It ain't necessarily so

Future liabilities, like the full value of all players' wages for the rest of their contracts, sit on the balance sheet. If we're at the limit or near it for those liabilities then the P+L doesn't really help, unless we can guarantee it will be at elevated levels for the duration of those contracts, or we make enough to transfer enough to reserves to cover those liabilities.

The bad case we need to consider is we don't go up this term or next term. We would then potentially have a huge wage bill and no parachute payments, meaning we'd have to use up the rest of what's on our balance sheet to pay it off, and/or arrange further financing, neither of which lead to rainbows and unicorns in terms of the financial stability of the club.

Conversely going up for just one season really helps *for that season* as you can assume you'll go straight back down and sign three year deals knowing you'll have cover from the parachute payments for years two and three of those deals.

Sadly we didn't really take advantage of that last year (let's not re-open that, though) and reportedly some of our players don't have relegation clauses which is also not entirely sparkly (again that's been done to death on here).

Posted By: Old Man, Sep 10, 08:56:29