Did anyone else see the thing in the news today about the Premier League teams voting to restrict the length of time that clubs can pay transfer fees over. I heard that headline and looked up in interest, expecting them to restrict it to a year perhaps, not being aware of the length of some existing deals. In fact, they have voted to restrict the payment period to FIVE years, stating that Chelsea bought a player, gave him an 8 year contract and are paying his transfer fee over those 8 years. Dunno about you, but I found that quite ridiculous. You can easily see how some clubs known for throwing money around can get themselves in a complete mess if they just keep signing players on these terms. Of course, this doesn’t mean teams right down the EFL signs players on fee agreements like this, but EFL clubs don’t tend to dish out 8 year contracts. Crikey, just think if Conway had given the two rubbish Belgians 8 year contracts…
I've banged on about this before, but I'm like 90% sure that there are finance companies out there who will forward clubs the full fee (minus a commission) and take responsibility for chasing the paying clubs for payments. I think it's called factoring. I guess the fee is the important part, and will depend on risk so could be quite high over something like eight years?
@Gordon Ottershaw This is actually poor reporting from Sky, they have confused paying for a transfer and amortisation of the cost of a transfer in club accounts. What the premier league have agreed is to adopt the approach that a player’s cost can only be written down in the books over five years not the paying the seller. Chelsea were signing players on 8 year contracts which allowed them to account for the cost over the lifetime of the contract. They may well have paid the whole cost upfront but for accounting purposes, and crucially football fair play the cost would be 1/8th of the transfer fee per year. To use an example a player costs £80m. This would show in the accounts as depreciation of an intangible asset of £10m pa. With the reduction to 5 years the annual cost would now be £16m.
I believe they can still hand out 8 year contracts, its just the payment methods whats been reduced to maximum 5 years iirc mate. Was reading about it all a couple of months ago when it was all over the news, and its quite eye opening just how many actual loopholes there is to avoid things like ffp etc
Didn’t realise until yesterday the Baseball player who had a thread on here for his huge contract that was staggered plays for the Chelsea owners team.
I may be wrong but could it be more to do with the amortisation of the investment? an accounting concept. Spreading the total cost over a number of years on the club's balance sheet.
