For this exercise im going to Amortize (divide) the players fee over 5 seasons , which would be the required time scale permitted if the player/ club were playing European competition football.
I have used Transfermarkt, as the source of the fee value and converted the Euro value in pounds.
Enzo: Fee - 105m > Amortize 5yr ( divide by 5) = 21m per season:
After this 1st season the club has 4 x 21m payments.
If he were to be sold in the next the club would require 84m to break even, on the amortization responsibility.
He carries a 9 year contract valued at 9.3m per season, total value 83.7m
Caicedo: Fee- 100m> Amortize 5yr ( divide by 5 )= 20m p/s:
After this first season the club has 4 x 20m payments:
If sold in the next window 80m to break even, on the Amortization responsibility;
He carries a 8 yr contract , valued at 7.8m p/s, total value 62.4m
Sterling: Fee- 48m> Amortize 5yr = 9.6m p/s:
3yrs left, the club has 3 x 9.6m payments:
If sold in the next window 28.8m to break even on the amortization responsibility;
He carries a 3yr contract, valued at 17m p/s, total value 51m:
Mudryk: Fee- 60m> Amortize 5yr = 12m, p/s:
4 yrs left, the club has 4 x 12m payments:
if sold in the next window 48m to break even, on the amortization responsibility;
He carries a 8yr contract, valued at 5.2m p/s, total value 41.6m:
Lukaku: Fee- 100m> Amortize 5yr= 20m, p/s:
2 yrs left, the club has 2 x 20m payments
If sold in the next window 40m to break even on the amortization responsibility:
He carries a 2 yr contract, valued at 17m p/s, total value 34m:
W Forfana: Fee- 70m> Amortize 5 yrs= 14m,p/s:
The club has 4 x 14m payments:
If sold in the next window 56m to break even, on the amortization responsibility:
He carries a 7yr contract, valued at 10.5m p/s, total value 73.5m
Cucu: Fee - 55m > Amortize 5yrs = 11m, p/s:
The club has 4 x 11m payments:
I sold in the next window 44m to break even, on the amortization responsibility:
He carries a 6 yr contract, valued at 9.1m p/s, total value 54.6m:
These seven players represent the biggest 5 yr amortization responsibilities and potential difficulties.
They also represent aprx, 50% of the annual amortization fees paid @ 96m .
Each also carrying staggering value long wage contracts.
Imo the club are going to have to hold on to these players for several seasons until it will become viable to sell them, also if the players are sold mid contract there will be a huge issue over the players wages.
If the player wants out, ok he can decide to take the hit on his wages, but if the club want the player out, his wages will reduce the fee the club can sell the player for , risking an increased loss.
It will be interesting to see how the club manage this particular issue?
Chelseas big fee, big contract players
posted on 8/2/24
comment by jesus6662 (U8600)
posted 3 hours, 12 minutes ago
Well if chelsea did indeed impair the value of lukaku in 21/22 as is rumoured, it might be that his carrying value in the accounts is close to zero now...i.e. any transfer sale is largely profit. And obviously would take a big chunk of wages out of the club if we can shift.
For accounts to june 2024, we should already have around £80m ish of player profits from the Mount and Havertz, partly offset by the small loss of aubameyang. We could theoretically take a hit on a couple of failed players e.g. cucurella, which would take the future amortisation/wages costs out of the business if we sell before 30th june.
We then have the above players you mentioned...possibly 60m profit given I think your numbers are a tad inflated...that could be sold in July 2024 so that we get that upside into the following year (assuming we don't need immediately). We also have broja likely to add to the list.
It would also be a huge amount off the wage bill, so salaries would be significantly below a couple of years ago, given these youngsters we've signed are not the highest earners and locked in for 7+ years.
That would be player profits in 2021, 2022, 2023, 2024, 2025...as well as a lower salary cost base....to alleviate the pressures of higher amortisation. The key would be how this is sustained thereafter, and that would be where more emerging academy players or the more recent signings are sold I'd imagine (the latter by which point will have a more sensible carrying value than right now!)
----------------------------------------------------------------------
Absolutely, we could also go on guessing or estimatong the numbers based on the limited access we have to the actual detail which of course ignores other important factors such as commercial deals and other revenues and the impacts they have on the business.
It's what I chose to do and focus on being a supporter. My god daughter is a Fulham fan and an accountant, worked at a club on the South Coast. She grew up loving football, I remember going to Fulham v Lincoln City, div 3, they lost 3 nil and the ground was pretty dire at the time but she loved it. She told me once that working in football makes you see it in a direct light. I told her I know, even though I personally never have but I know that working in football and being responsible for a teams success or failure is not the same as being a fan and I personally have no interest at playing at it either. I leave it to those that can.
posted on 8/2/24
Jesus, well tbh i dont think it is rocket science.
The sales valuations for the surplus players are of course only valuations these players have been expected to return. they are guide.
The over interpretation is ball park, but the figures are not going to be miles out.
Check out swiss ramble , and published returns for the club.
Jesus,
Your statements are very sweeping , similar to mine , but players on 6/ 7/ 8 year wage contract are the reality.
With these players we face similar issues that we had with Lukaku when and if the time comes to sell them.
Can you really see Enzo at Cfc in 6 years ?
Who is going to buy Cucu at 9.1m a season on wages ?
But time will bare out witness. If the squad was now fit for purpose , after the spend and where that spend has put the club in terms of a shrunken economy and ability . the pressures would be different as the squad would not still need ? another 4/6 players in out over the surplus to put it right.
Jf, i actually enjoy the off field aspects of how our club operates as much as the football side.
I worked at Chelsea in the late 70s selling drinks and confectionary from a tray, i used go into the shed with it , i was a kid , everyone said i was mad.
Bates had just bought the club for a pound, the new stand had been built and the mood was dark.
We all enjoy it from differing perspective, i also believe that its not abad thing that a chelsea supporter makes the effort to try to explain what are the ups and downs of what is happening at the club.
posted on 8/2/24
oh yeah, great result for the lads last night
posted on 8/2/24
Finally, the numbers in the article are taken from reliable sources., Sportrac & transfermarkt.
Fees, wages, length of contract
The amortization formula is what it is
No guess work , just very simple calculation.
The opinions are based on our past historic outcomes, data published / available in the clubs accounts.
Like you guys i have been following our clubs historic transfer activities for nearly two decades, but i must admit i have been more intrigued since Boehly - Clearlake took over.
posted on 8/2/24
From my perspective, without doubt the way the club is managed off the field, by the business management is crucial to what will happen to the club on the pitch.
I find simply ignoring it is a bit like seeing half the picture and then being dumb founded when the club hits difficult times.
Also I do not like the way the current ownership have gone about restructuring the club, I dont like the fact that they imo are disrespecting the clubs legacy, suggesting the club was so poorly run, much of the problems they have today are resulting from that.
I understand that there were issues with the club when they bought it, but whatever they have done since has been their own doing.
posted on 8/2/24
comment by ifarka, (B-C- out) (U8182)
posted 32 minutes ago
From my perspective, without doubt the way the club is managed off the field, by the business management is crucial to what will happen to the club on the pitch.
I find simply ignoring it is a bit like seeing half the picture and then being dumb founded when the club hits difficult times.
Also I do not like the way the current ownership have gone about restructuring the club, I dont like the fact that they imo are disrespecting the clubs legacy, suggesting the club was so poorly run, much of the problems they have today are resulting from that.
I understand that there were issues with the club when they bought it, but whatever they have done since has been their own doing.
----------------------------------------------------------------------
I don't ignore it. I choose to put it to oneside, I'm a firm believer I circumstances led of influence, if i don't think.
I can something about any given subject then what's the point I worrying about it. I've worked with accountants I'm business and over the years learned no matter what I think I know, they no more. It's interesting and complicated and some very much got the accountant image, one was my boss for a while another I bought into a team to help us out, both were West stand season ticket holders. My city supporting mate you couldn't get more accountant like.
posted on 8/2/24
JF,
Yeah , I get, i assume you can appreciate my perspective, I believe it is part and parcel of the daily life of the club
posted on 8/2/24
I find these days as I get older (61) that things like this don't tend to trouble me now
Chelsea has been my football life along with Pompey since about 1975...things change
Pompey won the FA Cup & got in the Prem...never thought i'd see that
Chelsea in the last almost 30 years have won (barring the Conference League) absolutely everything these is to win at club level
If I think back to the very early 80's my first time at the Bridge Fratton Park five years prior...these things were pipe dreams
Football will be football...money will eventually eat the game whole one day...
posted on 8/2/24
Yes, this is it.
Today firstly CFC is a brand, secondly it is a financial activity / vehicle for the investment bankers/ venture capitalist to find more ways than you or i can imagine to move money through legally whilst being guaranteed a return.
The funny thing is these guys have seriously fckd up in their first 20 months, but they will get over it, play a long game.
They have committed to investing a further 1.750 bln to build the stadium and squad.
All loaded on the club in the form of debt, from which i assume a lender related to them will charge a healthy interest rate.
And thats just for starters
posted on 8/2/24
comment by ifarka, (B-C- out) (U8182)
posted 10 minutes ago
Yes, this is it.
Today firstly CFC is a brand, secondly it is a financial activity / vehicle for the investment bankers/ venture capitalist to find more ways than you or i can imagine to move money through legally whilst being guaranteed a return.
The funny thing is these guys have seriously fckd up in their first 20 months, but they will get over it, play a long game.
They have committed to investing a further 1.750 bln to build the stadium and squad.
All loaded on the club in the form of debt, from which i assume a lender related to them will charge a healthy interest rate.
And thats just for starters
----------------------------------------------------------------------
This is why I don't worry about it so much, the club value in the sale was 2.somethimg billion. There was a commitment to invest 1b over the next ten years in the including building a new ground. The debt owed to Roman was paid off too even though he was never going g yo see it which resulted in the new Consortium paying over 4b for the club tha was worth less than 3b. Put aside the fact that no single person or government should see any part of the fee except for tax I guess and that it currently sits in some trust fund until the government decides hos to get it to the right people, the only debt we could have right now is based on the usual insurance and outs and with the amortisation, revenues and commercial deals, is it really that great. I doubt anyone here could give e us an actual figure. We can of course all guess or estimate but really have no idea. The data required would never be public, for any company. Only those responsible for regulating the business would be privy to that and it would not be legal to leak or discuss such information.