Man City Charged FFP

[topperharley]

Everyone is taking about signing long contracts with players (up to 10 years) as a loophole in the FFP regulation. I do not think this is an effective loophole at all. First and foremost, it is legal. But more importantly, it is creating enormous problem in the future for these clubs. They know that this is freeing up more money now for less money in the future. The more players they sign on long contracts, and the more short term head room they create, the less the head room will be down the road. It is really stupid. It will come back to bite them. I hope they keep doing it though, ending up i big problems 3-4 years from now.

Only if they don't sell them.

[QPROslo]

Only if they don't sell them.

If you buy a player for £30m and give him a 10 years contract, you have to amortize £3m a year. The annual cost is just £3m plus salary, as opposed to annual costs of £10m plus salary if you gave him a three years contract. At first glance, it looks as if it it a £7m saving annually, and it is correct that the head room for FFP calculations will be £7m more, which can be spent on other players.

However, lets assume the player fails to impress, and the club wants to sell him after a year. The written down value after one year is £27m [£30m minus £3m). At the time of selling, the club needs to amortise the remaining £27m, which will eat into the budget big time. What looked like a good idea comes back to haunt the club the following year. Many clubs will not afford to sell unsuccessful players, as they will have to amortise the remaining part of the purchase price immediately, which will lead to lower head room for acquisition of new players.

If many players are signed at the same time on long contract, and the club spend the extra money (freed up by offering very long contract), the club will quickly find itself stuck with players it cannot offload. If all players are successful, this might work. If some are not, they cannot move them on and cannot create room for new signing.

To me it looks like a recipe for disaster. I hope the "doping" clubs go down this route.

[SheepRanger]

If you buy a player for £30m and give him a 10 years contract, you have to amortize £3m a year. The annual cost is just £3m plus salary, as opposed to annual costs of £10m plus salary if you gave him a three years contract. At first glance, it looks as if it it a £7m saving annually, and it is correct that the head room for FFP calculations will be £7m more, which can be spent on other players.

However, lets assume the player fails to impress, and the club wants to sell him after a year. The written down value after one year is £27m [£30m minus £3m). At the time of selling, the club needs to amortise the remaining £27m, which will eat into the budget big time. What looked like a good idea comes back to haunt the club the following year. Many clubs will not afford to sell unsuccessful players, as they will have to amortise the remaining part of the purchase price immediately, which will lead to lower head room for acquisition of new players.

If many players are signed at the same time on long contract, and the club spend the extra money (freed up by offering very long contract), the club will quickly find itself stuck with players it cannot offload. If all players are successful, this might work. If some are not, they cannot move them on and cannot create room for new signing.

To me it looks like a recipe for disaster. I hope the "doping" clubs go down this route.

I would also assume that as the selling club is getting their money over a much longer period that the buying fee is inflated to allow for the loss of more up front cash. I suspect that these clubs are buying up top talent and expect to recoup the yearly amount through loan fees.

To an exteat we did this with Nico. He had many loans where we received a fee and had the majority of wages covered which offset our costs when theres a downside in performance.

The likes of Chelsea will puck up the best talent and choose where they play, nit to their nearest competitors, therefore attempting to buy an advanage through excessive player warehousing.

[Shania]

Why only Man City? What about Man U and the other big clubs?

[Undecided]

Why only Man City? What about Man U and the other big clubs?

All in good time?