You take their transfer costs and divide them by the years the contract run. That way you will get price paid for rights to player a year, plus it with yearly wages and you get the average yearly cost. It's not that simple in real life though.
Let's say we bought Vucinic for 5 million, and gave him a 5 year contract. The price we had to pay his former club would be 5 million, but for an asset in five years, which means a loss of 1 million a year. Why? Because when we buy him, we don't calculate that as a loss, since the amount we spend would decrease in our cash post but a similar amount would be added to the assets post. So when his contract runs for five years, we will decrease the value (if his value is 5 million for 5 years, it's 1 million a year) of this asset that is Vucinic' rights with 1 million every year and put that as an operation cost. Furthermore we have to pay his salary, so if he earns 1 million pr. year, we wouldn't lose any value in the company when buying him, but every season we would "loose" 2 million.
This under assumption that his value is constant in all those years. If a player turns out to grow a lot, his value will increase, which will mean we will revalue him as an asset in the books. This have happened to Pogba etc.
A problem we had before the scandal was, that the part of assets that were our squad was valued very high (maybe too high) which means we had major operational costs every year when their contract ran down - forcing us to renew a lot and stuff. But what the figure tries to show, i believe, is the average yearly cost for those players. Ziegler is there because we own him, and his value as an asset decreases each season, but we don't pay him wages, so that is not a part of our costs...
Hope it makes sense, it is a lot easier to explain in my own language than in english ;-)
Let's say we bought Vucinic for 5 million, and gave him a 5 year contract. The price we had to pay his former club would be 5 million, but for an asset in five years, which means a loss of 1 million a year. Why? Because when we buy him, we don't calculate that as a loss, since the amount we spend would decrease in our cash post but a similar amount would be added to the assets post. So when his contract runs for five years, we will decrease the value (if his value is 5 million for 5 years, it's 1 million a year) of this asset that is Vucinic' rights with 1 million every year and put that as an operation cost. Furthermore we have to pay his salary, so if he earns 1 million pr. year, we wouldn't lose any value in the company when buying him, but every season we would "loose" 2 million.
This under assumption that his value is constant in all those years. If a player turns out to grow a lot, his value will increase, which will mean we will revalue him as an asset in the books. This have happened to Pogba etc.
A problem we had before the scandal was, that the part of assets that were our squad was valued very high (maybe too high) which means we had major operational costs every year when their contract ran down - forcing us to renew a lot and stuff. But what the figure tries to show, i believe, is the average yearly cost for those players. Ziegler is there because we own him, and his value as an asset decreases each season, but we don't pay him wages, so that is not a part of our costs...
Hope it makes sense, it is a lot easier to explain in my own language than in english ;-)
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