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[Albion] Panic Ye Not on the finances.









Eeyore

Colonel Hee-Haw of Queen's Park
NSC Patron
Apr 5, 2014
25,570
It's *almost* like they know what they are doing and are better placed to deal with/worry about the accounts than, I don't know, 'JeffTheSeegul1965' from Pulbrough...
Jeff is an authority on the political state of affairs in this country as well as the menace of cyclists and 20mph speed limits though. You can't deny that.
 










Baldseagull

Well-known member
Jan 26, 2012
11,838
Crawley
Good question. And also brings the query - do you have to amortise, or can you place the entire cost in one year if you have big sales to offset it? I understand that the assets are on the books so need to be accounted for, but that can hurt you in terms of PSR accounting
I would guess that it is the correct way to do the accounting, it's similar to having a depreciating asset. We hope to have bought appreciating assets, but every player could stay till their contract runs out if they wanted to.
 


Bozza

You can change this
Helpful Moderator
Jul 4, 2003
56,735
Back in Sussex
Can someone please explain the ‘book value’ bit? Thank you 🤦🏻‍♂️

EDIT: Oh, I get it, sale price minus original purchase price?
If you buy a player for £20m and give them a 4-year contract, then that £20m is amortised over the course of those four years in a straight-line fashion, ie £5m per year.

So, after the player has been at the club for one year, then his book value will be £15m - £20m-£5m.

When you sell a player, the impact on PSR/FFP will take account any remaining book value.

So if that theoretical £20m player has had a blinding year and Chelsea buy him for £50m, then the PSR impact would be £50m-£15m=£35m.

Players that have come through the youth system, as opposed to being bought, have no book value, hence 100% of the sale proceeds count for PSR purposes. That is why Chelsea were keen to ship out Conor Gallagher as the entire sale proceeds - supposedly £34m - get put in the PSR plus column.

Even though Joao Felix, moving in the other direction, supposedly cost more. the deal will only have a minimal impact on this year's PSR as the transfer fee will be spread over the maximum permissible five years.
 








Motogull

Todd Warrior
Sep 16, 2005
10,297
But but but this looks like financial doping. Agan.

:tantrum:

Its not fair. We should have the book thrown at us.

Why not be fair and show the non financial doping ethically accurate figures for Palace?

Them plonkers will never get it will they?
 




ChickenBaltiPie

Well-known member
Jan 3, 2014
935
No. Sale price less unamortised cost
Thank you 👍🏻
I think it's sale price minus what value they had left after amortisation.
Thank you 👍🏻
If you buy a player for £20m and give them a 4-year contract, then that £20m is amortised over the course of those four years in a straight-line fashion, ie £5m per year.

So, after the player has been at the club for one year, then his book value will be £15m - £20m-£5m.

When you sell a player, the impact on PSR/FFP will take account any remaining book value.

So if that theoretical £20m player has had a blinding year and Chelsea buy him for £50m, then the PSR impact would be £50m-£15m=£35m.

Players that have come through the youth system, as opposed to being bought, have no book value, hence 100% of the sale proceeds count for PSR purposes. That is why Chelsea were keen to ship out Conor Gallagher as the entire sale proceeds - supposedly £34m - get put in the PSR plus column.

Even though Joao Felix, moving in the other direction, supposedly cost more. the deal will only have a minimal impact on this year's PSR as the transfer fee will be spread over the maximum permissible five years.
Thank you 😘
 


Uh_huh_him

Well-known member
Sep 28, 2011
11,777
Purchases this summer £145m
Average contract length 4.5 years
Annual amortisation expense £32m

Player sale profits
Undav £22m (25-3 book value)
Gross £7.5m (8-0.5 book value)
Leonard £0.5m
Total £30m

Net transfer cost this season £2m

#TrustInTony
How does the new PSR rules affect us?

I think Revenue last season was around £200m which under the new rules, would have given us £170m to spend on wages/fees/amortisation.
Last season we spent £128m on wages and £32m on amortisation.

On the face of things an extra £32m on Amortisation would push us pretty close to the limit, wouldn't it?
 


warmleyseagull

Well-known member
Apr 17, 2011
4,357
Beaminster, Dorset
How does the new PSR rules affect us?

I think Revenue last season was around £200m which under the new rules, would have given us £170m to spend on wages/fees/amortisation.
Last season we spent £128m on wages and £32m on amortisation.

On the face of things an extra £32m on Amortisation would push us pretty close to the limit, wouldn't it?
No, for 2 reasons: 1) clubs can make losses of up to £105m over a 3 year period; 2) we sold Caicedo and Sanchez for £135m in August 2023 so were not included in the £120m profit for last year ending 30 June 2023. The profit on them is virtually the same amount as there would be little unamortised cost from Caicedo (cost little and 2/3 through his contract) and nothing for Sanchez.

The £145m quoted by OP would therefore be almost covered by these two transactions even if the costs of the incoming players were immediate written off.

One factor that receives less attention in these discussions is cost of agents. The club pays players agents’ fees, typically I believe 10-20%. I guess that these are also amortised over the contract period as a cost of acquisition. Interested whether EP or anyone can confirm
 




Gabbiano

Well-known member
Dec 18, 2017
1,675
Spank the Manc
Purchases this summer £145m
Average contract length 4.5 years
Annual amortisation expense £32m

Player sale profits
Undav £22m (25-3 book value)
Gross £7.5m (8-0.5 book value)
Leonard £0.5m
Total £30m

Net transfer cost this season £2m

#TrustInTony
What's the amortisation cost this year from previous seasons' signings? Surely that needs to be considered for the PSR numbers?
 


Uh_huh_him

Well-known member
Sep 28, 2011
11,777
No, for 2 reasons: 1) clubs can make losses of up to £105m over a 3 year period; 2) we sold Caicedo and Sanchez for £135m in August 2023 so were not included in the £120m profit for last year ending 30 June 2023. The profit on them is virtually the same amount as there would be little unamortised cost from Caicedo (cost little and 2/3 through his contract) and nothing for Sanchez.

The £145m quoted by OP would therefore be almost covered by these two transactions even if the costs of the incoming players were immediate written off.

One factor that receives less attention in these discussions is cost of agents. The club pays players agents’ fees, typically I believe 10-20%. I guess that these are also amortised over the contract period as a cost of acquisition. Interested whether EP or anyone can confirm
Not next season they don't.

My question is about what this season's increase in amortisation will have against next season's rules (85% of annual revenue).
 


El Presidente

The ONLY Gay in Brighton
Helpful Moderator
Jul 5, 2003
39,922
Pattknull med Haksprut
The chances are that we
How does the new PSR rules affect us?

I think Revenue last season was around £200m which under the new rules, would have given us £170m to spend on wages/fees/amortisation.
Last season we spent £128m on wages and £32m on amortisation.

On the face of things an extra £32m on Amortisation would push us pretty close to the limit, wouldn't it?
Not quite, as player sale profits are subtracted from amortisation and wages are those of players and coaches only.

For reasons best known to itself, the assessment is on a calendar year basis too.
 






Uh_huh_him

Well-known member
Sep 28, 2011
11,777
The chances are that we

Not quite, as player sale profits are subtracted from amortisation and wages are those of players and coaches only.

For reasons best known to itself, the assessment is on a calendar year basis too.

Weird.

How will that work?
Will the first review be on the period Jan-Dec 2024? or 2025?
 


Uh_huh_him

Well-known member
Sep 28, 2011
11,777
The chances are that we

Not quite, as player sale profits are subtracted from amortisation and wages are those of players and coaches only.

For reasons best known to itself, the assessment is on a calendar year basis too.
So in effect our spending allowance os 85% of Revenue + Player profit in the past 12 months.
But you have to use that profit in the next window.
 


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