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We drew against Chelsea… π
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Been trying, but so far, I’m failing to get my head around the understanding and logic of amortization. This is seemingly what is happening around with player transfers and why the fee is so big.
I thought at first the logic of a ‘buy now pay later’. To my mind it seems the club pays who’s bought the player overtime ends up paying the club bought from less over time as the player’s value depreciates. Still don’t get it.
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Nil, it is simply spreading the cost of transfer over term of contract and its how all clubs do their books. The only thing chelsea are doing unusual is agreeing longer contracts which allows the fee to be spread over a longer period.
Put it like this. Say you buy a player for 50m on a 5 year contract on a salary of 5m a year (approx 100k per week), then the total cost for transfer and of course wages per year would be 10m towards total transfer fee and 5m for one years wage. In total over 5 years it is 50m in transfer plus 25m wages which is 75m all in, but again its all spread evenly across the contract so on the books it will be 15m each year for 5 years. As traditional FFP only looks at 3 year period, no more than 45m of the total 75m will ever be counted at same time. But new FFP will also restrict clubs annual spend to 70% of annual revenue hence why chelsea have looked at the contract length.
Now what chelsea are doing using example above is offering longer contracts to further reduce yearly cost because over 8 years the transfer spend per year would be 6.25m instead of 10m so including wages the yearly cost totals 11.25m instead of 15m. However for this slight gain chelsea are now liable for 3 extra years of salary.
Although I think what has been overlooked is that the wages chelsea have given to the players on long contracts is much lower than standard for our first team players, eg mudryk on 97k per week relative to sterling on 300k.
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Yes banjo, you scraped a draw against the 10th best team in England π€£
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One way of looking at it, I like to think we went to the home of the reigning European Champions and taught them in their own backyard… π
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Interesting point Lucky re the reasonable level of the wages. It almost sounds too good to be true from Chelsea’s perspective. I have to wonder why someone like Mudryk would agree to “only” 100k a week considering how little that is likely to be worth (in football terms) in 3 years, never mind 7/8 years. I mean on the one hand, he’s secured his future with this deal but he’s also potentially cut himself short at the peak of his career by ensuring Chelsea could theoretically keep him on that wage past his 30th birthday.
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I think it would be attractive to players for a combination of guaranteed money for longer period and also I am sure triggers for wage increases such as qualifying for champs league, winning trophies, appearances and scoring goals etc..
The important thing is that if the wages do go up it is in line with our annual revenue
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Chelsea’s wage bill at start of next season will likely be considerably lower than it was at start of this season
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Another way of putting it Ed, is by signing the contract mudryk has guaranteed himself 40m whatever happens, could break both legs tomorrow, have mental breakdown or anything. Sure he would prefer 40m for 4 year deal but nobody was offering that.
I am sure there is plenty of scope for it to increase.
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Joking aside, I think Chelsea might struggle a bit to shift some of the high earners, the overall wage bill might go down… or it very much might not too! Interweb chatter about some of the players leaving and they’re all on the 200/300 range… might be hard to get some takers for that lot!
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Depends on the fee we demand too banjo. If there are some that want to stay and play for reserve team if course we have to take the L but doubt many of the higher earners will do that. Koulibaly may be a problem but if we can loan we can offset most of annual liability for example and at least cut losses.
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I understand what chelsea have done lucky. Itβs a loophole and FairPlay to them but it makes an absolute mockery of fffp that a team can go out and spend 600m or 500m net in one go. Why couldnβt Newcastle do that?
We have never seen ver seen spending like this. Fair enough the owner put up 1.7 billion for stadium and players. Great stuff but can any new owner do that now?
Do you think potter had much input to the players signed? Chelsea can now field 3 proper teams lol and look who they still to come back from loan. Itβs an absolutely outstanding squad of players and from next season should be challenging for everything.
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Hi Sean, I know 3 individuals that work for the club, this has come from them I’m just passing it on.
Whoever is making the final decision on transfers, for me it’s Levy,is leaking money , I watch the other PL clubs do business and have to ask WTF are Spurs doing, how many times are other top 6 clubs chasing a player we want, zero. How many more forwards do we need same answer zero, is Steve Bergwjin better than Danjuma , most definitely, is Bryan Gil better than Danjuma , yup.
As for having to having to cancel Doherty’s contract, that’s just embarrassing ,but not nearly as bad as the Bryan Gil fiasco ,Seville must be pissing themselves laughing, they have Β£22m in the bank, Lamela in the squad and now the have Gil on loan to them .
We have never replaced Erikssen, but we did spend Β£100m plus on Ndombele and Lo Celso who are also out on loan along with Regulon . ENIC out_____________________________
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Ye some very valid points shiney. Ye bizarre really when you explain it like that. Doherty is a much better player then Emerson aswell.
Sevilla stuff is crazy
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Sean, personally I believe FFP makes a mockery of itself and irrational regulations lead to irrational behaviour. Chelsea were following rules it’s a choice of your own whether you want to call it a loophole, I don’t.
And chelsea haven’t spent 500m in one go, the whole point of this is to fast track the investment due ahead of changes to FFP and this money is spread both in installments and in terms of FFP, we are doing 3 years business in 1 year but that won’t be the norm for us.
You cant compare Newcastle to Chelsea in terms if FFP, one team has an abundance of players to sell for decent money and plenty of money from champs league appearances and win, the other just has basic prem income to offset investment. You also have to allow for different owners have completely different strategies.
I think Potter has as much say on transfers for Chelsea as he did at Brighton, ie recruitment team identify the targets and I presume Potter has a veto.
This is an extremely intense but limited burst of investment, it will settle down and our squad will be much smaller come start of next season for sure.
Of course the target will be trophies but that was the whole point of the investment.
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“Fair enough the owner put up 1.7 billion for stadium and players. Great stuff but can any new owner do that now?”
If they can’t it’s not Chelsea doing and I am of course just counting my lucky stars.
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Neoploean, I can see a lot of clubs trying their luck… “Sure, we’ll talk xxx… but you’re paying 50% of his salery during his loan!” type of thing… think I mentioned it before, I think Beohly is thinking it’s going to be as easy as it is in the states to get rid of players… eitherway, there will be some bargins to be had from West London in the summer…
Waspy… Doherty was great last season until that Arsenal from Villa finished his season.. was never the same again this season… maybe a proper run in the team might have helped him.. but we’ll never know!!
As for the Spuds…. I think Levy is getting a more grief than he really deserves… did he actually choose Reggie, Lo Celso, N-Dumb et al? He got rogered for not giving Poch any money, who when he did get money, went out and bought some of the aforementioned players… Maureen, the “Great One” bought how many of these “crap” players? Did he really want Bissouma, Spence, Richy?? Or was it Paratici? Or was it Conte?
Not saying his 100% innocent either, but he certainly isn’t 100% guilty!
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Banjo, for sure mate it’s a buyers market as far as chelsea players are concerned in the summer, but it depends on how much interest each player has. We will see.
Will get back to you on this 1st September π
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I’d take Chillwell for sure… not really sure who else I’d have if I’m honest… maybe Mendy at a push (although it seems we’re all over the Napoli goalie, ready for the summer)… If Thaigo was younger I’d nab him… only watch you twice a season… and haven’t exactly seen any of the new 42 signings kick a ball yet… π
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