NUFC specific FFP/PSR discussion

[NWMag]

With a disappointing window behind us, does anyone know what our position is looking like post June 2025? 
 

I am assuming we will have more wiggle room but I don’t have a clue about the figures to be honest.

[timeEd32]

10 minutes ago, NWMag said:

With a disappointing window behind us, does anyone know what our position is looking like post June 2025? 
 

I am assuming we will have more wiggle room but I don’t have a clue about the figures to be honest.

We don’t know what the rules will be though likely either what they are now or something more like UEFA’s. There’s some calculations in the OP (see UEFA section), but we also have a lot of expiring contracts in June that give us more options than the last couple seasons.
 

Who gets extensions and what sponsorships we announce in the coming months will be key things to watch. 

[Stifler]

7 minutes ago, timeEd32 said:

We don’t know what the rules will be though likely either what they are now or something more like UEFA’s. There’s some calculations in the OP (see UEFA section), but we also have a lot of expiring contracts in June that give us more options than the last couple seasons.
 

Who gets extensions and what sponsorships we announce in the coming months will be key things to watch. 

This very much. Going into the transfer window after we sold Minteh, and Anderson, we were told that we had to make something like a £15m profit on players this year, however we made a £60m bid for Guehi, so that is £12m more on top of that. We know that we have no players to sell, unless we sold someone like Bruno, Isak, or Gordon, which would then put us a step back regardless.

[Turnbull2000]

https://www.forbes.com/sites/zakgarnerpurkis/2024/08/31/the-rigged-system-stopping-newcastle-united-mounting-a-challenge/

Quote

 

Meanwhile, Chelsea built on a distinctly average campaign last year by spending as lavishly as ever and Manchester United celebrated one of its worst seasons in the past three decades with another $150 million net spend.

 

Had these clubs earned the right to have a better crack at Champions League qualification than Newcastle United and Aston Villa? No, they benefited from being part of an existing hierarchy that has brought in rules that limit the investment of challengers.

 

We are now seeing the full impact of these ‘financial fair play’ regulations: The established order is allowed to underperform and invest heavily while newcomers that dare to outperform them cannot build on their achievements.

 

There’s a way to describe this situation it’s called a rigged system.

 

 

Trying not to feel angry about it all. Aston Villa will probably experience similar soon - the rules that the cartel clubs demanded will yank them off their upward trajectory.

 

 

Edited August 31 by Turnbull2000

[timeEd32]

3 minutes ago, Stifler said:

This very much. Going into the transfer window after we sold Minteh, and Anderson, we were told that we had to make something like a £15m profit on players this year, however we made a £60m bid for Guehi, so that is £12m more on top of that. We know that we have no players to sell, unless we sold someone like Bruno, Isak, or Gordon, which would then put us a step back regardless.

The £15m profit was for 2023/24. We’re allowed a healthy loss this season, but because of previous purchases and wages we entered the financial year using much of that room.

[80]

Sticking this in here for the more hardcore PSR people. 

 

Does anyone know for sure how fee amortisation works? I've heard a couple of assumptions, but nothing really concrete. What I'm asking is is it worked out on a daily basis, or some other way? 

 

In other words - a £50m fee amortised over 5 years, £10m p/a. Does that mean it counts as approx £27k for each day that passes from the moment of purchase? So if you buy that player 3 days before the June deadline, it goes down as approx £80k on that year's PSR?

 

Was wondering just how advantageous having a little money to spend in June is.

 

I've also heard suggestions you can move the weight of a deal around i.e. even though you bought with three days of the PSR window left, you can absorb a full year's worth of amortisation for that current year if you want to use up some slack you have. Is this true?

 

Finally, another question on a similar note: if elements of a fee are conditional, how are the additional sums factored in once they're triggered?

 

Going back to our £50m player, let's say an extra £10m is due if he wins the CL. It happens in year 2 of the 5 year contract, paid at the beginning of year 3. Would that sum amortise over the shortened tail of the contract? I.e. £10m p/a becomes £13.33m for the remaining 3 years of his contract? Or something else?

 

No complaints if no one knows, by the way...

[Zero]

From an accounting POV the amortization should be based on the player’s contract. If the player we bought has his contract beginning at Jul, then the first part of amortization expense should hit Jul, even if we completed the deal at Jun.

 

Whether it’s down to months or days I ain’t sure, there may be special rules under FFP/PSR. Same goes for the conditional cost. If it’s normal business then yes it should be amortised by the remaining length of contract (say 10m extra, 2 years left, then 5m extra amortization per year once the conditions are met)

 

 

Edited September 4 by Zero

[Abacus]

7 hours ago, 80 said:

Sticking this in here for the more hardcore PSR people. 

 

Does anyone know for sure how fee amortisation works? I've heard a couple of assumptions, but nothing really concrete. What I'm asking is is it worked out on a daily basis, or some other way? 

 

In other words - a £50m fee amortised over 5 years, £10m p/a. Does that mean it counts as approx £27k for each day that passes from the moment of purchase? So if you buy that player 3 days before the June deadline, it goes down as approx £80k on that year's PSR?

 

Was wondering just how advantageous having a little money to spend in June is.

 

I've also heard suggestions you can move the weight of a deal around i.e. even though you bought with three days of the PSR window left, you can absorb a full year's worth of amortisation for that current year if you want to use up some slack you have. Is this true?

 

Finally, another question on a similar note: if elements of a fee are conditional, how are the additional sums factored in once they're triggered?

 

Going back to our £50m player, let's say an extra £10m is due if he wins the CL. It happens in year 2 of the 5 year contract, paid at the beginning of year 3. Would that sum amortise over the shortened tail of the contract? I.e. £10m p/a becomes £13.33m for the remaining 3 years of his contract? Or something else?

 

No complaints if no one knows, by the way...

 

Pretty sure Swiss Ramble was asked this exact thing about the granularity of amortisation, and he seemed to think it went by day (none of the accounts state this clearly, but it would make sense). So a player bought on PSR deadline day costs you virtually nothing for that period, as it's just one day's worth you are paying for.

 

I can't quite see how you could shift the weight of a deal around per point 2. But I suppose that you could assuming that's how you had always treated player contracts. I.e., you couldn't take a years worth of amortisation for one player and only 3 days worth in the same period for a different one. That said, I'm not sure the PSR rules are clear enough to make it clear if there's a prescribed treatment either way there as they have somehow created an entire shadow financial system.

 

On the conditional elements, the only way that could work is as you described - i.e. the minute they are triggered (regardless of when they are paid) and then being amortised over the remaining contract length at that point. They are, after all, part of the original sale contract and the conditions would or should be tied to that.

 

I guess the option there would be to treat it like a one-off bonus payment to the selling club and write it off in one go at the point it's triggered. But I can't see that being allowed as it was essentially always part of the original purchase price.

[Keegans Export]

You can't shift the rate of amortisation, aside from contract length/extensions.

 

It's one of the things that got Derby in bother. They basically backloaded the amortisation by arguing that a players value decreased more going into the last year of his contract than going (for example) four years left to three. That's probably fair but it meant they were creating a huge black hole down the line and the EFL banned it. I'm assuming the PL will have done the same.

 

 

Edited September 4 by Keegans Export