. Payments structure are not fixed, it depends on the deals. For example Higuain's 94 million was paid in 2 or 3 installments, not over the length of contract.

 

[JPRouve]

No, that's just how the deal is reported for accounts. Payments structure are not fixed, it depends on the deals. For example Higuain's 94 million was paid in 2 or 3 installments, not over the length of contract.

How the cost is reported, even the posters with the correct idea use the wrong terms and wrong tools. It aslo depends on the useful life of the asset, if you sell/lose the asset sooner than anticipated the cost accelerate it doesn't disappear.

 

[sp_107]

What if they decided not to buy after 2 years? We will end up with a player in his final year of contract and we may not get even 25 mil

We must sell instead of loaning him out and give them an option to pay 3x25 mil over next 3 years if they don't have cash.

 

[Devil81]

Not strapped for cash. But they only spend on transfers a percentage of their total club profits (including players sold)

The more we get now, the more we’re able to reinvest.

Imo to get to be a title challenging team again, we’d still need at least 4 brilliant signings after Wan-Bissaka, assuming nobody leaves. So more money the better

But the reality is that's never going to happen in one transfer window. The club have kind of accepted already this is a long term project to get ourselves back to the top than a short term fix.

 

[roonster09]

How the cost is reported, even the posters with the correct idea use the wrong terms and wrong tools. It aslo depends on the useful life of the asset, if you sell/lose the asset sooner than anticipated the cost accelerate it doesn't disappear.

Yeah, used wrong term.

 

[roonster09]

What if they decided not to buy after 2 years? We will end up with a player in his final year of contract and we may not get even 25 mil

We must sell instead of loaning him out and give them an option to pay 3x25 mil over next 3 years if they don't have cash.

Obligation to buy means they have to buy. If it's an option to buy then they will have choice.

 

[Mainoldo]

Because all those players were bought when they were on a high, how do you sell a player on for a profit in such bad form?

The guy was built like a truck last season and showed little interest in playing for the club. I'd say we're lucky getting the fee that we are and we should be grateful.

Grateful for what? Having Belgium’s number one striker? Who else in world football is getting sold for cheap with Lukaku’s C.V? He’s 26 by the way.

 

[Classical Mechanic]

No, that's just how the deal is reported for accounts. Payments structure are not fixed, it depends on the deals. For example Higuain's 94 million was paid in 2 or 3 installments, not over the length of contract.

The pint still stands that you're highly unlikely to get the payment in one hit and that Inter are simply looking for longer credit terms.

 

[NotoriousISSY]

Obligation to buy means they have to buy. If it's an option to buy then they will have choice.

Surely a permanent transfer with an agreed payment plan would circumvent that, if United were open to structured payment terms of course.

But given that we are always made to pay big upfront for everyone, I can't imagine it's an attractive proposition, unless we can structure our transfers in the same manner with a suggested summer budget of £100m.

 

[Havak]

I kind of expected the loan, but having to buy him after it is a strange one. I assume they're having some kind of investigation and can't warrant the fee outright for the next year or two, hence the deal, but what if he turns out to be shit for Inter as well? You'd have to spend a total of about £65m~ on a player you don't want. Really odd.

I only want Lukaku out if we are bringing in some kind of replacement. It doesn't necessarily have to be an out-and-out striker for me, but definitely a forward. Fernandes or Ben Yedder looking most likely at the moment though.

 

[roonster09]

The pint still stands that you're highly unlikely to get the payment in one hit and that Inter are simply looking for longer credit terms.

It's same for any deal. Usually transfer fee are paid in installments. So in this case, Inter might pay loan fee for 2 years and whatever the fee accepted as obligation to buy in 1 shot, which means whole fee is paid in 3 years just like other deals.

Only difference is initial upfront fee and for Inter they can spend more money this summer.

 

[Classical Mechanic]

Surely a permanent transfer with an agreed payment plan would circumvent that, if United were open to structured payment terms of course.

But given that we are always made to pay big upfront for everyone, I can't imagine it's an attractive proposition, unless we can structure our transfers in the same manner with a suggested summer budget of £100m.

This isn't true I don't think. We still owe loads in transfer fees.

It's same for any deal. Usually transfer fee are paid in installments. So in this case, Inter might pay loan fee for 2 years and whatever the fee accepted as obligation to buy in 1 shot, which means whole fee is paid in 3 years just like other deals.

Only difference is initial upfront fee and for Inter they can spend more money this summer.

I highly doubt they''ll be paying the final fee in one tbh.

 

[roonster09]

Surely a permanent transfer with an agreed payment plan would circumvent that, if United were open to structured payment terms of course.

But given that we are always made to pay big upfront for everyone, I can't imagine it's an attractive proposition, unless we can structure our transfers in the same manner with a suggested summer budget of £100m.

Yes it does but it won't help Inter to spend more money this season. That's why it's obligation to buy so that they can show this cost 2 years later.

Also no, we don't pay all the fee upfront. We still owe lot of money to other clubs for the deals made few seasons ago.

 

[roonster09]

I highly doubt they''ll be paying the final fee in one tbh.

I don't know how the payments are done for 'Obligation to buy' fee. Since we give 2 years time, I'm assuming we will get it in 1 shot or in 1 year.

 

[roonster09]

I kind of expected the loan, but having to buy him after it is a strange one. I assume they're having some kind of investigation and can't warrant the fee outright for the next year or two, hence the deal, but what if he turns out to be shit for Inter as well? You'd have to spend a total of about £65m~ on a player you don't want. Really odd.

I only want Lukaku out if we are bringing in some kind of replacement. It doesn't necessarily have to be an out-and-out striker for me, but definitely a forward. Fernandes or Ben Yedder looking most likely at the moment though.

If club is not completely sure on the player then they will look for 'Loan + option to buy' deals so that they can assess the player before signing them, something that Italian clubs usually do a lot.

In this case, it's Obligation to buy which means they are sure about the player, just want to postpone the cost in their accounts.

 

[Cliche Guevara]

My concern seems to be that too many people want to their nose off to spite their face.

We want to shaft Inter even if it means we shaft ourselves more. It’s all very well saying we overpaid so we should make them.

If it’s £75m or nothing, it’s going to end up being nothing.

I don’t really care much for the amortisation/accounting business.

 

[JPRouve]

Surely a permanent transfer with an agreed payment plan would circumvent that, if United were open to structured payment terms of course.

But given that we are always made to pay big upfront for everyone, I can't imagine it's an attractive proposition, unless we can structure our transfers in the same manner with a suggested summer budget of £100m.

This part is a little bit more complicated from an FFP/accounting standpoint. A loan means that the asset is still owned by United who loans it's services during a certain period of time which means that Inter shouldn't have to write the 60m in their books until 2021 and depending on their situation it could be a good thing, if they purchase him today their books will show that immediately and will impact their FFP records a lot more. Where I have a doubt is how FFP consider loans with obligation to buy from an accounting standpoint.

 

[roonster09]

This part is a little bit more complicated from an FFP/accounting standpoint. A loan means that the asset is still owned by United who loans it's services during a certain period of time which means that Inter shouldn't have to write the 60m in their books until 2021 and depending on their situation it could be a good thing, if they purchase him today their books will show that immediately and will impact their FFP records a lot more. Where I have a doubt is how FFP consider loans with obligation to buy from an accounting standpoint.

Remember reading that loan with obligation to buy will be considered as permanent transfer from day 1, might be wrong here. If that's the case then it won't help Inter in FFP.

 

[john moran]

People losing their shit over the transfer fee, Lukaku ability wise was never a 75 million pound player, we overpaid and given the form he's been in the last twelve month we should be grateful with the fee we will be taking from this transfer.

Get shut, it's not my money and I'm sick of seeing him lose possession and stand like a statue in the box. We want a striker who's willing to move and is able to bring others into play.

I'd drive him to Inter.

You may well drive there to bring him back after you have a season of the totally overrated Rashford and the totally lazy Martial .

Selling him unless he is been replaced by someone of a higher standard is madness .
It may well be the case we cash in on him and continue to shop in the pound shop while paying Harrods prices .

Are Liverpool supporters running the Club.?

 

[JPRouve]

Remember reading that loan with obligation to buy will be considered as permanent transfer from day 1, might be wrong here. If that's the case then it won't help Inter in FFP.

Yes, it was rumoured for PSG and Mbappé but I wasn't sure about the exact rules.

 

[Havak]

If club is not completely sure on the player then they will look for 'Loan + option to buy' deals so that they can assess the player before signing them, something that Italian clubs usually do a lot.

In this case, it's Obligation to buy which means they are sure about the player, just want to postpone the cost in their accounts.

I know that, but what I'm saying is it's such a risk as he could have two absolutely shambolic seasons where he doesn't even hit double digits then you look a mug when you have to pay well in excess of £50m for the player. It could go the other way of course and people might say he'd be worth even more.

 

[Classical Mechanic]

I don't know how the payments are done for 'Obligation to buy' fee. Since we give 2 years time, I'm assuming we will get it in 1 shot or in 1 year.

I think it's a way to stretch the payment terms to accommodate their cash flow i.e. that after the loan it will take shape as a regular transfer after the 'loan' with payments over 3-5 years. They would be boxing themselves in if they needed to drop such a big fee in once, especially considering their financial position.

I still think it is an acceptable offer to United. I don't think that we are as desperate for bigger and quicker instalments as people seem to think.