Fantastic article explaining the....

comment by jlou1978 (U15376)
posted 7 minutes ago
Didn't Chelsea do something similar, to come up with a figure that said they were in profit of a a million quid a few years ago ?

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UEFA come up with the figures not Chelsea. It's for all clubs not just Chelsea

Can someone clear up a few questions I have in regards to amortisation and FFP?

What happens it he bombs spectacularly, and he is sold in, say, 2.5 years time for something around £5m? How does amortisation work then? Obviously his wages will be off the accounts, but as you signed him over 5+ years, will the remaining amortised fee still go on club accounts for 3 years, or is it scrubbed totally? If it is removed would the total fee amortisation (for his time at the club) be adjusted up (so £20.8m over 2.5 years) changing the previous 2.5 years accounts and would that potentially make you fall foul of FFP? (not just Chelsea, but all clubs that this is relevant too).

Well the 50 million loss was in part due to youth improvments which dont count towards FFP. Last years figures were also in part due to our poorest CL run ever. There is also more TV money than ever coming in next year and we have tens of millions worth of talent out on loan across the world.

Roman was part of the group which drafted the rules, we will be fine in meeting them.

When the numbers are broken down like this, it becomes clear that (re)signing Matic was an extraordinarily good piece of business..

good PR to cover up bad business. How does paying 21m for a player that cost you 7m 3yrs ago represent good business!

Cor this is really getting to Arsenal and Spurs fans. Not just on here! I read the other day, that £32m of the £50m reported loss will be wiped as it was ploughed into our youth development and facilities.

I repeat. £32m will not count towards our losses. Another factor is that we did not qualify for the knockout phase of the CL. That will not happen again.

It's very simple, if we buy a player for 25m over 5 years and at the same time sell a player for 25m and rec payment in full then in that year of trading the club will show a profit of 20m...

However, i don't agree with article that it represents good business.................selling a player for 4m and buying him back for 21m is a loss however you look at it

UEFA come up with the figures not Chelsea. It's for all clubs not just Chelsea
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No they didn't.
Chelsea published their own operating figures in 2012.
Think the figures they came up with had something to do with your owner overnight turning £166.6 million of loans into equity, and the huge transfer fees you paid out that year were not being taken fully into account, then being amortised to then conjure up a figure that made it look like you were in profit, when you quite clearly were not for that 12 month period.

you might just comply with FFP but to do that you'll have to stop spending as much and cut your wage bill, in which case FFP would have worked anyway. and since your success was based on spending loads of money and paying silly wages, it's all good for us.

Think the figures they came up with had something to do with your owner overnight turning £166.6 million of loans into equity, and the huge transfer fees you paid out that year were not being taken fully into account, then being amortised to then conjure up a figure that made it look like you were in profit, when you quite clearly were not for that 12 month period.
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The debt to equity conversion has no impact on profit...

Odd!