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City spend just £8.7m on 6 players this summers
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Re: City spend just £8.7m on 6 players this summers
When a player is sold, then there is a book profit or loss on the sale. Basically, there's nothing left to amortise afterwards since the asset has gone. You can't amortise something you don't own!
When Mario left, for instance, there would have been a book profit on him (the sale price less the unamortised amount on the balance sheet). Same with any other player. The amortisation stops the day the payer is sold.
When a player signs a new contract, the unamortised amount left on the balance sheet is then spread over the remaining years of his new contract.
For example, Dzeko costs £25M and has a 5 yr contract. It's amortised at £5M per year. After 3 years, his 'book value' is £10M (£25M - 3x£5M). He signs a new 5 year contract so his book value is amortised over 5 years again meaning only £2M (rather than £5M) hits the p&l every year. Multiply that by 7 or 8 players, and we probably saved £30M+ from hitting the p&l by doing that.
I think this is one of the reasons you saw many long term contracts being signed for older players. Short term gain when we had issues with FFP but longer term pain as we'd have difficulty getting shot of players on fat contracts. But by then FFP would have been overcome, so we accepted this hit.
Negredo. If I'm right here, he was sold last season. It was called a loan, but there was the guarantee that Valencia would buy him at the end of the season.
We had a spending limit imposed upon us by UEFA last summer. From what I read last summer, we had to speak with UEFA before we bought Mangala as, without including the full Negredo income, we probably would have overspent. We can't include the Negredo income this year if we already included it last year.
Want more? The new tv deals hadn't started by this summer. The new SKY deal starts next year so we really can't include that in this year's accounts. The new BTCL deal only starts now so will have some impact on this year's accounts, but not the full impact of all the extra money from the deal as some of it will only be decided next year (2016) when the competition is finished.
When Mario left, for instance, there would have been a book profit on him (the sale price less the unamortised amount on the balance sheet). Same with any other player. The amortisation stops the day the payer is sold.
When a player signs a new contract, the unamortised amount left on the balance sheet is then spread over the remaining years of his new contract.
For example, Dzeko costs £25M and has a 5 yr contract. It's amortised at £5M per year. After 3 years, his 'book value' is £10M (£25M - 3x£5M). He signs a new 5 year contract so his book value is amortised over 5 years again meaning only £2M (rather than £5M) hits the p&l every year. Multiply that by 7 or 8 players, and we probably saved £30M+ from hitting the p&l by doing that.
I think this is one of the reasons you saw many long term contracts being signed for older players. Short term gain when we had issues with FFP but longer term pain as we'd have difficulty getting shot of players on fat contracts. But by then FFP would have been overcome, so we accepted this hit.
Negredo. If I'm right here, he was sold last season. It was called a loan, but there was the guarantee that Valencia would buy him at the end of the season.
We had a spending limit imposed upon us by UEFA last summer. From what I read last summer, we had to speak with UEFA before we bought Mangala as, without including the full Negredo income, we probably would have overspent. We can't include the Negredo income this year if we already included it last year.
Want more? The new tv deals hadn't started by this summer. The new SKY deal starts next year so we really can't include that in this year's accounts. The new BTCL deal only starts now so will have some impact on this year's accounts, but not the full impact of all the extra money from the deal as some of it will only be decided next year (2016) when the competition is finished.
Topdawg- Legend
- Posts : 26191
Re: City spend just £8.7m on 6 players this summers
I enjoyed the Karren Brady story. That is one bitter woman , Laughed at the fact west Ham are 92 million in debt & we owe buckleys. Think she really needs to read up on ffp.
skyblueoz- Cult Hero
- Posts : 5018
Age : 65
Location : Perth Western Australia
Re: City spend just £8.7m on 6 players this summers
skyblueoz wrote:I enjoyed the Karren Brady story. That is one bitter woman , Laughed at the fact west Ham are 92 million in debt & we owe buckleys. Think she really needs to read up on ffp.
Yeah, made me laugh that one.
blueboy- Legend
- Posts : 25330
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