Income from potential transfer fees

[houstonhibbee]

What is the best use of potential income from transfer fees?

If we get say 3mill for JC then that equates to 30k per week over 2 years in additional funds for wages. That could make a huge difference to our current ceiling/ max in terms of attracting quality players potentially ones out of contract that we dont have to pay transfer fees for.
Thoughts?

[Ozyhibby]

Buy pubs in Essex. A sure thing.


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[bingo70]

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What is the best use of potential income from transfer fees?

If we get say 3mill for JC then that equates to 30k per week over 2 years in additional funds for wages. That could make a huge difference to our current ceiling/ max in terms of attracting quality players potentially ones out of contract that we dont have to pay transfer fees for.
Thoughts?

You can add mcginns potential transfer fee to that as well.

What I'm not sure of is what happens after the three years you've spoken of, do we then need to start making massive cuts?

I suppose the question is how do you spend massive windfalls that you can't budget for receiving in the future?

Looking back I can see why Petrie chose to spend it on the infrastructure but there's nothing left infrastructure wise to pay for.

[hibs#1]

I'd imagine if we did come into money most would go towards wages might a little bit spent on transfers for younger players with good sell on potential again.

We're in a good position just now, we have all the infrastructure in place and most of our income can go on playing squad.
Still need to be savvy with any money coming so we can keep building in the future and so on.

[Ozyhibby]

In my mind the money should be invested and the income from it used to fund the wage bill going forward. That way it benefits the club for the long term.
Spending it over a couple of years and then having to make large cut backs would be very destabilising.


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[bingo70]

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In my mind the money should be invested and the income from it used to fund the wage bill going forward. That way it benefits the club for the long term.
Spending it over a couple of years and then having to make large cut backs would be very destabilising.


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Sorry if this is a stupid question but invested in what? I assumed you meant the playing side but your last sentence seems to contradict that.

Genuine question by the way, not being arsey.

[houstonhibbee]

not advocating a boom and bust scenario obviously but the drift of my post is that a few million in transfer fees leaves a significant amount of money to increase the wage bill resulting in the potential to attract big names/ quality players........

[bingo70]

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not advocating a boom and bust scenario obviously but the drift of my post is that a few million in transfer fees leaves a significant amount of money to increase the wage bill resulting in the potential to attract big names/ quality players........

I think it's a good question.

The obvious answer is to plough it all into the team and short term I'd be delighted with that, longer term though I wonder if that's do more harm than good.

[houstonhibbee]

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I think it's a good question.

The obvious answer is to plough it all into the team and short term I'd be delighted with that, longer term though I wonder if that's do more harm than good.

presumably it could pay for the wages of 2 year deals for the likes of Ambrose, Henderson, Commons, Allen.................and a quality forward to replace JC

[CropleyWasGod]

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not advocating a boom and bust scenario obviously but the drift of my post is that a few million in transfer fees leaves a significant amount of money to increase the wage bill resulting in the potential to attract big names/ quality players........

The problem with that is, if you lift the wage ceiling in the short-term, every player who comes near the end of their contract will be looking to have their wages increased to the new ceiling. That's storing up financial issues down the line, not to mention dressing-room issues.

My preferred option would be to increase the size of the squad, to give us strength in depth. That, IMO, is a more sustainable model. Indeed, that's the kind of model we've been using since LD and GC came in.

[houstonhibbee]

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The problem with that is, if you lift the wage ceiling in the short-term, every player who comes near the end of their contract will be looking to have their wages increased to the new ceiling. That's storing up financial issues down the line, not to mention dressing-room issues.

My preferred option would be to increase the size of the squad, to give us strength in depth. That, IMO, is a more sustainable model. Indeed, that's the kind of model we've been using since LD and GC came in.

That is in direct contradiction to the quality not quantity mantra I thought was in force.
I agree we need strength in depth but also everyone is clamoring for an improvement in quality - so a bit of both.
Doesn't matter what the ceiling is - you will still have to manage the scenario you describe. That's life.

[patlowe]

Do we not still have some long-term debt that we are paying off over a period of time? If we use any transfer fees to pay that off then surely that will save us future payments, money which could be put towards the playing squad on a sustainable basis. I never was good with economics though...

[wookie70]

You could always invest it in performance related pay for high finishes in the league and long cup runs. Not on a player basis but a squad basis.

[Ozyhibby]

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Sorry if this is a stupid question but invested in what? I assumed you meant the playing side but your last sentence seems to contradict that.

Genuine question by the way, not being arsey.

Def not a stupid question and the answer is I really don't know. Maybe few different things. Maybe invest it in a fund with one or two of the big asset management companies (Aberdeen asset management etc).
Say we take in £5m for McGinn and Cummings. It's possible that the income from that could be about £200k pa. That's enough to find two players at the top of our wage bill before a single season ticket is sold. And it is forever.
Say in two years time we get another £2m for Shaw then we add that to it and suddenly the income from the fund is paying for three players. Or we keep it at 2 players but we use some to keep season ticket prices low to attract more fans.
Just a thought and I know nothing of high finance.
Blowing it all over 2-5 years just seems like a waste to me when it can provide income to the club in perpetuity.



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[CropleyWasGod]

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That is in direct contradiction to the quality not quantity mantra I thought was in force.
I agree we need strength in depth but also everyone is clamoring for an improvement in quality - so a bit of both.
Doesn't matter what the ceiling is - you will still have to manage the scenario you describe. That's life.

The model is "3 players for every position". 2 of first team standard, 1 development.

I'm not sure we have that at the moment, so it's still a work-in-progress.

[danhibees1875]

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Do we not still have some long-term debt that we are paying off over a period of time? If we use any transfer fees to pay that off then surely that will save us future payments, money which could be put towards the playing squad on a sustainable basis. I never was good with economics though...

We do. But we have manageable interest free payments (500k p.a. over 10 years to repay a £5m debt) thanks to STF.

So using any potential transfer income to pay off that would be wasteful.

I think one person talked of investments in a financial sense - shares, bonds, etc - which I think would be a very different tangent for the club to take. The concept is sound of having a regular dividend while (hopefully) maintaining/increasing the capital invested, but I don't think that will be happening. :

I think we'd see 2-3 decent quality players come in at the higher end of our wage structure. But that would only realistically cost c.£1.5m over 3 years. We've not been in the position before where excess cash wouldn't go towards paying off debt or improving infrastructure... although there is those pesky corners that could be filled in.

[houstonhibbee]

[QUOTE=Ozyhibby;5039040]Def not a stupid question and the answer is I really don't know. Maybe few different things. Maybe invest it in a fund with one or two of the big asset management companies (Aberdeen asset management etc).
Say we take in £5m for McGinn and Cummings. It's possible that the income from that could be about £200k pa. That's enough to find two players at the top of our wage bill before a single season ticket is sold. And it is forever.
Say in two years time we get another £2m for Shaw then we add that to it and suddenly the income from the fund is paying for three players. Or we keep it at 2 players but we use some to keep season ticket prices low to attract more fans.
Just a thought and I know nothing of high finance.
Blowing it all over 2-5 years just seems like a waste to me when it can provide income to the club in perpetuity.


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its a matter of taking reasonable and calculated risk to use funds wisely but also improve performance on the pitch that in itself generates additional money in terms of final position, tv fees, advertising, season ticket sales, merchandising etc. Primarily we are in the sports industry not investment banking.

Maybe we should be called Hedge Fund Hibs FC

[Ozyhibby]

[QUOTE=houstonhibbee;5039074]

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Def not a stupid question and the answer is I really don't know. Maybe few different things. Maybe invest it in a fund with one or two of the big asset management companies (Aberdeen asset management etc).
Say we take in £5m for McGinn and Cummings. It's possible that the income from that could be about £200k pa. That's enough to find two players at the top of our wage bill before a single season ticket is sold. And it is forever.
Say in two years time we get another £2m for Shaw then we add that to it and suddenly the income from the fund is paying for three players. Or we keep it at 2 players but we use some to keep season ticket prices low to attract more fans.
Just a thought and I know nothing of high finance.
Blowing it all over 2-5 years just seems like a waste to me when it can provide income to the club in perpetuity.


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its a matter of taking reasonable and calculated risk to use funds wisely but also improve performance on the pitch that in itself generates additional money in terms of final position, tv fees, advertising, season ticket sales, merchandising etc. Primarily we are in the sports industry not investment banking.

Maybe we should be called Hedge Fund Hibs FC

I'm a Joiner but I still get Standard Life to look after my savings for me. I don't go around telling people I'm a hedge fund although it's possible that's what Standard life do with it. My suggestion was for a way of Hibs saving the money for the future not a change in focus for the club.


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[Just Alf]

[QUOTE=Ozyhibby;5039094]

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I'm a Joiner but I still get Standard Life to look after my savings for me. I don't go around telling people I'm a hedge fund although it's possible that's what Standard life do with it. My suggestion was for a way of Hibs saving the money for the future not a change in focus for the club.


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Made sense to me, would also eventually pull us ahead of other teams not following the same path.... A sort of legal EBT's scenario!

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[Brooster]

Im holding out for £6m for JC and SJM. Nothing less.

[Hibernia&Alba]

Id rather we keep hold of our top players for the SPL. It wouldn't be easy to replace the likes of Cummings. Fingers crossed we start next season stronger and not worried because some of our top players have left.

[houstonhibbee]

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Id rather we keep hold of our top players for the SPL. It wouldn't be easy to replace the likes of Cummings. Fingers crossed we start next season stronger and not worried because some of our top players have left.

I think that goes without saying. Its a hypothesis based on the alternative happening for one of the two which has a reasonable probability of becoming reality so worth discussing

[Brightside]

You need to be careful when you say we could fund additional wages. The current structure isn't just there to keep the budget tight. It gets very messy in a club if you have some players on say 5k and the rest on 2k max. The structure it there to create harmony for the squad. Also if you use that money to fund more expensive players what do we do when that cash runs out?

[sixtwo]

If we got £2m for Cummings and similar for McGinn I'd be looking for the likes of Stokes, Mallan, Henderson and Griffiths to be linked with us. TBH I'd blow the majority on a deal for Griffiths. He guarantees goals. The ST sales would be at 14k + with those signings

[Brightside]

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If we got £2m for Cummings and similar for McGinn I'd be looking for the likes of Stokes, Mallan, Henderson and Griffiths to be linked with us. TBH I'd blow the majority on a deal for Griffiths. He guarantees goals. The ST sales would be at 14k + with those signings

Griffiths well never be signing for us until he's near the end of his career. Hibs can;t even get close to his wage requirements.

[houstonhibbee]

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You need to be careful when you say we could fund additional wages. The current structure isn't just there to keep the budget tight. It gets very messy in a club if you have some players on say 5k and the rest on 2k max. The structure it there to create harmony for the squad. Also if you use that money to fund more expensive players what do we do when that cash runs out?

In my personal experience it is my responsibility to get paid as much as I can based on my training and experience and its none of my business what anyone else gets paid. Footballers and their agents are not babies.
if they are signed up on two or three year contracts the contracts run out before the money does but as I said earlier not suggesting a boom and bust scenario, needs managed of course but several million pounds from transfer income significantly increases our potential spending power on increased wages which is my point.

[Hibernia&Alba]

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I think that goes without saying. Its a hypothesis based on the alternative happening for one of the two which has a reasonable probability of becoming reality so worth discussing

If we lose Cummings, even for a good fee, we'll be hard pushed to replace him with someone of equal ability or better. English prices are ridiculous and there's a dearth of talent up here. Perhaps we'd need to look for a gem abroad.

[Ozyhibby]

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In my personal experience it is my responsibility to get paid as much as I can based on my training and experience and its none of my business what anyone else gets paid. Footballers and their agents are not babies.
if they are signed up on two or three year contracts the contracts run out before the money does but as I said earlier not suggesting a boom and bust scenario, needs managed of course but several million pounds from transfer income significantly increases our potential spending power on increased wages which is my point.

Mature people think like that, footballers in their twenties don't.


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[hibs#1]

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You need to be careful when you say we could fund additional wages. The current structure isn't just there to keep the budget tight. It gets very messy in a club if you have some players on say 5k and the rest on 2k max. The structure it there to create harmony for the squad. Also if you use that money to fund more expensive players what do we do when that cash runs out?

I get what your saying about squad harmony but surely every club has players on different pay grades? Take real Madrid for example Ronaldo will be the highest earner on say 300 grand a week,and maybe marcelo would be on 100 grand a week.marcelo whilst a 1st choice player can't expect the same as Ronaldo.
If we signed stokes and made him our highest earner then Stevenson couldn't really expect the same wage as him.

[houstonhibbee]

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If we lose Cummings, even for a good fee, we'll be hard pushed to replace him with someone of equal ability or better. English prices are ridiculous and there's a dearth of talent up here. Perhaps we'd need to look for a gem abroad.

Im struggling with this. Why would Hibs "lose" a prize asset and leave themselves in a position that they are worse off as you suggest. That just simply won't happen. Hibs are in control and not at everyone's mercy.