Anyone else sick of the UKs football governing bodies? Derby County are being given a points deduction for breaking financial fair play rules. Just weeks after Man city spending £100,000,000 on Grealish. Or Manchester United spending over £130,000,000 as did Arsenal. Chelsea spent £96,000,000 on Lukaku. Yes these clubs made money as well but this happens every season. Ps not long until we join them in spending **** loads.
Not quite the one horse race of the German and Italian leagues, but the Prem is rapidly turning into an old boys club. Ie City, Chelsea, Man U and Liverpool spending huge and way above everyone else, then Spurs, Arsenal and Everton below them but nowhere near the title, then the likes of Leeds and Villa getting complements for their attacking play but only ever getting to around 10th, then dross like us, Soton and Burnley teetering around the drop zone, and finally ****e like Norwich and Watford yo-yoing.
What really pisses me off about the points deduction is it isn't helping the clubs they are enforced against when they are already struggling. So now Derby have to gain an extra 9 points on teams despite not being able to sign anyone or improve their squad. It's not the clubs fault, the players fault, the managers fault, the fans fault - who will all suffer for it - it's the people who got them in this mess to begin with and they are long gone now having sold a shell of a club on and run away. FFP should be an open forum made publicly available for everyone - financial experts, lawyers, media and fans to see and cast an eye over and question whos getting what from where. After our name check this morning in regards to erroneous payments made to agents/third parties - I'd love to see the full accounts of the club and see where the money is going exactly and who's getting paid what - especially the Joelinton transfer - we paid £40m (FORTY ****ing million) for essentially a lame donkey and I'd like to see how much agent fees were paid and to who.
FFP is and always has been a joke. Its a mechanism for the top clubs to keep the lower clubs where they are. Nothing more and nothing less. The worst part of it for me is when teams like Chelsea sign up all the worlds young talents. The cost goes on the balance sheet (asset). Then they loan them out for loan fees. An income to the profit and loss. Then the expense of the wages is mitigated by the loaning club who want the player. What this means is Chelsea have a pure income line hit to the p & l, hardly any cost and it props up the accounts for FFP. The final win for them is that if these kids don't make the first team they get sold and usually for a lot more than they bought them. Do this with say 40+ young players each season and its an income well over 100m. RINSE AND REPEAT. It drives up player values. It means that clubs dont get the young kids. It impacts on competition.
Should be a ban on the sale of any under 18 within professional football. Won’t stop clubs buying load of 18 year olds admittedly but would stop the bigger clubs poaching 15/16/17 year olds from lower clubs where they may get into first team and be sold for £5m compared to getting 100k to then sit in the reserves for 5 years before being released for nothing. You also have to question these players and their agents. Why would you as an 18 year old who is breaking into first team want to move to chelsea to then be loaned out for 5 years before being sold? Wonder if clubs should have a budget set on them by the prem. every club can spend 100m each year with £50m carried over if unspent. That money can come from the club or the owner if they want to, but you can’t spend over that amount or else it’s a fine and points deduction. If lower a rich owner wants to then invest huge amounts into a lower club then they can do it relatively sensibly by spend £100m a season on players without being punished, but at the same time don’t get some state owned club coming in and spend £300m a year to completely inflate the market.
Players have to be depreciated over the length of their contract which is a cost on the P/L I suspect Mike fiddles around with these numbers to lower profit numbers increases losses etc. He would have been quite justified though depreciating Joelinton from 40million to about 2million in Year 1, in fact if the accountants watched football they could probably argue he should have been depreciated more. The reason Chelsea do what they do is to snaffle as much of the young talent as they can, let other clubs develop it and then have first rights on any players if they do come good, or sell off the rest. The young players initial contracts are generally not that high anyway - it just requires a good scouting team to catch them early enough.
I knew someone would spring the depreciation part but I deliberately left that out. You see I stated that that the clubs buy the players and sell them for MORE than they where bought for. Meaning the depreciation (amortisation to be precise) is redundant.
As for Joelinton they have to be amortised over the length of their contract. So the hit each year is minimal in comparison to the cost. Also the talent the clubs like Chelsea are hoovering up are not 10 or 20 million pound talents but kids under 18 but who are clearly going to make it at the highest level. So the amount they pay for them is peanuts.
I mean have a look at this. https://www.transfermarkt.co.uk/che...631/plus/?saison_id=2019&pos=&detailpos=&w_s= All them loan players returning. That was 19-20. 20-21 https://www.transfermarkt.co.uk/che...631/plus/?saison_id=2020&pos=&detailpos=&w_s= It’s wrong!
Ah, the old "amoritisation ploy". Just knew the Manc would fall for that one. please log in to view this image
Part of the solution is to ban all loand deals in or out by PL teams. That would mean there would be no gain in hoovering up all the promising kids as you would have to pay them and play them.
To be honest I dont know how the depreciation works. What final value do they set? However it will have an impact as they are obliged to depreciate until they sell. They will then recognise a profit which is the difference between the sales price and remaining value on the books. If the payment of the sales price is spread over several years they can choose to partially recognise it over each of these years. In terms of PL you will end up with a loss from depreciation in the years when they are out on loan, which might be partly offset by a loan fee or a reduction in salary, followed by profit in the year that they are sold or the years after. It actually seems like a great business model if you can afford to do it. If the PL wanted to stop it they could just limit the number of players a team can send out on loan, or limit loan time to no more than a set percentage of a players contract.
Fikayo Tomori Sold for 27m. How many games did he play for Chelsea. 17. He signed for them at 8. No fee. https://en.m.wikipedia.org/wiki/Fikayo_Tomori
Mario Passaic (who you might say) bought for 2.25m in 2014. Sold for 13m. Games played for Chelsea = 0 https://en.m.wikipedia.org/wiki/Mario_Pašalić
Players are written down to £0 across the duration of their contract, unless they extend mid point and it can extended. The profit on sale is taken in the year the player is sold as far as I’m aware, irrespective of the payment schedule.
This is correct unless your Derby county ironically. That’s how they got busted and the reason for this thread in the first place. The only time a revaluation is made is when a player signs a new contract extension.
Even contingent profits are taken at the time of sale depending on the contingent criteria. For example if there is a sale clause that is triggered if a player reached a milestone. That’s recognised at the point of sale. Because it’s expected to happen. It’s written off at the point of it not being probable.
I thought the add ons were included in the balance sheet value of the player by the buying club, but we’re only taken as profit by the selling club when they were triggered tbh.
Mate to be honest most folk on here don't know **** all about jack ****, they still have strong opinions on it all which are subject to change whichever way the wind blows. I wouldn't worry about it, pontificate away