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Football Finances by Dummies. 10:20 - May 18 with 3128 viewsomarjack

Warning:This thread contains Mathematics.


Let me start with correcting a misconception that keeps circulating around this forum. That our wage bill for last year was 99 m. But many seem to disregard that our club release financial records for 14 MONTHS at a time. Unlike most other clubs that release it every 12 MONTHS.

Therefore,our wage bill is estimated to be about 85 m last year (including some serious f*ck ups like paying compensations for 2 managers and hiring a 3rd)



Now for the main point of the thread..Amortisation..Blimey but what's that?




I like to teach with examples. Not words..

It was reported that we paid 12 m to buy Bony back (some mugs we are)..and it's reported that he's earning a salary worth about 5 m/year (mugs again)..over 3 years.

Bony's salary over 3 years=15 m

add the fee to that we get 27 m total investment in him

27/3 (number of years of contract)=9 m (The recorded figure we've spent in bringing Bony in)

so it's not 12 m..it's 9 m.


About the same concept could be considered for sales as well.

Now many of you thought that Sigurosson was sold for about 40 m to Everton..True. But on the financial sheet it won't recorded in that way.

Then how do they record it?

Siggy had 2 years left on his contract with us before we sold him. he was reportedly on a 3.5 m/year. (we owed him 7 m in a way,but since we sold him we obviously don't owe him this figure anymore)

so..40 m + 7 m=47 m

47/2 (years of contract)=23.5 m (The actual amount of money we've earned from selling Gylfi)

so it's 23.5 m...not 40 m.


Last July we've sold: (I've already done serious calculations here which I will spare you the details of)

Siggy:23.5 m
Llorente:17 m

TOTAL:40.5 m

we bought since then the following mugs:

Bony:9 m (as I already explained)
Clucas:about 6.5 m
A.Ayew:10 m (he'll cost us 35 m over 3.5 years unless we sell him of course)
Renato Sanches:about 8 m over 1 year
King on loan:probably only half of his wages so about 1 m

TOTAL:34.5 m

net profit of sales this year so far: + 6 m


Now if we sell Mawson for 20 m (assuming his wages are 1/year with 2 years left in his contract) we'll raise about 11 m in his sale for example.

Letting Bony for free alone will save us 5 m in Amortisation.

selling Baston for 2 m will raise us about 2.5 m and so on and so on..

Ok..I'll stop blabbering for now.
[Post edited 18 May 2018 22:30]

Poll: England vs Croatia (who's going to win)

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Football Finances BY Dummies. on 21:20 - May 18 with 431 viewsomarjack

Football Finances BY Dummies. on 17:20 - May 18 by Shaky

Aw shucks, and here I was about to congratulate you on great art!

To you question, when you buy a player it has no impact on the profit and loss account.

The purchase price is recorded on the balance sheet as an asset of the club.

If the player contract is over 3 years, each year a third of the purchase price is then recorded as amortisation - a cost - on the profit and loss account, with the asset value on the balance sheet reduced accordingly

The salary is recorded separately as wages + national insurance etc.

At the end of the 3rd year the balance sheet value has then been reduced to nil with the entire initial purchase price written off as amortisation. Reflecting his value to the club, without a new contract in place.


It's been reported in the official report that:

Player registration IN: 23.9 m (I assume it's the sum of player amortisations of that year) (loss)
Player registration OUT:36.9 m (players leaving) (profit)

leaving us with about 13 m in surplus

our turnover was 127 m..

our expenses (without player registrations) was about 127 m as well.

The club made it's entire profit of sales (the 13 m of registration)

my question here is..those 23.9 m/36.9 m figures..what do they signify exactly?

and as an example..assuming we sold Siggy for 40 m..how much will it be recorded as player registration income?

Same question for us purchasing Bony,how will it be recorded? (assuming we paid 12 m for him on a 3 years contract)
[Post edited 18 May 2018 21:23]

Poll: England vs Croatia (who's going to win)

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Football Finances BY Dummies. on 21:24 - May 18 with 420 viewsomarjack

Football Finances BY Dummies. on 20:02 - May 18 by Ambergambler

You're a brave man, Omar.

With all the clever sods on this forum you were just asking to be shot down in flames!


I just did a "Resurrection" basically haha.

Poll: England vs Croatia (who's going to win)

1
Football Finances BY Dummies. on 22:23 - May 18 with 394 viewsAmbergambler

Football Finances BY Dummies. on 21:24 - May 18 by omarjack

I just did a "Resurrection" basically haha.


I wouldn't go that far!
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