SnoopThe cost of the contract is amortised over the period of the contract.El MayorNikola ZigicJust to be clear, I'm on about paying to get someone else's manager, not sacking Rooney.
Like if it cost us £1m to get Corberan from West Brom, would we spread that £1m over a three year contract?
That's a good question and I don't know if it's the case.
In the case of players, it is amortised over the length of the contract cos players have a value due to the fact they can be transferred out.
Are managers the same? I'm genuinely not sure, I'd think not but I do not know enough and I wouldn't use what I say as gospel.
I don't know the answer but the principle is the same - if we signed Corberan from West Brom for £1m on a 4 year deal then next Jan Man City want to sign him to replace Pep, we would be due compensation for him. An accountant should be able to justify it but I'd think it might be riskier since it isn't as common so it is more likely to be challenged.
Let's go and get Corberan then. Firstly because he's good and secondly because it'd be effing hilarious.
NewheavenlybluesAnother FFP question:
Have the allowances for FFP been raised with inflation, or are we still using figures set years ago?
Still using the same figures (£39m over three seasons when £24m of equity injections have been taken into account).
There were some allowances for Covid but they'll drop off soon.
I think the reason it's not been pushed upwards is because they don't want clubs to make huge losses, the point was to make clubs more sustainable.
El MayorNikola ZigicJust to be clear, I'm on about paying to get someone else's manager, not sacking Rooney.
Like if it cost us £1m to get Corberan from West Brom, would we spread that £1m over a three year contract?
That's a good question and I don't know if it's the case.
In the case of players, it is amortised over the length of the contract cos players have a value due to the fact they can be transferred out.
Are managers the same? I'm genuinely not sure, I'd think not but I do not know enough and I wouldn't use what I say as gospel.
In accounting terms, players' (and managers') contracts meet the definition of an asset as they are controlled by the club and (theoretically at least) generate revenue. That's why the acquisition costs are capitalised and amortised over the relevant contract length
I do not what know what deal was done with Rooney but I know Chelsea (who sack managers regularly) keep paying them until they get another job and then demand and get compensation from the new club for poaching a manager who is still under a contract.
El MayorNewheavenlybluesAnother FFP question:
Have the allowances for FFP been raised with inflation, or are we still using figures set years ago?
Still using the same figures (£39m over three seasons when £24m of equity injections have been taken into account).
There were some allowances for Covid but they'll drop off soon.
I think the reason it's not been pushed upwards is because they don't want clubs to make huge losses, the point was to make clubs more sustainable.
But that also makes us more uncompetitive as transfer fees and salaries rise?
It's as though the EFL don't want us to push on to the nasty PL!
NewheavenlybluesEl MayorNewheavenlybluesAnother FFP question:
Have the allowances for FFP been raised with inflation, or are we still using figures set years ago?
Still using the same figures (£39m over three seasons when £24m of equity injections have been taken into account).
There were some allowances for Covid but they'll drop off soon.
I think the reason it's not been pushed upwards is because they don't want clubs to make huge losses, the point was to make clubs more sustainable.
But that also makes us more uncompetitive as transfer fees and salaries rise?
It's as though the EFL don't want us to push on to the nasty PL!
It's the same rules for everyone mate, the paranoia is just wrong.
Weirdly, I found myself in a WhatsApp group with Keiran Maguire (Price of Football man) a few months back and he is the authority on this, so I've asked & he said the following:
"It’s a tricky one, but gut reaction is that if you pay compensation to another club to release a manager from their contract (Chelsea paid Brighton £22m for Potter for example) then there is a case for amortising that fee over the life of the contract signed by the manager. However, when you sign a player you are buying their registration certificate with the local FA, and that’s not the case with a manager, you’re simply paying a release fee."
So, dunno really.
Louie DonowaHow did you in up in a group with him. A Last Man Standing game?Weirdly, I found myself in a WhatsApp group with Keiran Maguire (Price of Football man) a few months back and he is the authority on this, so I've asked & he said the following:
"It’s a tricky one, but gut reaction is that if you pay compensation to another club to release a manager from their contract (Chelsea paid Brighton £22m for Potter for example) then there is a case for amortising that fee over the life of the contract signed by the manager. However, when you sign a player you are buying their registration certificate with the local FA, and that’s not the case with a manager, you’re simply paying a release fee."
So, dunno really.
Ha, we didn't realise "Kieran" was him until he told a story about his first book launch & the offer to send 100% profits to charity, thinking he'd sell about 10 copies.
3 weeks later it's an Amazon bestseller & his missus is properly effed off with him.
He's got some good stories too - but I set him up to say specific childish infantile code words in his media duties on the day Everton got done for 10 points in return for donations to Trussell Trust, which he accepted with reckless abandon.
Louie DonowaWeirdly, I found myself in a WhatsApp group with Keiran Maguire (Price of Football man) a few months back and he is the authority on this, so I've asked & he said the following:
"It’s a tricky one, but gut reaction is that if you pay compensation to another club to release a manager from their contract (Chelsea paid Brighton £22m for Potter for example) then there is a case for amortising that fee over the life of the contract signed by the manager. However, when you sign a player you are buying their registration certificate with the local FA, and that’s not the case with a manager, you’re simply paying a release fee."
So, dunno really.
Maguire is sitting on the fence there, as many accountants do, but the accounting standards are quite clear - the compensation fee is a cost of acquiring control of the intangible asset and is therefore capitalised and amortised over the life of the contract. The fact that players have a physical registration is moot, it's the control that represents the asset, rather than a piece of paper
Yeah, I understand that & I'm sure you're a lot more qualified than me to comment, but this isn't a pure accountancy question is it?
H's question was about representation for P&S?
Louie DonowaYeah, I understand that & I'm sure you're a lot more qualified than me to comment, but this isn't a pure accountancy question is it?
H's question was about representation for P&S?
...which is fair challenge and I was about to say that the treatment is the same in this instance, but thought I'd better check first. It turns out that the P&S result only explicitly includes amortisation of player costs. Amortisation of other intangibles is excluded from the P&S calculation. The UEFA FFP regulations have a broader definition (I think it states "football related activities").
So, if you were to take the cost in one go, it would count against your P&S result, if you were to capitalise and amortise, then the cost would be excluded from the P&S result.
Techy point, likely open to challenge, and probably immaterial in the grand scheme of things, but interesting to me at least 😁