As an accountant there are so many half-understood misinterpretations in here both in terms of accounting for transfers and PL STCC rules (FFP only applies in Europe) but here goes:
STCC is a P&L control: revenue - operating costs (there are some exclusions for aspects of eg academy, charitable expenses etc.). It is NOT a balance sheet or cash flow control. It is generally measured on a 3 year rolling basis but 2019/20 and 2020/21 are being combined as a single period due to Covid and some Covid related losses (lost tv income, matchday revenues...) can also be ring-fenced.
EFC are still likely to be outside the accumulated allowed losses under the relaxed STCC based on estimated 2020/21 losses, even after capitalising past expenditure on BMD. We might be saved if PL provides further Covid relief or we might just take a chance on only getting a slap on the wrist punishments & move on.
Transfer fees paid are amortised in the P&L as an expense over the length of the contract on a straight line basis ie flat annual charges. The actual payment schedule is irrelevant except for cash flow, which is not our big issue given Moshiri. The fee is usually calculated including add-ons deemed likely to be paid but excludes any deemed unlikely (which will be recognised if and when they crystallise).
Wages, bonuses etc. hit the P&L accrued in line with the contract specifications.
Only the profit or loss on players sold (fees received - amortised book value & expenses of sale) hits the P&L and impacts on STCC. The timing/schedule of guaranteed fees received (staggered just like fees paid!) is relevant only for cash flow not STCC. Future add-ons are usually recognised only when received (assets are treated more conservatively than liabilities).
Any interest/finance charges associated with debt to raise the working capital for transfers or to cover operating costs also hits the P&L for STCC.
So, it is true that big transfer fees do not hit the P&L in one go but the combined amortisation & wages hit from big inbound deals is still substantial.
We are probably not making any significant offsetting profits on player sales unless we sell a few zero/low book value players like James, Bernard, Kenny, Delph, Davies...and, worryingly, DCL. Selling players like eg Keane or Mina is unlikely to generate significant profit v their amortised book value in the current weak global transfer market. They might generate funds but they do not help for STCC.
Apologies for out-Zataring Zatara!!!
STCC rules were abolished in 2019 and the FFP rules dont seem to follow traditional accounting principles.
For instance, a fee received is counted as fully received (even with a payment spread over many years) which then also reflects on the clubs ability to spend.
Unless ive misunderstood the explanation youve given
And the difficulty is obviously going to be which players can we sell. I struggle to see Keane going but Mina and James could be quite marketable.
It's also worth saying, 20m for Mina will probably be a pretty nice profit. I believe we signed for 28, but he's 3/5ths into a contract, so again that would show up a a 12m profit. That could allow you to buy the equivalent of a 50m player if you can spread the fees across 4 years.
Pretty much though if Keane was signed for £25mil. Then last summer would have been £10mil on the books -- his extension factored in hes probably £8mil on the books now.
So if we got £20mil for him were also £12mil up.
Mina possibly another £20mil giving us around £15mil....then if James goes its about £23.5mil in book profit.
Mina and Keane are players we paid too much for...if we had signed players who were young and whose values increased then wed be able to do alot of damage from selling them.
Why wouldn't Keane go. Generally speaking Everton's defence did well last year. It was up front and midfield where we were let down. Both Keane and Mina will have many suitors, the former in the Premier league and the latter around Europe too. Many were surprised when Keane didn't make the England quad of 33 and he's still only 28. Mina is just 26. Two good CBs in their prime.
I would love us to get Ben White for £50m because I think he's a terrific CB and would make a great partnership with Godfrey for both England and Everton, and price wise £50m is not his ceiling. But if we don't get him I'm happy with the central defenders we have. That position is not our problem.
Who do you think would come in for Keane and at what kind of fee (bearing in mind he must be on good wages) ?
Im not sure many were surprised he wasnt in the England squad ?
Snag with Mina is the 2 year contract...also his injuries....if he wasnt getting injuries we should extend...but what do you do?
Centre back is a massive weakness...we cant play anything other than very deep.
Fair points mate.
I'm not sure there is a huge market for Keane. I think Mina is our best defender (we were very good when he played, like CL level good so I've like to see us keep him). As for Keane, I just think Benitez might like him.
What do you say White's ceiling at mate? Do you think he is Maguire level in potential? He's versatile, and comfortable on the ball. I'm not sure he's elite, but I haven't that much of him.
Why would Benitez like Keane? His players in defence seemed to have heart...
I saw on rabonatv / tifo football they compared him to Maguire...key difference of course being their respective athleticsm.
He's a very well connected journalist mate, I don't think he just guesses.
I said a while back, both Benitez and Usmanov impressed each other. I wonder what would they would have been discussing? Benitez a manager who has basically kicked off at lack of funds to compete at the top at every club. I wonder what guarantees he would would to sacrifice the negative fall out?
I know some think they are going to employ Benitez to just get him to do what he did at Newcastle. I can only say, they are really really stupid if that's the plan, as he will kick off, and will bring the club into disrepute.If I was recommending them, I would say he is about the last manager I'd employ if I was going to give him no money.
Benitez has always been a chequebook manager imo in terms of his demands.
