Scouse
Player Valuation: £2.5m
'To be fair' three times in one sentence?
Have you said that sentence out loud to yourself?
Follow along with the video below to see how to install our site as a web app on your home screen.
Note: This feature may not be available in some browsers.
John Stones
- Thread starter GrandOldTeam
- Start date
- Status
Have you said that sentence out loud to yourself?
Zezti
Player Valuation: £70m
I think under Koeman's guidance he could be like a new signing. I think, we keep him, see out his contract and hopefully by the time it expires;
A) We'd be a more attractive place for top footballers (regular Europa/Champs league)
B) He'd've improved his game and stopped giving fans with dodgy hearts some serious problems
C) We'd've won stuff with him
Unless we're pulling someone like Müller or similar caliber and need to sell for FFP reasons, then I'd keep him.
A) We'd be a more attractive place for top footballers (regular Europa/Champs league)
B) He'd've improved his game and stopped giving fans with dodgy hearts some serious problems
C) We'd've won stuff with him
Unless we're pulling someone like Müller or similar caliber and need to sell for FFP reasons, then I'd keep him.
kithnou
Player Valuation: £70m
Have a read of this article on the Home page from @The Esk mate. It will explain the thinking behind the selling of John Stones.
https://www.grandoldteam.com/2016/0...ransfers-short-term-cost-control-regulations/
Zaschrona
Player Valuation: £10m
Would be bigger profit then that. FFP works with a thing called amortisation of transfers. Lukaku signed for us for £28m and signed for 5 years. 2 years gone from that contract. 28/5*3 = £16.8m - that is his current cost remaining in our accounts. So if we sell Rom now for £40m, the profit for 16/17 accounts from his sale would be around £23.2m.
Stones for example signed with us in Jan 2013 for 5.5 years for £3m. He then signed a new contract for 1 year longer in Aug 2014. In other words his current cost in our bookings is currently 3/(5.5+1)*3.5 = approx. £1.6m total cost remaining in our accounts. And so if we sell now John for £40m, the profit for 16/17 accounts from his sale from his sale would be around £38.4m.
If we would sell Niasse now for 3.5m, we would get £8.5m loss in our accounts. If we loan out him for two straight seasons and then sell him for £3.5m, we would then record only £2.5m loss. In 16/17 accounts only £3m amortisation of his buying prices instead a bigger loss if we would sell him right now.
It is fun.
....last season illustrated that it's not worth keeping him when his heart is set on leaving.
Would be bigger profit then that. FFP works with a thing called amortisation of transfers. Lukaku signed for us for £28m and signed for 5 years. 2 years gone from that contract. 28/5*3 = £16.8m - that is his current cost remaining in our accounts. So if we sell Rom now for £40m, the profit for 16/17 accounts from his sale would be around £23.2m.
Stones for example signed with us in Jan 2013 for 5.5 years for £3m. He then signed a new contract for 1 year longer in Aug 2014. In other words his current cost in our bookings is currently 3/(5.5+1)*3.5 = approx. £1.6m total cost remaining in our accounts. And so if we sell now John for £40m, the profit for 16/17 accounts from his sale from his sale would be around £38.4m.
If we would sell Niasse now for 3.5m, we would get £8.5m loss in our accounts. If we loan out him for two straight seasons and then sell him for £3.5m, we would then record only £2.5m loss. In 16/17 accounts only £3m amortisation of his buying prices instead a bigger loss if we would sell him right now.
It is fun.
Transfer Accounting
With David Luiz moving to PSG, many have asked how PSG can afford the reported €40-50m fee with their FFP spending restrictions. As such, the basis of this blog is to shed light on how clubs account for the sale and purchase of players and why it is important for FFP compliance.
How Purchasing Clubs Account for their Spending
In sexy accounting speak “when a player is purchased, his cost is capitalised on the balance sheet and is written-down (amortised) over the length of his contract.” In laymen’s terms, transfer fees for accounting purposes are spread over the length of a players’ contract. If we take PSG’s purchase of Luiz as a recent example, €50m over a five year contract is amortised by a club in its accounts to the value of €10m per season.
Although PSG have agreed to spending restrictions due their FFP settlement agreement with UEFA, they are permitted to invest in their squad under the terms of the agreement. Of more concern to PSG will be their 14-15 wage freeze restriction. If Luiz is on large wages, they will need to reduce their wage bill. Reduction will be possible with out of contract or contracted players leaving the club.
A transfer occurring in the 2013-14 season (depending on PSG’s accounting year end) will have an impact on a club trying to break-even in subsequent seasons. As noted above, PSG will amortise Luiz’s transfer fee over the length of his contract. If we assume a 5 year contract, PSG will have four further €10m amortisation charges in their 14-15, 15-16, 16-17 and 17-18 accounts. All of those amortization costs will have FFP significance.
How Selling Clubs Account for their Income
The other important amortisation issue is the accounting procedure when a player is sold. On this topic I defer to the Swiss Ramble who uses the ex-Manchester City player Robinho as an example:
“[H]e was bought for £32.5 million in September 2008 on a four-year contract, so annual amortisation was £8.1 million. He was sold after two years, so cumulative amortisation was £16.2 million, leaving a value of £16.3m in the books. Sale price to Milan is reported as £18 million, so City will report a profit on sale of £1.7 million in the 2010/11 accounts. Therefore, City will show an annual profit improvement of £18.1 million after this deal: £8.3 million lower wages + £8.1 million lower amortisation + £1.7 million profit on sale.”
This demonstrates how clubs write-off the transfer value of a player over the life-time of their contract and also illuminates that because Robinho was worth £16.3m two years into his four year deal, Manchester City actually made an accounting profit on his transfer of £1.7m. Fans would see the sale of a player for £18m bought two years previously for £32.5m as bad business. The club in their accounts will class it as a £18.1m profit improvement.
Luiz Profit for Chelsea
In taking the Luiz transfer to PSG, I am grateful to Jake Cohen for doing the hard calculation yards in his blog post, which I use as the basis for the Luiz transfer profit for Chelsea. Chelsea originally purchased Luiz from Benfica in the January 2011 transfer window for a reported £21.4m (plus Nemanja Matic, valued at a £5m). Luiz’s transfer fee was amortised to around £4.8m annually (£26.4m over 5.5 years).
Luiz then signed a new five-year contract in September 2012. The remaining book value of the transfer fee at the time of the new five-year deal was £19.2m as 1.5 years of the original transfer fee (£7.2m) had been amortised. This meant a re-amortised annual figure of £3.84m.
As Luiz had three years remaining on his contract, the remaining ‘unamortised’ value was around £11.5m. Depending on the exact figures that PSG have paid for Luiz, an initial conservative £40m fee minus the remaining £11.5m gives Chelsea total accounting profit on the Luiz sale of £28.5m. Therefore, Chelsea may show an annual profit improvement of £36.1m after this deal: £3.8m lower wages[1] + £3.8m lower amortisation costs + £28.5m million profit on sale.
Such profit will no doubt put Chelsea in a stronger position to comply with FFP in the coming seasons.
[1] Assuming £80k a week equalling around £3.8m
http://www.danielgeey.com/football-amortisation-chelseas-50m-luiz-profit/
Good little read there.
https://tomkinstimes.com/2014/07/ffp-and-the-amortisation-of-suarez/
And there, I wont link that, cos its quite long, but an interesting read.
And there, I wont link that, cos its quite long, but an interesting read.
Because it hasn't increased our revenue or shown profit.
@scratchnsurf has described it brilliantly, and @The Esk wrote a great article about it.
bluestevon
Player Valuation: £80m
In a nutshell mate you have explained well the entire Chelsea model on navigating FFP rules - when the rules where stricter it was frankly a brilliant way to get around it.
Buy a young player for decent money that you have no real interest in for your club, loan them out for most of their contract - say 3 of 5 years, watch the value of them go significantly down due to amortirisation, if they fail on loan then you can sell them for a significant 'loss' whilst still making a FPP profit, if they succeed on loan like De Bruyne, Lukaku etc then you will sell them for an absolutely massive FPP profit allowing you to go out and spunk 50m on a torres etc
deipnosophist
Player Valuation: £80m
to be fair once,twice...three times a sentence..
BiggyRat
Player Valuation: £35m
Unless he does a Rodwell...
he won't. he's a lot better than Rodwell ever was
That or £20m and a swap dealing including David Silva.
- Status