Summer Mercato Thread 2018 (34 Viewers)
- Thread starter Mark
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yeah i totally get it, thats how we and media will always count, as this is roughly correct and clears confusions, thats the way we should do, im just saying that its much more complex. Also I noticed how 'a transfer budget of xxx Mil' has slowly disappeared, looks like less and less clubs discloses things like that and we really don't know about transfer budgets. I also wonder if, lets say, after we will pay all the loans for stadium etc. we will have more money for wages or we will just gonna try to generate income to make shareholders happy. I would like to see juve's account books hehe
these lists wouldn't help too much, because the clubs don't really mind yearly transfer window balances and "net spends". i'll try to explain why.
as you mentioned, clubs pay in installments. that's one thing, and that would affect clubs' liquidity. but liquidity is only one financial aspect of a company, and tbh, it's far from being the most important aspect.
the more important thing is the books. as most of tuz people are aware, transfer fees and costs are spread over the contract period. you buy sms for 100m on a 5-year contract, that's 20m yearly cost. and that's more important than paying the guy in 2 or 4 installments, because this amortization goes in the books as a cost, and this would affect your yearly balance.
i don't mind transfer fees at all recently. which is important is the yearly cost: the club has a yearly budget, with a yearly financial report, yearly profit, you get the idea. and yearly cost for a player consist of the amortized part of the transfer fee (basically transfer fee/contract length) plus gross wages (~net wages x 2). in case of a renewed contract, the remaining book value of a player will be spread over the new contract period, so a prolongation might have a positive effect on the profit, even with improved wages. and with all that in mind, it's easy to understand why we extended jorge martinez's contract once it was about to expire and the club never expected to have the player in the squad.
also, ffp wouldn't care about yearly transfer balances either. ffp monitors 3-year cycles. those transfer window balances would only make sense for fans and journalists.
as you mentioned, clubs pay in installments. that's one thing, and that would affect clubs' liquidity. but liquidity is only one financial aspect of a company, and tbh, it's far from being the most important aspect.
the more important thing is the books. as most of tuz people are aware, transfer fees and costs are spread over the contract period. you buy sms for 100m on a 5-year contract, that's 20m yearly cost. and that's more important than paying the guy in 2 or 4 installments, because this amortization goes in the books as a cost, and this would affect your yearly balance.
i don't mind transfer fees at all recently. which is important is the yearly cost: the club has a yearly budget, with a yearly financial report, yearly profit, you get the idea. and yearly cost for a player consist of the amortized part of the transfer fee (basically transfer fee/contract length) plus gross wages (~net wages x 2). in case of a renewed contract, the remaining book value of a player will be spread over the new contract period, so a prolongation might have a positive effect on the profit, even with improved wages. and with all that in mind, it's easy to understand why we extended jorge martinez's contract once it was about to expire and the club never expected to have the player in the squad.
also, ffp wouldn't care about yearly transfer balances either. ffp monitors 3-year cycles. those transfer window balances would only make sense for fans and journalists.
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