FFP

[Eric the Half a Bee]

I'm reading that Man City are prepared to pay £450m for Messi which, given their previous issues with their finances, it makes me wonder how any club could afford it.

When players are bought, is their value then seen as an asset? I must admit to not knowing how these things work, but is there anything that could stop this happening - player cost is an outgoing on one side of the balance sheet, countered by player value as an asset?

Given Derby's massaging of their stadium valuation, there is surely huge scope for clubs to be creative with their books to find ways around FFP. That means, to quote another MB poster, it's not worth a vat of pig's piss.

[Des Parrot]

Their kit deal alone is worth £750m, I doubt Derby's is worth £75k.

[Enoch Mort]

I think the transfer fee of a player is written off over the period of the contract. So, if it’s £450m for a 3 year contract £150m would count towards FFP each year, the residual balance remaining on the Balance sheet. That is my totally unqualified opinion. No doubt Keith Morgan could give a definitive view.

[Des Parrot]

I think the transfer fee of a player is written off over the period of the contract. So, if it’s £450m for a 3 year contract £150m would count towards FFP each year, the residual balance remaining on the Balance sheet. That is my totally unqualified opinion. No doubt Keith Morgan could give a definitive view.

Looks like a 5 year contract between Man City & NY City, maximises their commercial income on several continents. Normally amortised as you've said. their will be a huge PIR element as well.

[Enoch Mort]

Looks like a 5 year contract between Man City & NY City, maximises their commercial income on several continents. Normally amortised as you've said. their will be a huge PIR element as well.

Man C have been sailing very close to the wind in terms of FFP. If NY City are involved I assume the cost burden would be shared making the annual cost to Man C over 5 years very manageable (if Messi can last 5 years on the pitch)

[lardy]

Man C have been sailing very close to the wind in terms of FFP. If NY City are involved I assume the cost burden would be shared making the annual cost to Man C over 5 years very manageable (if Messi can last 5 years on the pitch)

And if he doesn't, they'll appeal and win.

[Enoch Mort]

And if he doesn't, they'll appeal and win.

Sadly you’re probably right.

[tforturton]

How is it Financial Fair Play, if only two clubs in the Premier can even contemplate signing Messi?

[Optimistic Nick]

Pretty sure its all balance sheet initially. Ie cash reduces by 450m (or more likely a bit of cash and a bit of debt); intangible assets - player contracts increases by 450m. The contract asset is amortised over its life so if it was a 3 year contract, youd get a 150m expense in the p&l every year for 3.

Im sure there is more detail for example ive no idea how auditors get happy with the carrying value of the player contract in any given year but at a very basic level that's what is expect