Why transfer fees aren’t as important as you think
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When a footballer signs for a new club it is often their transfer fee that makes the headlines. But whilst a transfer fee is significant, a player's wages can have an equal impact on a club's finances.
Abhishek Raj explains how. Marco Bevilacqua illustrates.
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#Football #FootballFinance #PremierLeague - Sport
Us Barca fans didn't really know or care about wages until Bartomeu taught us a hard lesson ☠️
You got a solution blame real madrid for your every problem. 😂
@dhirajkh5444 they weren't much of a problem last season...Don't look like they will be this season neither
@@dhirajkh5444that random indian kid :
@@faissalsanfo2454Until they get knocked out the champions league…
what barca fan ? are you season ticket holder ?
I'm surprised that we haven't yet got to a place where we have a representative headline figure for a player purchase that factors all this in. A bit like a transfer equivalent of xG. Rather than saying 'they signed him for £100 million', it would be something like 'Kane joined Bayern for an xC (expected cost) of £46.5 million per season'.
It's simply because 100 million is more sensational than 46 million per season. Why rationalize when you can bring in more readers and viewers by just focussing on one big number.
So in case wages will be at one point included in the discussion I'd expect that the expected cost won't be calculated per season but rather the total. Because bigger numbers equal to bigger headlines...
As long as there is transfer fees, I don't think there will be any headline focusing on annual expenses. I don't follow MLS but most of US major sports league will use annual expense as headline. This is because the transaction is based on their franchise system, so every team in that league essentially has the rights of these players. Most US teams would use trades as a transaction, to obtain players, they would trades players that has approximately close value. So when a player sign a new deal with a new club the highlight will be "Player A sign with team X for 8x8" meaning the player will earn 8 mill for 8 years. Most major league in US also have wage cap so team can't get over certain amount of wages. This could also be the reason why they would highlight the annual expenses.
That wouldn't work imo. A lot of players/clubs don't like announcing their official wages. Plus a lot of players have variables/bonuses in their contracts that change the wage they get e.g. relegation clauses, champions league clauses, goal bonus etc...
@@W1ese1 story before facts always
Kane joining next season on a free transfer would be a much lower xC while Bayern might had to pay him the sam amount as the fee just for signing bonus. You don't really find a lots of (reliable) information about that
The thing is that the cost of a player can really pressure them, while their wage can boost their ego
depends, for me CR7 is the only player in history that live up to his price tag as the worlds most expensive player back then, the rest are just intagram footballer
@@TheDarkKnightRacistdont forget KDB as well, he came as a big signing with a lot of criticism because of his from at Chelsea.
@@TheDarkKnightRacist Zidane, Figo and Ronaldo as well (almost all galacticos worked)
Bale? I am not the biggest Madrid fan but he did help them win multiple trophies + 5 UCLs or no? The ending wasn't great but he's probably the second best after Ronaldo to be bought for 100m@@TheDarkKnightRacist
@@SS-up5sche was on and off only performed in big games
Sadio Mane was at 475k a week at Bayern.
For those who don't know. 😅😅
Thanks really dunno!!
Holy smokes, even more than Kane right now! 😅
he earned more in arab
@@TheDarkKnightRacist Because it's Saudis.
Ronaldo and Benzema wages are 2mill a week.
@@StillAwesome21 nope kane earns more. Mane earned 22m € annually and kane is on 25m. you forgot that Manes wages were in euro and kanes 21.5m in pound
This point is particularly poignant with Arsenal. There has been a lot of criticism about how much Arsenal have spent in the transfer market in the last few years, and many have wondered how they remain within FFP - the answer is that they have a low wage structure. Particularly when they have mostly young players, an advantage of that from a financial perspective is that you can keep squad wages low.
Makes a lot of sense.
The consolidation of debt also helped a lot in terms of interest payments being lower. But otherwise Arsenal's model is sustainable
Next should be a video on wages. For example, Hulk never played in the top 5 European leagues, but was earning 350K in China for many years. So are a few other players who are unknown but would never leave the Middle East to Europe.
He played for Porto didn't he
He did my boy
@@619_superdugcomprehension isn't your strong suit 😂
@@619_superdug read the last sentence he wrote. 😂
@@619_superdugthey arent saying Hulk is unknown nor Porto or saying anything bad about the Portuguese league.
Theyre saying that there are other unknown players to the masses, who arent Hulk, who play outside the top leagues and make good money.
Comprehension dude.
Eye opening video. As football fans we definitely focus on transfer fees too much without thinking about the bigger picture
Excellent video, clearing out deadwood enabled chelsea to create more deadwood for future with lower wages. wow what a plan.
But for longer
I did not understand what Todd Boehly was doing until I read they basically give like 10-15 year contracts in BaseBall, and he owns a big baseball team, probably thought you can do the same in Football lol@@chubs2312
How lucky they were that Saudis have opened the chequebooks. Over the past few seasons other teams have lumbered with deadwood for years. It really was a get out of jail free card for chelsea
@@chrisr1415don’t act like no other club took advantage
You really think the new owners will allow for that? Damn, you're very naive
If you want to compare Kane and Hojlund, you also gotta consider the commercial benefits as well. Because Kane is already a big name, he will also bring income through shirt sales, sponsorships, investment interests, ticket sales, TV/media views, etc. These factors can further offset that annual figure that they have to pay. Not to mention, if they progress far in all (or the "important") competitions or ended up winning big by the help of his proven quality, more money can be generated.
If United were to bid for Kane they would be asked to pay atleast 130 m for Kane because levy didn't wanted to sell him to a local rival, that was the reason he never played for City levy never wanted Kane to go to another premier league club
True, you can already see how many more people are interested in the bundesliga with the harry kane move
That's IF they progress.. nothing stopping United still having a bad season, Kane doesn't gel or gets injured.. suddenly all that revenue is lost. It was a risk.
Clubs get a tiny percentage from shirt sales, insignificant.
Sponsorships are long term deals, unless a player is signed right before one is set to be renewed, it's not a factor.
Same with TV deals. Multi year.
Bayern will always sell out their stadium lol with or without X player.
Individual shirt sales/commercial revenue is a drop in the ocean for big clubs. They make a small margin on the shirts and players do their own sponsorships and add’s so there’s little to gain from there. It’s impossible to measure but a top player could bring in 2-4 million in commercial revenue which obviously helps but is fairly insignificant. The only players this is really a factor for is Ronaldo, Messi and Neymar.
That was the irony of the Harland deal. People thought he was a bargain. But once you factored in wages (reported) agent fees, signing bonus, bonus for his father etc it became a deal only Man City could really afford. One of the most expensive signings of all time.
Which is why netspend merchants at Chelsea and City are missing the real spend
Xactly. The Messi deal is pretty crazy, too. But everyone seems to say Messi did it for the passion
But you can argue it's paying off at the moment
Yes. I remember people comparing the Harland deal to the deal made by Liverpool to sign Nunez. They only considered the transfer fee...not looking at the wage bill
@@broman1429 He is worth every penny for City. It's just funny how many people parade his release clause fee and ignore the vast majority of the financial variables in the deal. He wasn't a steal. City paid massive money, because he is worth massive money
Also explains why Liverpool didn't go for Jude Bellingham
Indeed. They could get both Szoboszlai + Gravernberch for very close to the same costs of one Bellingham.
And there are knock on effects. MacAllister is a world cup winner at 150k per week, one of the better midfield performers in Qatar 2022. What would he think about playing alongside a promising yet relatively unproven kid getting much much more than him? Man United has put themselves in a hole with some of their contracts, where young players can rightly point to other contracts and hold out for a big increase if the club wants them to re-up on an extended contract.
Thank you for putting the wages as per year! It can get really confusing when PL fans talk about wages per week
So basically, modern football functions on a premise that clubs spend money they don't have rather the money they WILL have. That sounds healthy.
As an American I always found the obsession over transfer fees baffling. I always knew to spread out the transfer fee over the span of the contract. While fans are going on about how much a club spent on transfer fees I was always concerned with the roster wage. It's why I rate teams like United (£200 milion per year with an average salary of 6.2 million) as more of a joke than Chelsea ( £128 million with an average salary of 4 million).
Plus with a younger player, it’s more likely you’ll be able to sell them on at the end of their contract and recoup those transfer fees, but the older a player is the more likely you won’t get as much, or nothing at all if they’re retiring.
whole video about how transfer fees are way less important than wages, yet you talk about “not get as much”. Did you even watch the video
@@cormachamill2003You may not have understood my comment. I am talking about the transfer fee that a club will get when they sell a player on to another team, after having paid the transfer fee for the player and had them on the team for some time. With younger players, the transfer fee tends to be lower, and goes up as they progress. A team can make a profit from the difference. An older player reaches a point where their transfer fee drops the older they get, and there is a risk that the player will retire, meaning that the team may have a loss on the transfer fee. With transfer fees, you have to consider both: the purchase and the sale.
Younger players tend to have lower wages, and this transfer fee differential is another benefit to signing younger players.
Glad we're getting to hear Joe's silky smooth voice-overs again more often. It's like a calming voice over a tannoy system telling us not to worry about anything, even though the situation we're in is otherwise pretty dystopian
Wages is also much more relevant to tell how powerfull financially a club is.
Example : look at Liverpool fans who argue that they're 8 or 9th team who spend the most in England.
But it's transfer fee.
Last year Nottingham Forest spend more on transfers, you cannot tell that's because Liverpool is poorer !
Liverpool is since years 2nd to 4th higher in salary, and that's is far more relevant of how powerfull financially Liverpool is.
Same for City, United, and other financially strong clubs
It is a nuanced point. Liverpool had a lot of seasoned players that they won many trophies with and were aging together. That naturally ups the wage bill. And they are saving buckets on transfer fees up until it hits them that they mush bring in 4-6 young midfielders immediately.
The video does make an important point: that the biggest players can have wages that eclipse the transfer fee. But more typical players you might pay a 40M transfer for are likely only earning 5M per year for 5 years. But you can sell a dud player and probably get those modest wages off your books. But the 40M is at risk immediately.
@@ComradeOgilvy1984 I strongly believe that if big clubs as Liverpool or Bayern dont spend to much money on the transfer market, it's because they dont want to make a too big mistake, which means a player who will become so bad but with a so big salary that no one will want him
A type of player PSG, Chelsea, Barcelona or Real Madrid know too well
Liverpool isnt poorer than Arsenal or Man U
But when these clubs spend so much money on Sancho, Antony, Maguire, Pepe, and failed... they wasted so much money they cannot use to replace their mistakes
Liverpool bought these last years many offensive players (Gakpo, Darwin, Diaz, Jota...)
At the end, they spend approximately the same with Gakpo + Nunez as Man U with Antony.
But in that situation
1) more players buy = more chances to have at least one success
2) a failure has a minor impact in comparison
@@vincesalamander5980 Oh, I absolutely agree. Liverpool is a club that avoids bringing in a player for more than £150k per week. The idea that Mbappe would ever play for Liverpool was laughable once PSG pumped his wages up into the stratosphere.
Liverpool can look prospects in the eye and tell them they can offer a good wage that is fair in the context of their dressing room; but if they want very highest possible salary over playing for Klopp they can sign elsewhere. What Liverpool does do is offer contract extensions with good wage bumps for players that succeed. And with this approach they rarely have wage albatrosses hanging about their necks, because it is easy enough to move players off. (There have been players with injury issues, but you cannot sell/loan an injured player, and it was not as if Klopp did not play them when they were healthy.)
In short, Liverpool does not mind paying high wages once the player is a proven success at the club. They are very disciplined with the salaries of new players.
Makes me understand that it’s not only the fees paid for players that matters alone but the wages offered and how said wages are incorporated into the transfers as a whole wow.
Let's disagree about Kane transfer, extra 30 mil euros from Hojlund to Kane is not a "just", you literally can sign 1-2 players for another 30 mil euros, second of all, 100 mil was a price tag for Harry Kane was to Bayern, it will be 120 mil to 150 mil euros for Man Utd as they play in the same league.
His point exactly...
Prem Rival tax + English Player tax + It's United tax £200M easy
@@gertjan3329 learn to listen, tifo said that man utd could've signed Kane for another 30 mil, but the salary could cause them the trouble, can't you understand that simple term ?
I have seen experienced journalists asking "why didn't United just go for Kane instead of Hojlund?!?!?!" as if the two deals were remotely comparable.
In 2023, journalism is a confederacy of dunces. The industry attracts pseudo-intellectuals. They get worse and worse, dumber and dumber, every year.
Thanks for explaining that so well
Weird nitpick, but I wish European outlets would just report a players total salary in a contract than on a weekly basis. Saying they'll get paid a 5 year, $100 million contract just makes more sense than trying to say $300k a week or something to say effect.
12th place and hearing tifo just explain things and awesome things are very cool for me keep it up tifo!
Wasn't Amortization limited to 5 years after cheelsea started circumventing the rule in January??
For European competitions. But they aren't affected this season
@@chubs2312it's like they're not planning to qualify again for the next two seasons
@@fiskern2241even if they join them the deals were done before it's a loop hole😂😂
It's not circumventing a rule if the rule wasnt in place...
Easily the best thing I’ve learnt this week..!!
Coming from North American sports, I always found it odd how it was transfer fees that made all the headlines in football vs salaries in the 4 major NA sports. Perhaps this will change with the increasing importance of wages.
But most of transfer news didn't even mention about their wages if they're move to their new club. Thats why sometines I didn't know about it and the media only mention about transfer fees. Only some sources mention about player wages when the transfer market on-going.
this video puts things into clear perspective, thank you!
Soccernomics by Simon Kuper and Stefan Szymanski teaches this very well!
Total cost of ownership includes transfer fees, wages, bonuses, agent fees/commission, and commercial contracts with the player. Most people only look at two or three out of these else no one would bat an eye over the claim that Haaland is by far the most expensive signing in English football history.
What's his annual wages?
@@danielating1316he apparently gets 700k a week so you do the maths.
@@ManuelMaceira_14what? No lmao. Haaland earns roughly around 350-400k. Even KDB doesn't earn 700k. Agent fees/commission are not included in the wages, but in the transfer fee itself. It's not a recurring bill.
He makes about £900k with all his bonuses( bonuses related ) included , the £400k is just the base
@@kulanivictorgolele9696your source 😂😂 cause goal bonuses aren't even close to 100k so wdym
This is great to hear as a Man United fan, thanks for giving me some blind optimism👍
And you should expect it to be even better. United would have had to paid more than £100 for Kane.
@@JbaJoBaNdno they wouldn't. They would have gotten him on a free next year. It's why spurs wanted to sell him now.
Spurs would absolutely have demanded a premium in order to let him go to another english club@@patrickbateman1660
Thank you for making this video. As a Chelsea fan, I'm going to share this video with them.
Great one and very simple so people can learn and share this important piece of information
YES THIS ANNOYS ME ABOUT FOOTBALL FANS SO MUCH THANK YOU FOR TALKING ABOUT THIS
There is one thing one should consider with Hojlund's contract though. If performs well he won't play out his current deal. If he for example scores 20+ goals in the next couple of PL seasons he will sign a new contract (which will almost certainly include an extension) with massively improved wages. This would obviously raise his yearly cost in the amortization period. Thus his cost would only be so low if he "flops".
Us Football Manager player just nodding in the back, already knowing this for ages lol
as far as i know transfer fees are paid upfront and only in a few cases the transfer fee has been divided/year. But wages is something I never thought of, and I had no idea some of those players were making that much
Great video!
great video. And a dose of reality in this bonkers football world. Thanks tifo
The best way to see how this could work, I recommend people play Football managers
This is so informative for football fans! Thanks!!
Very informative and easy to follow video thanks
Without a better understanding of how much money is actually spent on players, you simply cannot properly understand Barcelona's financial situation. Offloading clement lenglet and umtiti are two of the most important things to happen to the club in recent transfer windows, yet nobody talks about it because there's no big transfer fees involved. They were on humongous contracts irresponsibly offered to them by the previous president Bartomeu. Ironically, you mentioned letting go of busquets but his transfer actually didn't affect barcelona's situation much in La Liga because busquet's contract was already ending and so he wasn't included in this season's wage restrictions anyway. However, alba was still on a contract for another year, and that helped the club a good amount. A restructuring of ter stegen's contract, which pushed back a portion of his wage to a future time, was also crucial for securing all of barcelona's signings this summer.
this why i love tifo man
*Simple educating, really.*
People talk a lot about transfer fees because that is usually the information available to the public. Wages are usually behind closed curtains (as well as match performance bonus).
Uli Hoeneß already said that the 100 million were paid in one installment without taking a loan
I realized this when i started playing FM, signing a player for 100m with low wages didnt really affect the club at all. But signing a player for free for 200k a week tells all the other players that we can now pay those sort of wages and becomes extremly expensive extremly fast.
Good video, way too many people have no idea how all this works while always claiming their rival is violating FFP.
Wow very well explained
This was discussed on the IRL channel, but as compared to Osimhen
Can there be a video explaining whatever is going on with Canada football/soccer?
I read somewhere that UEFA/FIFA is closing the amortization bug, i.e., you can't amortize more than 5 years now.
The fact that Chelsea managed to stay within FFP limits while spending so much still doesn't change the fact that they are taking a massive gamble on a complete squad overhaul hoping this group of player will click, knowing that they'll likely won't gain much if they sell them. It would be very interesting to see what would happen if they fail to qualify for CL in the next couple of years.
Have they stayed within FFP?
If they do not get a CL berth and the Prem. complies with amortization over a max. of 5 years (which must happen asap) then Chelsea are screwed.
Boehly is betting that any punishment will just be financial.
@@albertbrammer9263that's what Chelsea are betting on. They know they'll fail so they said "let's proper fail" because being over 5m or 100m won't change anything. So they've bought a load of young players betting a good portion will make it. But they're locked in with them now. If they don't work out they'll be in trouble because they can't sell them. If they do those 8 year contracts will burn them.
@@albertbrammer9263what's the premier league's future decision got to do with existing contracts? It doesn't back date
@@albertbrammer9263 Chelsea's amortization strategy is risky but not crazy for that particular club, as apparently the owner has deep enough pockets that it is not in financial danger. The league is not going to retroactively change the amortization rules, but enforce new rules for the future. I really do not care if some think Chelsea got away with something here.
How does offloading a player early in their contract effect the team that sold the player? Example, Koulibaly from Napoli to Chelsea for X amount over X year but the very next season goes to Saudi.
Is there any interest on the amortized transfer fees? Would there ever be deals where fees for previously sold players are offset against further deals?
‘Amortisation’ is an internal accounting treatment. The cash movement is completely different. Many transfer fees involve 3 or 4 instalments. If a club wants to amortise that over 8.5yrs - that’s their prerogative - but in cash terms, that money exits the business in 2 or 3 max.
while we are on the topic on FFP, it is surprising that last season's PSG wages wasn't brought up. Mbappe per week salary alone, was more than Inter's UCL Finals XI combined.
Bring back the podcast
please create a video / someone explain on how new castle are tackling the issue as mostly emphasized on their Amazon Doc, in terms of earnings and how that increase club spending flexibility
Newcastle will do exactly what Man City did: introduce fake ‘sponsorship deals’ to financially dope the business. That jacks revenue up, which elevates your FFP headroom. All one big scam.
"We paid for the transfer of Harry Kane without taking a loan". 🔴🇩🇪
Since players rarely see out the totality of their contract and are usually sold with one or two years remaining, does the selling club have to pay off the remaining transfer figure that they originally paid, or does it continue to be paid out as an amortisation?
Isn't the amortization calculation for Caicedo wrong here? Don't the updated FFP rules stipulate transfer fee amortization for only 5 years and not more? Or is there another wrinkle I am missing?
Only for Uefa. Not the EPL.
I reiterate the previous comment, and I also believe that it comes into effect next year.
Chelsea have run straight through a loophole
The comparison between Kane and Hojlund is widely off. At this level, all the clubs have quality players and the reason you have to pay this ridiculous amount of money for world class level players like Harry Kane is that you have to beat teams that already have the best players in the world. The only way you can do that consistantly is if you sign world class players and there is only so many of them.
That's why big clubs have to pay the extra costs: to lure in world class players who most of the time can lead you to win games against great opponents. The difference between a world class and a great player is not as large as their paychecks, but still.
That being said, Hojlund can absolutely work for Man United, but there's no such guarantee as you get with Kane. And even if Hojlund fits well and becomes an absolute masterpiece, you won't wait until the contract runs out, you have to renegotiate it for an amount which is close to Kane's. That's within 2 or 3 years no matter the length of the contract.
no cap... i only watch Tifo when bro is narrating... im not into the analysis of team tactics on that scale anymore.... such a great channel none the less. brother... let me see your face lol
An absolutely brilliant video that very clearly describes the complex business structures of the modern game. As always this channel provides excellent & insightful content, second to none always.
Awesome vid. But the comparison of Mendy’s wages annually and the others weekly was bizarre
There's a difference between what matters specifically for FFP and what matters for a clubs finances. If a club is "self sustaining" transfer fees matter as much as wages, as much as investment in infrastructure, as much as gates receipts, as much as TV revenue etc etc, hopefully you get the point...
Great video
I learned something new here! I thought it was all an upfront payment. Thanks!
But, UEFA have said all amortization will be over a maximum of 5 years. Only the Prem. has not gone along yet, but will very shortly have to do so to maintain CL and EL football.
@Tifo football, please can you do a video on how anyone can qualify as a top tier football coach in Europe? I would appreciate it 🙏
Am your biggest fan from Nigeria 🇳🇬
Can you teach this concept to all of the journalists over at the Athletic as well?
This is relevant for the Bellingham sale this off-season too
It's the same reason Rashy was given a big contract because it's only his wage that ot cost zero tranfer fee if you have to buy someone it would cost 3 times as much.
Perfect example is Juventus signing loads of free agents on huge wages over the past 5-10 years. They then went on to face financial struggles, albeit they were caused by multiple factors
+19% tax on the trasfer fee, wages only are 50%-52% of what is payed since the club pays the taxes, at least in Spain.
Hahaha I just made this point in a comment a few hours ago. Chelsea dropping their wage bill to 5th highest at £126mil is a huge improvement that will help the club move players, on loan, transfer, or even buyout should the need arise.
Yeah. But it also directly signals a younger team with less proven ability. It is a massive risk and if they don’t realise potential, Chelsea face financial ruin.
whoever chooses the music for your videos is a classy cool guy/lady.
One thing you have to be careful of is thinking Chelsea made some brilliant moves in signing the likes of Caicedo and Lavia. While they did make room by ridding of a few big wages, they are locked into the likes of Caicedo, Enzo, Lavia, Mudryk for the next 6-8 years. If they don't pan out then their total cost is going to completely hamstring Chelsea going forward. Oh and don't forget that they could have gotten rid of Azpilicueta last year for free but chose not to while gaining huge salaries like Cucurella. And they wasted 18M on half a season of Aubameyang, not sure getting rid of his contract is a win when they just added his contract last year.
Kepa being a perfect example of someone who in theory didn't cost too much on an annual basis but is an absolute albatross of a contract that has cost Chelsea an enormous amount of money. Just because their transfer fees can be amortized doesn't mean Chelsea won't have to pay it.
The summary is that Chelsea are in no immediate trouble now and will hardly be in the nearest future. They have been smart with their financials but not so much with their footballing decisions
Caicedo, Lavia, and Mudryk are not on hampering levels of salary. Which is the point of their section. Not mentioned Havertz, Mount, Pulisic, Odoi were (or requested to be) on bigger wages than those guys, and they are also off the books. Even Enzo is on a smaller wage than Kante was. Sportrac has wages this year 100m less than last, Id reckon they are missing some money and it will be
Not paying for it isn't the goal, it's spreading it out for FFP
This one is gonna get so many posts on replies to comparing players who cost similar up front fees
1:05 Was that actually a popular transfer question? By whom? Somebody who has no idea about the business? Kane was not "available", Kane wanted to move to Bayern - and only Bayern. You can't just get players by simply throwing money around, this is not the US where teams draft and move players without them having a say in it.
Regarding the topic at hand: it's one thing to write off transfer fees over a period of time, but it's another to actually *have* that kind of money available, because you actually *do* need to pay that money at once unless you figure out some payment plan with your business partner (i.e. the selling club). So while you can write off expensive transfers over the contract duration period you still need to pay the entire transfer sum upfront, which creates a big hole in the bank account.
You have to consider still that even though the fee gets ammortized over the full length of the contract, the buying club still has to pay the selling club all at once. That might not be such a big issue for PL clubs such as Chelsea or Man United who have money to burn, but certainly for the likes of Barcelona and Bayern with limited spending power
bayern doesnt have an issue paying up front lol. Unlike almost all top clubs, theyre debt free and didnt even take out a loan for kane. Also you dont have to pay up front, plenty of clubs pay in instalments. (for example torres from city to barca)
@@TheColdestplay most of the bigger deals involve only small instalments and bonuses compared to the upfront fee. And sure Bayern are fairly rich and debt free, but they cant spend a billion or even half of it in just a year like most major prem sides can because their wealth mainly stems from exactly not doing those kinds of deals. 4 years ago their club record signing was Javi Martinez for 40m € in 2012 to give you an idea how carefully they operate on the transfer market
@@dontmindme6995 you might want to fact check that, because tolisso joined in 2017 for 41.5m. also you literally said " has to pay the selling club all at once" which i refuted with my example of torres to barca.
and then ManU doesnt have half a billion to burn, they couldnt even afford pavard. So i dont see how bayern is any worse off than 900m in debt ManU. If bayern wanted to, they could probably take on a loan of half a billion and go ham. but there is no reason to spend money just to spend when you scout well enough
@@TheColdestplay oh yeah forgot about the Tolisso deal. Fact remains though that they have been very very careful with big money moves up until the Hernandez signing.
Also I'm pretty sure United could spend half a billion in a year, probably even a single window, without encountering major problems considering the kind of revenue they're generating year after year. In fact they've been spending the better part of a quarter billion every single window for the past decade, or it at least feels like it.
Either way my initial point was to argue against Tifo's point that transfer fees don't matter as much since it's still a major sum of money (in most cases) that the buying club will have to provide at once because ammortisation only concerns ffp and not the actual financial situation of the club. Correct me if I'm wrong on that tho
Some clubs are willing to accept the transfer fees paid over multiple years. And there are financing companies that specialize in this kind of loan; any well run club would not have problems paying a modest interest rate here. These are nickel and dime issues, and only a meaningful obstacle if the club is poorly run.
It would make it so much easier to compare if everyone talked about wages per year, so the numbers were more comparable!
Great video and hopefully will shut up the net spend brigade and those obsessed with how much transfer fees a club had spent, good & bad
I wanted the Haalad-Nunez comparison! Haalands wages are massive
I hope more Turkish fans will watch this and learn. They only talk about transfer fee and say Zaha, Icardi, Tadic, Fred, Rebic, Ox are cheap.
What If they including release clause depends who has highest wages?
Release clauses work well in Spanish football. They don't work in English or French football.
Great, you figured out cost. Now you have to figure out value. Then you can figure out what the most valuable signings are by figuring out excess value, which is simply value minus cost.
Didn't the Prem introduce the 5 year maximum rule this summer in terms of the amortisation of transfer fees? So Caicedo would have been about 10m or so more per season than you've stated in the video.
only Uefa dide from whis summer, PL gote money from Chelsea to delay so first start next summer for PL club.
YES!
moving players with very high wages are more harder these days, because why?because no one wants to pay astronomical wages like Mbappe in PSG or Messi in Barcelona
Tifo Football: "Football transfer fees don't matter that much and fans talk about them too much"
Also Tifo Football: "Take Harry Kane's transfer to Bayern, it will be amortized to only £25 Million a year"
Me: "Do you hear yourself right now?!"
Both player transfer fees and wages are ridiculous right now. One is not "good" simply because another is worse. Both are awfully inflated and we all know that long term. This type of spending in Football is unsustainable.
I have been thinking this myself lately. The rising valuations of clubs are helping drive it but can’t go up forever or when the costs go under a microscope.
I also think there is a big competitive advantage to be had in financial terms by running things sustainably as far as wages go without falling victim to big transfer fees and spending on them minimally overall with an eye towards future profit when you do.
Even in sporting terms if you look at a club like United, they would probably do better catching up by growing things more organically and with more patience while building up a positive or less aggressive ffp balance to enable spending when the squad is actually ready to compete or on truly elite players along the way instead of patching holes with expensive duct tape.
If you think about it transfer fees and wages have always been ridiculous as far back as the 90's when most Italian clubs were consistently buying the best German players from the Bundesliga and the best Dutch players from the Eredevisie. Then a massive spike in inflation came in the early 2000's when Florentino Perez won the election over Lorenzo Sanz and activated Luis Figo's 60 million euro release clause from Barcelona which was almost 25 million more than Gabriel Batistuta's move to Roma from Fiorentina who was previously the most expensive transfer in the world at that time. From there the figures only got bigger and bigger and inflation only grew more and more to what it is now and its only going to keep growing even bigger in the future.
Didn't uefa close the loophole about amortised costs exceeding 5 years? In the case of Caicedo, £115 over 5 years is is £23m per year + £8m wages, so a total annual cost of £31m rather than the ~ £21.5 assumed at 04:16.
Chelsea aren't in Europe hence they're able to get away with it . Crazy i know.
How stupid is for a club to think they've found a striker or any position for the next 10 years? How many players perform at a top level for over 4-5 years? You're talking about finding a legend for the club, and when you see transfer have about a 50/50 chance of working out, imagine how low is for that to work out for 2,3,4,5,6 years and so on... it'd be better to gamble at a low cost and high numbers, something seems under it. Maybe making a marketable, even before they have played for the team, just to make noise, instead of how good they are
I have a question on amortization. Is the amortization of the only for the books?
If yes, then clubs do need to have the money to pay upfront, right?
If no, then why do selling clubs accept money over 3 or 5 (even 8) years, instead of wanting it then and there.
Amortization is only for the books. I would guess, payment is done upon agreement between buyer and seller.
@@matemolnar6661 thanks for your response.
So I guess amortization is only to kinda bypass ffp. If it is so, then the point mentioned in the video slightlyyy loses its value. You do have to have 100m (or however the clubs structure the payment) to pay at a time even if the books it is 20m/year for 5years.
@@narutokunn Not exatly. Amortization is not a possibility to choose, it is a mandatory accounting treatment. The longer the contract, the smaller the yearly amortization amount of the transfer fee, which is a "non-cash" transaction in the books and impacts ultimately the profit or loss. FFP regulates, how much loss the clubs are allowed to have, it means the smaller the amortization, the better for the club. And yes indeed, regardless amortization rules, the buyer has to have the necessary liquidity to pay.
@@matemolnar6661 I get it now. Very clearly explained. Thankyou
As an accountant this video gave me a hard one
Yep
What I don't understand with amortisation is are clubs like Brighton receiving the full £115mil for Caicedo in one go or are they receiving it over the 8 years of his contract with Chelsea?
Barca did manage because all new signing players agreed to lower their wage . otherwise if was not possible to have them .
The fact that the phrase "just an extra 30 million pounds" makes sense tells us all we need to know about the transfer market in our time.
Still tho not all the transfers allow clubs to pay these 80-100 million by dividing it for the contract year and paying annually equal amount. Sometimes you need to pay this amount on place. Thats where problems can begin, when yes, amortized payment can show more things yeat in one moment club can be really lacking money