Manuel Ugarte | Romano - he’s signed | Awaiting Club announcement

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didz said:
Cheers, I dropped the ball with the Romero example as that was an option as pointed out. But as you've shown, it is common practice.
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100% common practice and becoming more so because it's a good way of clubs still getting key targets in the short term while passing the buck in the books over to the next fiscal year instead.

The selling club still get their money eventually and the buyer gets the player earlier than when they realistically would have been able to
 
The Cat said:
My apologies I thought I was replying to saik not didz. Saw the short name with no capitals :lol:
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:lol: It seems like I confused a few posters in here. It was just my personal preference if that was a loan with option to buy so we can flog him back if he flops like we did with Amrabat. No way PSG would ever agree to that though.
 
DOTA said:
So how does loan with obligation to buy work? Is the obligation officially written in to the deal or is it dodgy gentleman's agreement stuff that only works because no one would dare piss off Mendes?
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It's a binding agreement which allows the buying club to stagger the payments so it doesn't skew their spending for this season, whilst still enabling the selling club to account for the full value of the eventual sale in the immediacy.

PSG will be able to report the full fee of the eventual deal now, we can mark the fee of the loan for this season and delay full fee until he joins in a season's time. It will eat into our spending next summer though, unless we offset it with sales/similar outgoings.
 
groovyalbert said:
It's a binding agreement which allows the buying club to stagger the payments so it doesn't skew their spending for this season, whilst still enabling the selling club to account for the full value of the eventual sale in the immediacy.

PSG will be able to report the full fee of the eventual deal now, we can mark the fee of the loan for this season and delay full fee until he joins in a season's time. It will eat into our spending next summer though, unless we offset it with sales/similar outgoings.
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If I'm reading correctly you are saying there is no downside for PSG? Why are not all transfers done this way then, if it makes one side's books look temporarily prettier at no cost to the other party?

I tried googling and I got PWC telling me they are just counted as normal transfers, which would surely make them pointless, so seems unlikely.

https://viewpoint.pwc.com/dt/gx/en/...hips-with-play/1-9-loans-with-obligation.html
In substance, the loan constitutes a permanent transfer, because there is an unconditional obligation to transfer at signature but there is a deferred payment arrangement (Framework para 4.6). There are no circumstances in which either club could elect to cancel on the arrangement.
It would then be appropriate to account for the transaction as a permanent transfer (see solution 1.1) from contract inception, when control of the registration rights has transferred
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Posh Red said:
Off topic, but I have always wondered why transfers don’t go ahead became ‘the club won’t accept instalments - they want the fee up front’.

Why on earth wouldn’t the buying club just use a bank/financier to overcome this issue? Sure they would pay interest, but I imagine that instalment transfers cost more anyway.
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I often wonder this myself. Why wouldn't you just sell 50m over 5 years to a financier for 45 million now? Maybe because you'd probably get offered a lot less than 45 because of net present value perhaps.
 
croadyman said:
Gives me hope of still signing a LB, would like an 8 to rotate with Mainoo too, however no chance we sign SEVEN senior players in one window
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Why would we need any of those? Looks like an obsession with signings for me.

If Mainoo is unavailable we have Mount/Scot/Casemiro as covers, assuming we close Ugarte, with Bruno as starters. We also won't be getting serious in the Europa League/FA cup until February at most so we have enough time to blend in Collyer in the early stages of both competitions.

Undecided about a LB just because of Mazraoui and Shaw's injury issues and Martinez having a horrid time last season with fitness.
 
FrankWhite said:
I often wonder this myself. Why wouldn't you just sell 50m over 5 years to a financier for 45 million now? Maybe because you'd probably get offered a lot less than 45 because of net present value perhaps.
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I could be wrong, but I’m sure I heard Atletico used such a mechanism to purchase Felix. There had to be another reason other than slightly increased costs, I feel.
 
BarryWinks said:
Why would we need any of those? Looks like an obsession with signings for me.

If Mainoo is unavailable we have Mount/Scot/Casemiro as covers, assuming we close Ugarte, with Bruno as starters. We also won't be getting serious in the Europa League/FA cup until February at most so we have enough time to blend in Collyer in the early stages of both competitions.

Undecided about a LB just because of Mazraoui and Shaw's injury issues and Martinez having a horrid time last season with fitness.
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I just feel we need to swap (not literally obviously) Eriksen for someone younger with a similar profile to Kobbie. Mount is good for pressing but don't see him as someone to offer cover in that position.
 
DOTA said:
If it's just fiddling the books and there's no other purpose to it then surely it should be yes.
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It is not just fiddling with the books. The "obligation" is based on a pre-negotiated set of conditions. Some potential examples:
  • We are obliged to buy Ugarte at X price if he appears in at least 50% of our matches this season
  • We are obliged to buy Ugarte at X price if we qualify for the Champions League this year
  • We are obliged to buy Ugarte at X price so long as we aren't relegated
The exact terms depend on what we can get PSG to agree to. The last bullet would truly be an obligation for a club like United, but is useful if you're a lower level club.

Either way, the accounting is much different this year than a full transfer. For this season Ugarte's fee amortization would be £0.

I wish people would stop so confidently saying things that are incorrect on this forum. Try reading the book "The Price of Football" if you want to learn more details.
 
Was hoping we get him in for the pool game but it’s looking more and more difficult. Bench best option, that is if he’s in the door by Monday
 
bb8 said:
It is not just fiddling with the books. The "obligation" is based on a pre-negotiated set of conditions. Some potential examples:
  • We are obliged to buy Ugarte at X price if he appears in at least 50% of our matches this season
  • We are obliged to buy Ugarte at X price if we qualify for the Champions League this year
  • We are obliged to buy Ugarte at X price so long as we aren't relegated
The exact terms depend on what we can get PSG to agree to. The last bullet would truly be an obligation for a club like United, but is useful if you're a lower level club.

Either way, the accounting is much different this year than a full transfer. For this season Ugarte's fee amortization would be £0.

I wish people would stop so confidently saying things that are incorrect on this forum. Try reading the book "The Price of Football" if you want to learn more details.
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Good post. I think it’s a smart move myself with cash still apparently a bit of a problem, at least according to one of the fanzines I read before the game on Friday.

INEOS said more than once we wouldn’t be able to sort everything in one window- I think five signings to compete in the first team squad represents a very good start, better than I expected.

Hopefully we can move a few on permanently before the deadline now. I reckon there’s at least five who can go where we don’t even need to consider a replacement- just makes the squad a little less bloated and balances the book at least a bit.
 
bb8 said:
It is not just fiddling with the books. The "obligation" is based on a pre-negotiated set of conditions. Some potential examples:
  • We are obliged to buy Ugarte at X price if he appears in at least 50% of our matches this season
  • We are obliged to buy Ugarte at X price if we qualify for the Champions League this year
  • We are obliged to buy Ugarte at X price so long as we aren't relegated
The exact terms depend on what we can get PSG to agree to. The last bullet would truly be an obligation for a club like United, but is useful if you're a lower level club.

Either way, the accounting is much different this year than a full transfer. For this season Ugarte's fee amortization would be £0.
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Thank you, this was the answer I was looking for.

I wish people would stop so confidently saying things that are incorrect on this forum. Try reading the book "The Price of Football" if you want to learn more details.
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I am absolutely not going to read a book about football finance :lol: I'm glad it exists for other people to read and pass on their knowledge though.
 
DOTA said:
If I'm reading correctly you are saying there is no downside for PSG? Why are not all transfers done this way then, if it makes one side's books look temporarily prettier at no cost to the other party?

I tried googling and I got PWC telling me they are just counted as normal transfers, which would surely make them pointless, so seems unlikely.

https://viewpoint.pwc.com/dt/gx/en/...hips-with-play/1-9-loans-with-obligation.html
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There isnt unless the seller is adamant on having all of the funds up front. In this case yes the player is transferred and its seen as done and dusted but in a books and records sense which FFP accounts for the loan amount hits now and the remainder next year as these amounts are in and out depending on the fiscal year they took place if that makes sense? The word deferred being the key indicator here. Monies could be earned on an asset (the player in this case) but defferred and susequently paid at another time. Similar things happen with investments that pay monthly and quarterly. If the collections dont cover all that is due from A to F the higher classes be it A, B and C get paid first. D to F are then deferred until such a time as the asset matures and all collections from the life of the deal are collected and the distributed accordingly. Thats probably a complicated way of it being viewed but should summarise how loan and olbligation work in terms of meeting our FFP requirement and PSG just getting him off their books.
 
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However it goes I'm just desperate for us to complete this one. What we can do as a team improves drastically if he comes in this season. Good for Casemiro and Mainoo and our overall handling of matches.
 
I see a few people in a few threads saying the obligation to buy is bad because we'd have to buy him even if he flops. It should be remembered that this is an alternative to just buying him now and we'd be no better or worse off if he flopped this season. I think this is a good move if we can get it done.
 
Does not matter if it's an outright purchase or loan with an obligation/option, the club should still negotiate a reasonable fee, if we believe the reports, PSG are demanding anything between €60M - €70M, that's far too high for Ugarte, a player they want to get rid of, I am hoping the total fee does not exceed €50M mark, I remember they didn't pay us the full fee we spent on Di Maria, so we should do the same.
 
croadyman said:
Gives me hope of still signing a LB, would like an 8 to rotate with Mainoo too, however no chance we sign SEVEN senior players in one window
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Seven sounds a lot until you consider our departures.

We've lost Varane, Martial, AWB, Greenwood, Kambwala, Alvaro Fernandez, Donny VdB, and probably 2 from Lindelof, Hannibal, McTomminay, Eriksen, Pellistri to go, even before we consider longer shot departures like Sancho or Casemiro.

I know a lot of these didn't play much last year due to injury, I think 6 signings is the minimum we need, the four we've got already, a midfielder and a LB. A seventh wouldn't be outrageous if we have more departures.
 
What is it with comments like “loan with option is better”? That goes without saying but we want to buy, PSG KNOW that, and they want to sell. The loan with obligation is a purchase. PSG have no reason to loan him on the never never.

I think a fair price is 5 million under what they bought him for with the rest add ons giving their money back. Lower would be great and I think we might get that.
 
foolsgold said:
Seven sounds a lot until you consider our departures.

We've lost Varane, Martial, AWB, Greenwood, Kambwala, Alvaro Fernandez, Donny VdB, and probably 2 from Lindelof, Hannibal, McTomminay, Eriksen, Pellistri to go, even before we consider longer shot departures like Sancho or Casemiro.

I know a lot of these didn't play much last year due to injury, I think 6 signings is the minimum we need, the four we've got already, a midfielder and a LB. A seventh wouldn't be outrageous if we have more departures.
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Think this deal gets done and if we can sell Pellistri and Sancho then could see us getting LB too. Certain shutters will come down for this summer then, yes a CM and proven goalscorer would have been a cherry but maybe something to look at come January.
 
Just registered with me that we just got the 'Here We Go™' from Fab in regards to Joao Felix to Chelsea yesterday so I'm fully expecting this deal to be wrapped up over the next day or 2 with Joao Mendes now able to turn his attention towards finalizing it
 
No reason to overpay on this one. Wait em out. Everything points towards a sale - he's not even in the squad. Don't get Woodwarded
 
FrankWhite said:
I often wonder this myself. Why wouldn't you just sell 50m over 5 years to a financier for 45 million now? Maybe because you'd probably get offered a lot less than 45 because of net present value perhaps.
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This happens quite a lot.

Deals are done and then clubs can re finance that outlay with a third party lender. They will have to pay interest over the loan term but it massively helps their cash flow.

You will find that nearly all Release Clause activation deals have this in it as the selling club don’t want to sell and in order to activate the clause a condition is all the money up front at once. Most clubs run on staggered yearly payments to transfer outlays and similarly with incoming payments so the effects are much less harsh on cash flow.

With Zirkzee we agreed to pay Bologna a bit above the release fee so that we could agree to pay in installments. Many clubs use their own preferred loan agreements to receive back the transfer payments post deal to give them better terms.

With Ugarte - think it’s just a case of agreeing numbers in the deal, if it’s a loan with obligation then that allows us to do the deal now without having to rush someone out of the door for a (low ball) transfer fee, however, we still then have players wages, their depreciation, the new incoming wages to pay so ideally getting excess players out is the preferred option.

Getting Sancho out, even on loan has got to be the highest priority to free up room for new wages.
 
Even if we get Ugarte, we will need to buy minimum of 2 midfielders next season to replace Casemiro and Eriksen.

If we do the loan deal, we will need to buy Ugarte as well. Thats a minimum 120-150M outlay just for midfield.

I cant see us buying 3 midfielders next season, hence why I would prefer this to be done this season. This is why selling McT was so important.
 
they will get done , hopefully in time that he’s fit for the Liverpool game
 
Red00012 said:
they will get done , hopefully in time that he’s fit for the Liverpool game
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Unless Casemiro gets injured before then, he will not start the Liverpool game if he joins. First game will probably be after the international break. He has not played at all in pre-season.
 
DOTA said:
If I'm reading correctly you are saying there is no downside for PSG? Why are not all transfers done this way then, if it makes one side's books look temporarily prettier at no cost to the other party?

I tried googling and I got PWC telling me they are just counted as normal transfers, which would surely make them pointless, so seems unlikely.

https://viewpoint.pwc.com/dt/gx/en/...hips-with-play/1-9-loans-with-obligation.html
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MIght be wrong but while they can count it as a transfer on their books this year they physically dont receive any of the cash until next year when he is officially sold. No dohbt they will make do with a loan fee in thr meantime but think the only downside.is the loaning club need to wait on the cash for 12 months.
 
Highfather_24 said:
Even if we get Ugarte, we will need to buy minimum of 2 midfielders next season to replace Casemiro and Eriksen.

If we do the loan deal, we will need to buy Ugarte as well. Thats a minimum 120-150M outlay just for midfield.

I cant see us buying 3 midfielders next season, hence why I would prefer this to be done this season. This is why selling McT was so important.
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Next summer is our summer of midfield signings for sure because nearly the entire midfield group will have one year or less on their contracts by then. Just gutted Joao Neves couldn't wait one more year. We would 100% have signed him next summer.
 
Dannn411 said:
Next summer is our summer of midfield signings for sure because nearly the entire midfield group will have one year or less on their contracts by then. Just gutted Joao Neves couldn't wait one more year. We would 100% have signed him next summer.
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We will also need a Left back, forward, and possibly GK/CF next season too, apart from the 2 midfielders. We should NOT leave Ugarte for next season, it will only hamper our buying ability next season.
 
I’m still flabbergasted multiple posters were left perplexed as to what a “loan with an obligation to buy” is.

That’s been around for donkeys and multiple clubs have used them. Absolutely bizarre
 
Dannn411 said:
Next summer is our summer of midfield signings for sure because nearly the entire midfield group will have one year or less on their contracts by then. Just gutted Joao Neves couldn't wait one more year. We would 100% have signed him next summer.
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If that's the case, we have a whole season of watching us get walked through week in week out
 
Are we getting him on loan because we don't have the money to complete a permanent move?
 
With PSR the next check point is June 30th 2025...so United would have the January window and an early exit in the Summer 2025 window to balance the books.

Get Ugarte in asap.

He would be a big plus against Liverpool.
 
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