Josh Key...

[andrew p long]

One caveat I would make is have we actually pushed yet for the Tribunal to take place ?
Whilst it has become the norm these days for transfer fees to be spread over several installments, sometimes over the length of the players new contract, that is not the case with fees decided by a tribunal. The full compensation fee (excluding add ons) becomes payable jmmediately. Could there be a case where it was preferable to receive the money after the end of our "tax year" to avoid mitigate taxation, given the exceptional amounts of transfer income arriving from Collins, Nombe and Ampadu ? Perhaps one of our resident "financial experts" may like to advise us ?

Quite possibly. If we will make a profit anyway this financial year* (year ends 30 June) then I think we will end up paying Corporation Tax (25%) on the lump sum Tribunal fee for Key if determined this financial year. Whereas if we otherwise make a loss next financial year and the Key lump sum fee is determined in that financial year then we only pay Corporation Tax to the extent that the fee tips us into profit.

(E&OE. Experts such as Alasdair20000 and FBH will be able to give a more definitive answer)

So for this technique to work means spinning out the Tribunal decision until July. A different reason for delay might be the hope that we can negotiate/reach agreement without the costs of a Tribunal.

* a profit this year seems inevitable in view of the Nombe and Ampadu money. I think Collins may fall into then year ending 30 June 2023.

 

[Super Ronnie Jepson]

Quite possibly. If we will make a profit anyway this financial year* (year ends 30 June) then I think we will end up paying Corporation Tax (25%) on the lump sum Tribunal fee for Key if determined this financial year. Whereas if we otherwise make a loss next financial year and the Key lump sum fee is determined in that financial year then we only pay Corporation Tax to the extent that the fee tips us into profit.

(E&OE. Experts such as Alasdair20000 and FBH will be able to give a more definitive answer)

So for this technique to work means spinning out the Tribunal decision until July. A different reason for delay might be the hope that we can negotiate/reach agreement without the costs of a Tribunal.

* a profit this year seems inevitable in view of the Nombe and Ampadu money. I think Collins may fall into then year ending 30 June 2023.

There must be some sort of ratcheting calculation though? Football finances (and inflation) have moved on since Ampadu moved.

 

[andrew p long]

There must be some sort of ratcheting calculation though? Football finances (and inflation) have moved on since Ampadu moved.

Sorry, I should perhaps have been clearer. The Ampadu money being taken into account this financial year is the 20% sell on we became entitled to when Chelsea sold Ethan to Leeds. As the sale was reported to have been for £7m (plus add ons) we became entitled to £1.4m, which should be included in this year's accounts.

 

[Super Ronnie Jepson]

Sorry, I should perhaps have been clearer. The Ampadu money being taken into account this financial year is the 20% sell on we became entitled to when Chelsea sold Ethan to Leeds. As the sale was reported to have been for £7m (plus add ons) we became entitled to £1.4m, which should be included in this year's accounts.

And my point should have been clearer. I meant the initial fee. Times have moved on. If we sold Ampadu today I'd expect the initial fee to be substantially more than £850k.

 

[Grecian Max]

As I said, you would be wise not to think of this as a transfer fee or anything of the like. Archie signed for Peterborough for a transfer fee, not for negotiated compensation as a free agent at end of his contract, they are two very different things.

I know this - we would have been due compo but Peteborough coughed up to avoid that. I'm well aware of how the system works, did a lot of reading up on it in the summer so am not getting confused, thanks for the patronising tone though

So they are not two very different things - one club has risked going to tribunal, one didn't.

I'm not expecting seven figures and never said so, what I mean is it'll be in the ball park of Archie's, he also went up a division unlike Archie.

Peterborough aren't idiots, they haven't gone and paid 400k+ over the odds for Collins

 

[Red Bill]

IMO if you (or anyone else) are expecting an initial figure in the region of 900k for Josh then you are grossly overestimating what figures the PFCC usually attributes to players and clubs.

For reference, we were awarded an initial £850k for Ethan. Ethan had already played youth international football, made his first team debut at 15 and had substantiated interest from numerous clubs. It would be unheard of for us to receive a similar figure for a player who's signed for a Championship team and had more of a 'standard' route into senior football.

As I said, you would be wise not to think of this as a transfer fee or anything of the like. Archie signed for Peterborough for a transfer fee, not for negotiated compensation as a free agent at end of his contract, they are two very different things.

Some clubs will conclude a deal prior to tribunal stage purely so that they can have favourable payment terms alongside not having to go through and engage with the process. Just because a team paid that amount preventing it getting to tribunal stage, does not mean that they would have expected it to be higher if it had been. And it isn't even always the buying club who push for an early agreement. We could have quite easily incorporated a 30/35/40% sell on into the agreement with Peterborough, something we would certainly not have gotten if Archie had run his contract down and left as a free agent.

Yes, some of those fees are from a fair while ago, but the sums involved with the tribunal process have not seen the same hyperinflation that transfer fees have, the process and logic that goes into the decisions is largely the same. Hence why I have my prediction pegged at just under 500k. That would account for some development in the market, increased costs in developing players etc and also some well submitted evidence from our side given that we've been through the process before.

I think it'll be (roughly) 450k initially, with a further potential 250k in add ons and 20% sell on.

Obviously, I hope for the club's sake I am completely wrong and we do get 7 figures but I can't see it.

I'm not sure this is entirely correct. Archie was out of contract, so it wasnt a transfer fee, it was still a compensation payment. The difference between Archie and Josh is that Peterborough offered us a compensation payment that was acceptable to us whereas Swansea didn't, and therefore the compensation amount has to be decided by tribunal. (I think?)

 

[SaintJames]

Based on what we got for Arch despite not being a comparable tribunal situation does allow us to gauge what could be a likely outcome for Josh. Archie played lots more games than Josh, was our captain and we developed him from 8 unlike Josh who came to us at 13. My guesstimate has always been around 400-550k with appearance add ons etc.

 

[Exiled_Grecian]

I know this - we would have been due compo but Peteborough coughed up to avoid that. I'm well aware of how the system works, did a lot of reading up on it in the summer so am not getting confused, thanks for the patronising tone though

So they are not two very different things - one club has risked going to tribunal, one didn't.

I'm not expecting seven figures and never said so, what I mean is it'll be in the ball park of Archie's, he also went up a division unlike Archie.

Peterborough aren't idiots, they haven't gone and paid 400k+ over the odds for Collins

No patronising tone intended. Even if you aren't expecting seven figures, using Archie as the marker is incorrect and is not comparable. It might be for us as City fans as we see two good young players leave around the same time and therefore expect the same amount, but that is not how the system works. The Archie fee will have no bearing on the PFCC's decision nor will they factor it into their calculations.

They are two different things, which should have been a key take-away from your summer reading. PFCC rulings are not designed to reflect a player's perceived transfer fee value in the eyes of the former club, they are a reward for the development of the player - totally different concepts.

I'm not saying they are idiots, but their owner said it himself that they were competing with Championship clubs for Archie's signature, maybe they paid a higher upfront fee spread across installments, with less contingent sums and balanced it off with a higher sell on percentage. Swansea may have been the only substantiated interest in Josh hence why they were more inclined to allow things to reach tribunal stage.

All I'm saying is temper your expectations slightly to avoid any potential disappointment, just friendly advice. As I've said, if I'm wrong, I'll be delighted. I really hope they make a decision that I believe does fairly reflect the work the club did in developing Josh into the player he is and can potentially become. But having dealt with this process multiple times, I personally have little faith.

I'm not sure this is entirely correct. Archie was out of contract, so it wasnt a transfer fee, it was still a compensation payment. The difference between Archie and Josh is that Peterborough offered us a compensation payment that was acceptable to us whereas Swansea didn't, and therefore the compensation amount has to be decided by tribunal. (I think?)

Peterborough signed Archie on 28 June, which means he was still under contract and therefore, this was a transfer. It would only have been a compensation agreement if Peterborough signed Archie following the expiration of his contract at Exeter, which is what happened with Josh & Swansea.

 

[Exiled_Grecian]

And my point should have been clearer. I meant the initial fee. Times have moved on. If we sold Ampadu today I'd expect the initial fee to be substantially more than £850k.

Without intending to bang on, in Ethan's case, if the exact same situation happened today, you'd be unlikely to see much change in the initial fee. The factors at hand would have still been the same (i.e. Cat3 Academy, Youth International, Interest from Clubs, <10 appearances, signing for Premier League club...)

If we sold him, then yes, we would surely command a much higher fee, but if it went to tribunal, any difference would likely be minimal.

 

[Super Ronnie Jepson]

Without intending to bang on, in Ethan's case, if the exact same situation happened today, you'd be unlikely to see much change in the initial fee. The factors at hand would have still been the same (i.e. Cat3 Academy, Youth International, Interest from Clubs, <10 appearances, signing for Premier League club...)

If we sold him, then yes, we would surely command a much higher fee, but if it went to tribunal, any difference would likely be minimal.

But the factors that determine the fee can't still have the same value now as they did in 2017, Shirley? There must be some form of inflation-proofing?