The Unreliable Rumours Discussion Thread (Part 1)

[Lowton_Red]

@redfanman

@Lowton_Red

I really don’t understand how Real can finance a bid of €151.8 million for Mbappe.

Technically Real were already balance sheet insolvent at the end of the 2019/20 season. Their total liabilities exceeded their total assets by €355m, of which €203m was short term debt i.e. due within one year.

Since then their financial situation is more likely to have worsened rather than improve.

Consequently, any cash element of their bid for Mbappe will have to be funded entirely by borrowing, probably taking their net debt to well over half a billion Euros.

They are going to have to sell one hell of lot of extra merchandise to cover that debt, even before finding Mbappe’s wages.

Yes, most likely from borrowing more money. I’m a little surprised they are moving now instead of next summer - there must be more going on behind the scenes than we are aware of, but I always got the impression that Real Madrid is a cash generating monster.

From looking at the update on the Real Madrid website and Transfermarkt, they have reduced net debt on the playing side to about 45m euros, (I think they hold approximately 125m in cash) with about 360m available through various credit facilities. Last summer they raised about about 91m from sales and didnt bring any new players in and this year 71m with Alaba in on a ‘free’. There may be more that can go out this summer either permanently or on loan?

They have some big earners dropping off the wage bill next summer (Marcelo, Modric, Bale and Benrahma) unless they give out new contracts that may help them solidify their finances

As ever, the devil is in the detail. The headline statement in the Real update does claim that net debt has been reduced to €46 million, however it is only much later in the update that we discover that:

“The Net Debt as of 30 June 2021, excluding the stadium remodelling project, amounts to €46 million”

Real is very fond of excluding the stadium remodelling project, and it only very much later we discover why:

“The amount of the investment recorded in the 2020/21 financial year was €166 million, including the financial costs incurred during the construction period. This brings the cumulative investment up to 30 June 2021 to €279 million.

During this financial year, in July 2020, the second drawdown of the loan amounting to €275 million was made; bringing the total loan drawn down to €375 million by 30 June 2021 (the first drawdown of €100 million took place in July 2019).”

So, in reality as of 14th July 2021 (the date of the club statement) the net debt figure was not €46 million, but rather nearer €421 million.

And it was so very fortunate that the update was released on the 14th of July and not say on the 30th of July, as the figure would then have had to include the final drawdown of €200 million, making Real’s true figure of net debt to be about €621 million.

As for the cash balance, which as per normal excludes a certain remodelling project:

“The Club closes the 2020/21 financial year with a cash balance, as at 30 June 2021, of €122 million, excluding the stadium remodelling project.”

This cash balance of €122 million is in reality borrowed money:

“In order to offset the financial impact of the loss of income caused by Covid-19, in April 2020 the Club secured new bank financing in the amount of €205 million, of which €155 million correspond to four loans with a 1-year grace period and a 5-year maturity and €50 million to a credit facility with a 3-year maturity.”

As you say, Real has an extended line of credit:

“As of 30 June 2021, the Club has unused credit facilities amounting to €361 million, which, together with its cash balance, enables it to comfortably meet its expected payment commitments.”

So they could easily borrow the money to buy Mbappe.

And, all will be well…

…until the banks ask for their money back.

[Draexnael]

Wonder what the king will buy off then and return for free this time?

[redfanman]

@redfanman

I would add that we have seen a number of cases over the last decade where Real Madrid have gone through the motions on spending big for a player but not gone through with it

Interesting comments from PSG…

https://twitter.com/MelissaReddy_/status/1430519644859809807?s=19

[WooltonRed]

Real Madrid we’re probably shitting themselves, in case PSG accepted the bid.

[Nobluff]

@WooltonRed

Real Madrid we’re probably shitting themselves, in case PSG accepted the bid.

I’m Curious, does the offer come with payment terms or does that normally come after the fee is accepted?

[RER]

Whats the concern with AFCON.

[Limiescouse]

@RER

Whats the concern with AFCON.

Comes in the middle of the season and will cause us to miss Mo and Mane, typically for the majority of the month

[Iftikhar]

@Limiescouse

@RER

Whats the concern with AFCON.

Comes in the middle of the season and will cause us to miss Mo and Mane, typically for the majority of the month

Keita

[norwegian_wood]

@Neukölln

I didn’t know which thread to ask this question, or make a poll or whatever.

With 7 days til window close, how are we feeling?

What is the overall consensus opinion amongst supporters here at TAN:

A.) No new players needed; squad is properly equipped to compete in all competitions.

B.) Would prefer (position) be signed for depth.

C.) Other; explain

For me, I still feel like we are one player short. I get Ox and Millie were out last week so 2 keepers made the bench but that’s all it takes. I’m not asking for a £50M player but I still think we need one more.

I think we’re equipped for what I’m hoping for: title challenge and a good CL run. Wouldn’t object if we got an extra player in, but I’m not thinking much about it. I’m thinking more about whether or not there was something in the rumoured interest in the likes of Neuhaus or Bissouma with an eye on next summer, rather than getting anyone in before this window closes. We could always do something in january as well if possible, it doesn’t have to be now or next summer.

The main reason I’d be advocating signing someone now would be because it would be fun and a bit unexpected - and that’s not really a good reason, is it. For the club at least.

So I guess I’m on option C.

[Limiescouse]

@Iftikhar

@Limiescouse

@RER

Whats the concern with AFCON.

Comes in the middle of the season and will cause us to miss Mo and Mane, typically for the majority of the month

Keita

Sure. Guinea qualified, but, with respect to Naby, he is less of an obvious loss and likely to be gone for less time given the respective strength of the sides

[WooltonRed]

I’m not qualified to answer that.

[RER]

Its been stated any one of them make the final its only 3 games missed FA Cup 3rd round Palace and Brentford in the league is that such an issue.

[AnfieldRdDreamer]

There could still be quarantine periods to take into account with AFCON.

[mattyhurst]

I assume we won’t send them if there is.

[Iftikhar]

They will also miss the winter break.

[AnfieldRdDreamer]

I wouldn’t feel confident making that assumption yet. We’ve actually got no in built rights for them to be made available straight after a FIFA competition I would assume. This isn’t like qualifiers or friendlies.

[mattyhurst]

If Quarantine procedures are in place no one should be going.

In fact international football should still not be taking place.

That’s a personal view. I’m not sure Egypt are much cop eithier if your looking at teams progressing.

[Red_Submarine]

The chances of him coming back in a full body cast are the main concern with Naby for me.

[RER]

Yeah buy its not a game.

[Redbj]

On the face of it of course you are right, but they paid a massive wedge for him so that was probably factored in to a certain degree.

Mbappe not being the greatest example, but I’m sure it’s a thought process in some of the more ‘punt’ transfers for younger footballers