Anyone (like chipschups) care to explain how this these assets values are calculated with loan situations.
Scenario A:
Inter buys player for 30m€, signs him to 5-year contract with gross salary 6m€. Total amortization costs annually are: 30m€/5 (transfer fee) + 6m€ (salary) = 12m
Scenario B:
Inter loans player for 8m€, signs him for 5-year contract (given there's an option to make the transfer permanent) with gross salary 6m€. Total amortization costs annually are: 6m€ (salary) + 8m€ (loan fee) = 14m€ ???
Is this because it's not the amortization costs which we need to get in line but specifically this CL list thing (part of the settlement agreement)? So that they count only transfer values and as we can get the player for only 8m€ (for this particular season) and not for 30m€, it's better for us?
Of course here I'm referring to Vrsaljko transfer and already collapsed Malcom transfer (which would have included something like 10m€ loan fee).
Wasn't there some hiccups from UEFA regarding our amortization costs also?
But amortization costs over the years I assume.
Because in my example, the costs in scenario B is higher than in scenario A for this current season.
So how does it go, we should decrease our amortization costs over the years, meaning the situation won't stop after this season either but we must be tight with the money from next summer on too? For this season, it's the CL list we must be precise (settlement agreement) but the amortization costs will be always there, no matter which year if we want to ever buy new players.
Adriano pretty much covered things, but mostly I just wanted to add that the rumored Vrsalkjo formula you refer to (8m€ fee, 17m€ option) not only seems to confirm my already strong suspicions that we are in a much stronger expense position than capital, but makes me wonder further about the details of our asking price for Joao Mario.
On Vrsaljko:
As Adriano points out, amortization on loan + option is 0€ in capital/amortization, regardless of the amount of the loan fee. But as you observe, it also means he actually costs us more this year than if we bought him outright this (e.g. 25m€/5yr contract = 5m€, vs the 8m€ loan fee). But that 8m€ is pure expense instead of amortization. It's slightly ridiculous to me that we're outputting more this year than we would for a straight buy, but it makes sense when you consider how much more € we're bringing in this year than last, between CL and new sponsorships. It speaks to trying to fulfill the SA and not just FFP.
To your bit I bolded:
"This situation" will stop starting next summer (I think). As far as I can tell, it's only our Settlement Agreement that is putting additional conditions on us beyond simply being profitable. Once the SA is done, we are under general FFP, and from what I understand, general FFP only needs us to be profitable. So at that point we would only care about what € value is recognized in a year, whether it is amortization or expense wouldn't actually matter, so we wouldn't have to do loan + option gymnastics anymore. Doesn't mean we can spend like ManU because we don't have their incomes, but it will be a huge help to not be shackled to the loan + option formula any longer.
On Mario:
The Vrsaljko situation makes me wonder how a capital loss would actually be treated differently than how I'm used to seeing it treated. On Vrsaljko we are taking a bath on expense so we don't need to outlay capital. But if we were to sell Joao Mario outright or with loan + obligation, even if we did that an made a loss, that loss should accelerate onto our books this year and be considered an expense. That we don't seem willing to budge whatsoever on the asking price makes me question whether that's truly just a negotiating position, or if there is something in the SA which penalizes us for writing down the values of any of our players?
Ugh. I can't wait for our SA to be over. My head hurts. :wallbang:
10 years of FIF
Piss off wankers.
