Widow
Full Member
Wishful transfer income: 125m
It's not as easy as United getting an extra 125 million to spend though. Amortisation and FFP will still have a massive say on our outlay, for example...
When we paid £50 million for Mount, United didn’t write a cheque to Chelsea. Instead, they agreed to pay an annual amortisation rate spread across the span of the contract, which is 5 years. So, United pay Chelsea an annual amortisation of around £10 million.
Couldn’t this system be abused by clubs handing out massively long contracts to keep their transfer spending down? *cough* Chelsea *cough* yes and no. But that’s how transfers are paid for these days, with the total amortisation of all transfers added to a club’s accounts – these annual outgoings also form part of the relevant competition’s own financial fair play calculations. That’s essentially amortisation in football.
If a club agrees a contract extension with a player, the amortisation cost then gets spread across more years – bringing down the annual cost. Bizarrely, rather than cutting their losses on a player that has lost their mojo, a club may instead offer them a contract renewal in order to barter down their annual amortisation fee.
This would be a way for clubs to pass their FFP checks, and while it would leave them with ‘dead assets’, i.e. unwanted players rotting away in the reserves, it might just be financially smart for them to go down that route.