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So you’ve bought him for 50, sold him for 40, only pay 30, and make 20, and don’t loss 10??
Abu Dhabi School of Financing this is… 🙂
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Well the silver lining in hope is that we hope we’ve dodged a bullet and saved this vast amount of money. We ARE in Europe and so rules do apply to us.
The intriguing thing coming out of this was that we nearly hit the British Transfer record. However something also tells me that we may have dodged a bullet. No good at all signing a player that hasn’t the heart to play in a Red Shirt.
FSG showed willingness to stump up. The problems lie elsewhere with our Recruitment Team, being able to broaden our horizons and take a punt on players from Europe.
We can still sign 2/3 players that don’t necessarily need to be integrated all at once. As long as we don’t repeat this ever again when it comes to the Transfer Market and use this as learning.
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Chucky that’s good business sense mate 🙂
Lol, this sort of reminds me of the PCP scheme on Cars 😀
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No I know that Ed but Lavia wanted to come last week when we were bidding. It’s all our fault. I know Chelsea were looking at him but Chelsea only bid for the first time last Wednesday. We had our first bid turned down 3 weeks ago
Nothing againest Chelsea at all in this. We are entirely to blame. We let two no 6 players go who are highly experienced without replacing them first
This is the bullshit we used to do. Hey do many things wrong and it’s creeping back in now
Also, on the pitch, we cannot defend as a unit. It’s going on a year now and tactically it’s an absolute mess. Absolutely adore Klopp but he’s making many mistakes. I can’t see us turning back into the pressing monsters we were. It’s slowly coming apart on and off the pitch and I think Klopp be gone by end of the season.
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Three p’s, I think Chucks was alluding to getting a good resale value on a player where the fee exceeds what is left to pay back (during that period of time((I might have misunderstood)).
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No banjo, you bought him for 50m, sell him for 40m, and so overall have net loss of 10m.
However in terms of accounting for all this yearly for FFP, outgoings of 10m have been recorded on the accounts for the previous 3 years. Its already accounted for.
At the time of sale, there is still 20m outstanding over the next 2 years. The 40m received cancels this out and creates a surplus of 20m.
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Chucky I k ow you were, I think its chucky and nil that are struggling to under the difference.
For chucky. If you buy a player for 50m and you have 1×30 instalments and 2x10m agreed over 3 years with the seller. You sell after 1 year for 40m even though you have only paid 30m you still meed to pay the original seller the remaining 20m.
It’s like selling a car you have a loan on before the loan is paid off. Non ownership does not invalidate the loan repayments.
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If we’re going back to 2016 and Heavy Metal, I do miss Lovren and Coutinho lol 😀
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Putting my accountant’s hat on…
Buy a player for £100m on a five year contract.
Each year £20m amortised to Profit and loss account.
Sell the player in year 4 for £30m
So: Cost £100 less 3 years write down (nothing in the year of sale)…therefore written down value £40m
Compare with sale proceeds £30m so a loss on disposal in the accounts of £10m as an expense.If the player had an 8 year contract the annual charge would be 12.5m thus showing more profit because less cost.
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Good explanation lads so we’re does the risk come in? Sounds like a great way so why have Chelsea being the first club to do this?
People can question boeholy football knowledge but he’s no fool being a billionaire
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Sean, all our sales this year just cancel out this year’s amortised outgoings regards the overall investment. Next year we will have another full year’s worth to cover. If our recruitment hasn’t been good enough to continue to get high returns in transfer sales each year we not only won’t be able to sign anyone, but we will have to sell some of our best players.
We will likely have to raise 150m in the market every summer to maintain the ability to bring players in.
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Cheers lucky.
Funny thing is chelsea have brought 27 players in but squad still looks a bit bare even with Caciedo and Lavia mate?
You still need more players maybe a centre forward and wide player?
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In an ideal world yes there one or two more needed and nkunku is a loss with injury.
However, you will not see me asking for it 😆 Spoiled sod I am.
I think we have enough to compete for top 4 now no doubt and that’s more than I genuinely have a right to demand as a fan of Chelsea.
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This was the spirit of the club in the 90s when I was a kid, pushed itself financially to brink of destruction because it wouldn’t settle for being an also ran. Met its luck halfway, but got lucky nonetheless.
I don’t think Todd is banking on luck, but I am eternally aware our luck will dry up sooner or later.
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Also, Maguire on an 8 year deal at £200k a week means we’d be paying him a bigger lump sum to leave.
You need to be careful what players you offer long contracts to, but a PL proven player who is 21/22 is perfect.
Also, City did something similar. What they did is offer a contract extension after a couple of years. That allows them to amortise the players fee over a longer period too. You might remember a load of City players signing an extension a couple of years after joining.
You need the correct player profile for it to work.
However, it only explains some of the accounting practice. Cash is king and that is what the club lacks, so must be coming from somewhere.
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Yes Alfie, the cash flow has certainly been subsidised massively, however owner injections won’t count as positives on the balance sheet for accounting purposes and the expenditure will need to be accounted for against incomings.
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I’m with Alfie on the player profile point. What he may or may not bring on the pitch will generate from shirt sales and other marketing ventures. Value for the club.
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The process is sometimes called funding.
In lay terms you are pushing the potential hit into the future with current data looking OK.
Usually a disaster. But not necessarily provided the business is successful. In theory any proper FFP should outlaw long period write offs.
Let’s see if FIFA/UEFA clamp down_____________________________
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Three Ps @7:20 advantage naturally is having that luxury of time and of course the player. Selling Club of course benefits with the player off the wage bill, though is in waiting of income unless negotiated that lets say from a 50 mil fee, 20 mil at least is paid within 2 years of a 5 year arrangement.
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