How can an £80 million loss be a profit? (2/16)
Amortise: To pay off gradually, usually by periodic payments. (3/16)
It's standard practice for every club (well, unless you're Derby County) to amortise transfer fees for new signings. (4/16)
Breaking down the maths. (5/16)
Starting from £89.3 million, each year, we deduct £17.86 million. In year 1, his book value goes down to £71.44 million, and repeat again. (6/16)
His +1 extension means the amortisation expense changes from the 2020/21 season. (7/16)
New Contract = New Amortisation Expense. (8/16)
The new amortisation expense takes effect from the season the contract changes. (9/16)
🐍 warning. (10/16)
Amortisation can prevent clubs from reporting bigger losses. (11/16)
How are player sales treated? (12/16)
Put all that together, and a £9 million fee for Pogba this summer would represent a profit. United will obviously push for a bigger fee for obvious reasons. (13/16)
A bumper signing, with only a small bump in our payments for this year. (14/16)
Selling players opens up more room for spending than you may think. Any fee received for "deadwood" is a big help for signing new players. (15/16)
A big thanks to Football Finance Expert @KieranMaguire, and his book "The Price of Football". He has a podcast of the same name (@POF_POD) with co-host @kevinhunterday, so if you want to learn more about football finance every Monday and Thursday, give it a listen! (16/16)
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