Ahh, didn’t really think of Broja’s contract length, just that both quality and want first team football.
If he really does then it is down to him to push for a loan extension or a tino style transfer - both of which give him the option of playing for Chelsea again one day
Naturally I would prefer a permanent signing as there is no guarantee they buy him back and it would likely have a clause whereby the buy back only comes into effect after two years For example I don’t believe they will buy back Tammy for 68m ever. It’s not impossible but it is immensely unlikely A loan would have the upside of allowing our transfer budget to be spent elsewhere Worst option will of course be not having him at all next season but I like to think we planned/scouted for this as he was only ever a one year loan with no buy option
Loaning players isn't a major profit centre for them, I don't believe. Chelsea's warehousing of young players is effectively an exploit of the FFP rules; because one of the things that allows you to ratchet up wages is profiting on player sales, and because that profit is measured in dumb accounting terms rather than "price sold for minus price paid", there's major value in holding on to youngsters for a few years and then selling them. I believe that a buyback clause actually makes more sense in that regard, because it allows you to register a profit on the disposal of the registration now, and have another bite at the apple later if desired.
I assume by “dumb accounting terms” you mean “standard accounting terms” They benefit more from a big sale at the moment because he has a low value in their accounts. If the sources online saying that he is on 8.5k a week are true then he will be “worth” 2m to them right now. 1.8m at the end of the season A big sale will generate 15m plus of “surplus” that can go into fees and wages But if he goes back and they give him a new 5 year deal at 40k a week then I am pretty sure his value goes up to circa 10m in the accounts. A sale then is a smaller surplus At least that is how I think it works with players you never paid a fee for
This is interesting, after the talk today about Broja and his loan situation. Ramsay was on loan at Crewe for the season and we have recalled him to send him to Ross County. While I was having a look at Ross County's website I saw they've had the same happen to them with a player who was on loan from Arsenal recalled to be sent to Hibs. Although I don't think it will happen with Broja, it does go on.
Guess it depends on how the contract is written . Apparently Chelsea wanted Emerson back from Lyon and they refused - even when offered circa £3m. Suggesting there isn’t a break clause or that it is much higher than that and not worth it
I mean standard accounting terms, but they are dumb as they pertains to player trading. Broja is, on paper, literally worthless. So is JWP. So is David de Gea. A player's paper value is effectively their purchase price amortized over the length of their contract. So if you come up through a team's academy? Worthless. If you remain at the club beyond the point at which your purchase price has been fully accounted for? Worthless. This also creates an incentive to churn players. If I pay £20m for a player this year, signed on a five year contract, and sell them for £15m two years later, I have recorded a profit on their sale of £3m, because the player's registration will be valued such that £4m year for 5 years will be costed. So when two years elapse, they'll be 'worth' £12m, less than the £15m you sold them for. Thus, if they sell Broja, the total sale price can be booked as profit.
Are you sure they don’t recognise the value of the contract they are on? It would be an internally generated asset but there are standards for that. And basing it off their contract is probably more solid rationale than a lot of internally generated assets - especially things like software Surely that example of the 3m profit only really works if you pay them less than 3m over the two years - which seems unlikely. The wages are all expenditures. Sure it’s spread out versus a one off lump sum in but football clubs will need to accrue for things like this if they have any sense
The contract isn't an asset, it's a liability. It's the annoying thing you have to do in order to retain possession of the asset. Players are treated as assets in the same way anything would be. Say your company buys a truck. The truck costs you £20,000, and that price is amortized over whatever its assessed useful lifespan as an asset would be. So if the truck is deemed to be not-worthless for 10 years, its value on paper is decreased by £2,000 a year until it's on-paper-worthless, even if you can still drive the truck thereafter or sell it. With players, their useful lifespan is the length of their contract.
It turns out that uefa have some kind of rule that prevents home grown players from being recognised as assets. In normal accounting you would recognise them and it would be a highly subjective accounting judgement But it seems uefa definitions supersede this. Your truck example only applies in on circumstances of asset value recognition. Albeit the most common one - especially with things like trucks
This would absolutely make my year if it comes off: https://www.footballinsider247.com/...-henderson-as-man-united-u-turn-on-the-cards/ Henderson! Fingers crossed
If the accounting functioned in the fashion you'd expect it to, then you would expect to see losses booked on the disposal of player registrations fairly commonly. You do not: we have registered a profit on player sales every single year since we entered the PL, including years where we had to sell a bunch of players who were on big contracts for pennies because they were bad at football. It's extremely rare for any club to register a loss on player sales for that matter. The only example I can find of it happening was Man Utd in their 2015/16 books, and that's because they sold a couple players who hadn't been at the club particularly long for significant losses (Angel di Maria and Robin van Persie, mainly), but even then they registered a paper loss of only £10m. Another example: in 2017/18, Liverpool sold five players for approx. £157m (using Transfermarkt because the exact figures aren't publicly available) and booked a profit on player sales of £124m. I cannot see how that would be possible if it was treating their contracts as an asset, because Coutinho alone would have been owed the differential between those figures...he had just signed an enormous new five-year deal a year previous. Here's the verbiage from our latest set of accounts. Note that our intangible assets cratered in a year, but our wage bill and future liabilities sure as hell didn't.
His 100k a week contract will be a problem. Especially whilst we still have the other two. Not sure how feasible moving one of them on in January will be
I don’t quite follow how this interact with my comment in the quote. UEFA rules mean that players have to be recognised this way. And all the rest you list below follows from that Apparently you can also book impairment for intention to transfer, injury and poor performance according to PwC. If that is a separate line and that expense is separate to player trading (writing down the asset before the trade happens) then a profit is even more likely I didn’t read the whole document though as that would be a bit much whilst on the clock
You stated that UEFA rules require home-grown players specifically to be recognized as zero-value assets. They do, I'm just pointing out that's not where the strangeness ends. And impairment is generally a small figure at least in our books. In 2019, we registered £2.3m in impairment of player registrations.