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...
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
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.
@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.
@@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.
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
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.
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
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@@SongofIceandTea
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.
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
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).
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
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.
@@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.
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.
@@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 ?
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.
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.
@@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.
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.
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.
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".
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.
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.
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.
People talking about Kane to United also miss the fact that Levy didn't want to sell within the premier league and would have wanted an extra £30M + to do so.
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.
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?
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.
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.
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).
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.
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.
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
One question and please don’t call me naive or ignorant I genuinely want to know this. How come most of these football players in Europe’s contracts aren’t shown to the public? Obviously google exists… but How come in American sports when somebody signs a huge contract we see Lebron James or somebody like Tom Brady’s contract made public? In football we are only aware of the transfer fees never the players wages. Even when Messi played for Barcelona all those years it was a bit surprising to me that he was making a crazy amount of money. Obviously it’s Messi but I wasn’t even aware of his wages. Same as Ronaldo when he went to juventus
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
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.
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.
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.
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.
I do find it funny when fans try and guess what their transfer budget will be in a window. Transfer fees are paid in installments. (Not even talking amortisation). Your club will still be paying for previous transfers and will be paying over years for anyone you buy. There is no such thing as a war chest anymore.
What if Chelsea sells caicedo for 10m next season. What would happen to the initial 100m amortised over the remaining 7.5 years? Does that still count? I don’t understand how Chelsea could sell players for low transfer fees, players that they bought not too long ago at big fees. Without facing any repercussion on FFP.
I imagine that the 10m would be subtracted from the sum remaining to amortize. So it would be something like 88m over 7.5 years that now becomes 78m over 7.5 years. It may not greatly matter over the next 4-5 years, but it could conceivably shackle them in the further future.
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...
Chelsea have run straight through a loophole. The law comes into place next year, so the 7 year deals still work. You can't *ban* amortization - it's a financial concept. UEFA banned deals longer than 5 years, so that deals at ridiculous prices couldn't be amortised to the extent that Chelsea are doing at the moment
Has the world gone crazy, these are accounting points, the clubs still need to pay the 100m to another club - this video is an FFP perspective, transfer fees are still an issue as they can only be paid if clubs generate enough money…
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
@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 🇳🇬
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.
You need to add resale value into the calculation. When ManU buy's Rasmus Højlund they expect to get at least half of the transfer fee back if they sell him again. The same cannot be said about Harry Cane
That's an "if" so it can't be included plus united pay most of their players ridiculous wages so they can't offload them for even half their signed fee
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
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.
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.
@@matemolnar6661 it means if they buy anyone whilst playing in Europe or whilst qualified to play in Europe for that season, they can no longer amortize contracts for more than 5 years. The 5 yr rule applies to clubs featuring in Europe
@@livinusokoz306 and how they have to book an old contract, where the remained useful life of the player contract is still more than 5 years, when qualified back in Europe ?
@@matemolnar6661 it’s all about the season the player was acquired. Are they in Europe or not? When was the contract drawn up and signed? That’s what determines whether it must be 5 yrs amortization or more
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.
I don't think this video is wholly accurate. A player's contract should be amortized not using his contract length, but rather his "expected useful life" or residual value after his contract ends. If I buy a 35-year old and offer him a 20 year contract, it makes no sense to amortize his transfer fee over 20 years.
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.
This all makes sense, but over a few summer windows doesn’t it still affect costs? For example, Chelsea will still be accounting for the cost of caicedo next season and the one after while making new signings. What happens then?
Yes and they will be selling the ones that didn’t work out and buying new ones. That’s why they have young players with very good potential resale value
@@livinusokoz306 This is tenuous. Chelsea bought Madueke for almost €40m. That is to pay a premium for what is a very average footballer. He would have to be astonishing good to provide a profit.
Transfer fees are hugely important, as regular earning people we look at out football teams and see them spending 100 million on a player and we wonder why this much needs to be spent on a singular asset. Its elitism shoved in the faces of the masses. Its ruining football. Its money and its quite frankly disgusting how much is spent on transfers.
America and it's salary capped leagues wave hello! --Not endorsing salary caps, just saying wage math and amortization is well worn part of discussions. The cartel part of most American sports leagues makes trades easier, but it does also make more transparent the wage part of budgets.
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.
Tifo you need to redo your homework. Levi would have never sold kane to Utd for anything less thaN £150m. It s not comparable. He was only allowed to leave this season to a non epl 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
![Cody Johnson - I'm Gonna Love You (with Carrie Underwood) [Official Music Video]](http://i.ytimg.com/vi/yy9PuYMU29g/mqdefault.jpg)
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
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.
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
@@SongofIceandTea 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
Eye opening video. As football fans we definitely focus on transfer fees too much without thinking about the bigger picture
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
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.
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
@@SongofIceandTeadont forget KDB as well, he came as a big signing with a lot of criticism because of his from at Chelsea.
@@SongofIceandTea 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@@SongofIceandTea
@@SS-up5sche was on and off only performed in big games
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
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).
Thank you for putting the wages as per year! It can get really confusing when PL fans talk about wages per week
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
This was discussed on the IRL channel, but as compared to Osimhen
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.
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 ?
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.
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
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.
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.
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".
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.
Very informative and easy to follow video thanks
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
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.
The best way to see how this could work, I recommend people play Football managers
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.
People talking about Kane to United also miss the fact that Levy didn't want to sell within the premier league and would have wanted an extra £30M + to do so.
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.
Soccernomics by Simon Kuper and Stefan Szymanski teaches this very well!
12th place and hearing tifo just explain things and awesome things are very cool for me keep it up tifo!
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
Uli Hoeneß already said that the 100 million were paid in one installment without taking a loan
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.
Easily the best thing I’ve learnt this week..!!
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.
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).
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.
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.
Kane wasn’t available for £100m as he wasn’t available to any English club at all.
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
One question and please don’t call me naive or ignorant I genuinely want to know this. How come most of these football players in Europe’s contracts aren’t shown to the public? Obviously google exists… but How come in American sports when somebody signs a huge contract we see Lebron James or somebody like Tom Brady’s contract made public? In football we are only aware of the transfer fees never the players wages. Even when Messi played for Barcelona all those years it was a bit surprising to me that he was making a crazy amount of money. Obviously it’s Messi but I wasn’t even aware of his wages. Same as Ronaldo when he went to juventus
Caicedo wants amortised by 8.5 years..
The rule change meant we were only allowed to amortise for up to 5 years
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
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.
YES THIS ANNOYS ME ABOUT FOOTBALL FANS SO MUCH THANK YOU FOR TALKING ABOUT THIS
As I support Manchester United I would like to remain ignorant of how high our wage budget is and our lack of player value
Since when we’re transfer fees amortized? They are mostly paid upfront.
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.
You don't need to watch if just want to know the reasoning. Wages + Amortization
I feel like this would be almost entirely self-evident if wages were just generally reported as annual salary values rather than weekly amounts?
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.
cause 90% of clubs in the transfer market spent like 800 million on players and then regain it in the same transfer window
Bring back the podcast
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.
"We paid for the transfer of Harry Kane without taking a loan". 🔴🇩🇪
I do find it funny when fans try and guess what their transfer budget will be in a window. Transfer fees are paid in installments. (Not even talking amortisation). Your club will still be paying for previous transfers and will be paying over years for anyone you buy. There is no such thing as a war chest anymore.
this why i love tifo man
What if Chelsea sells caicedo for 10m next season. What would happen to the initial 100m amortised over the remaining 7.5 years? Does that still count? I don’t understand how Chelsea could sell players for low transfer fees, players that they bought not too long ago at big fees. Without facing any repercussion on FFP.
I imagine that the 10m would be subtracted from the sum remaining to amortize. So it would be something like 88m over 7.5 years that now becomes 78m over 7.5 years. It may not greatly matter over the next 4-5 years, but it could conceivably shackle them in the further future.
They are very well important for smaller clubs.
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...
whoever chooses the music for your videos is a classy cool guy/lady.
Even fact jack grealish costed man city 100m pounds showed not all players live up to the crazy transfer fee
You made a mistake with caicedo there, UEFA banned amortization over more than five years to prevent the extreme to which Chelsea went
Chelsea is not in Europe. So Premier league amortisation still exists
Chelsea have run straight through a loophole. The law comes into place next year, so the 7 year deals still work.
You can't *ban* amortization - it's a financial concept. UEFA banned deals longer than 5 years, so that deals at ridiculous prices couldn't be amortised to the extent that Chelsea are doing at the moment
Has the world gone crazy, these are accounting points, the clubs still need to pay the 100m to another club - this video is an FFP perspective, transfer fees are still an issue as they can only be paid if clubs generate enough money…
great video. And a dose of reality in this bonkers football world. Thanks tifo
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
@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 🇳🇬
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.
Daniel Levy: *intensely sweats*
You need to add resale value into the calculation. When ManU buy's Rasmus Højlund they expect to get at least half of the transfer fee back if they sell him again. The same cannot be said about Harry Cane
That's an "if" so it can't be included plus united pay most of their players ridiculous wages so they can't offload them for even half their signed fee
if bayern were trying to sell kane next summer, then theyll get their money back for sure.
I read somewhere that UEFA/FIFA is closing the amortization bug, i.e., you can't amortize more than 5 years now.
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
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.
Levy weren’t selling to Manchester though.
Does not apply to city of.course barca as well
to think that wages of 100k per week is normal now, thats just outlandish
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.
Great video!
When calculating the Caicedo deal you gotta remember that there’s a limit of 5 years for amortisation now
For those in European competitions. It doesn’t affect Chelsea because they are not involved in any European competitions this season
@@livinusokoz306Does it mean, if Chelsea qualifies to Europe again, they might have serious FFP issues in Europe but not in the Premier League?
@@matemolnar6661 it means if they buy anyone whilst playing in Europe or whilst qualified to play in Europe for that season, they can no longer amortize contracts for more than 5 years. The 5 yr rule applies to clubs featuring in Europe
@@livinusokoz306 and how they have to book an old contract, where the remained useful life of the player contract is still more than 5 years, when qualified back in Europe ?
@@matemolnar6661 it’s all about the season the player was acquired. Are they in Europe or not? When was the contract drawn up and signed? That’s what determines whether it must be 5 yrs amortization or more
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.
I don't think this video is wholly accurate. A player's contract should be amortized not using his contract length, but rather his "expected useful life" or residual value after his contract ends. If I buy a 35-year old and offer him a 20 year contract, it makes no sense to amortize his transfer fee over 20 years.
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.
Good video, way too many people have no idea how all this works while always claiming their rival is violating FFP.
This all makes sense, but over a few summer windows doesn’t it still affect costs? For example, Chelsea will still be accounting for the cost of caicedo next season and the one after while making new signings. What happens then?
The Chelsea model is high risk and premised on them always being able to sell players. However, if buyers dry up, they face financial ruin.
its like buying loads property some will rise some will fall
Yes and they will be selling the ones that didn’t work out and buying new ones. That’s why they have young players with very good potential resale value
@@livinusokoz306 This is tenuous. Chelsea bought Madueke for almost €40m. That is to pay a premium for what is a very average footballer. He would have to be astonishing good to provide a profit.
Transfer fees are hugely important, as regular earning people we look at out football teams and see them spending 100 million on a player and we wonder why this much needs to be spent on a singular asset. Its elitism shoved in the faces of the masses. Its ruining football. Its money and its quite frankly disgusting how much is spent on transfers.
America and it's salary capped leagues wave hello!
--Not endorsing salary caps, just saying wage math and amortization is well worn part of discussions. The cartel part of most American sports leagues makes trades easier, but it does also make more transparent the wage part of budgets.
This one is gonna get so many posts on replies to comparing players who cost similar up front fees
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.
This is so informative for football fans! Thanks!!
As an accountant this video gave me a hard one
Tifo you need to redo your homework. Levi would have never sold kane to Utd for anything less thaN £150m. It s not comparable. He was only allowed to leave this season to a non epl 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
Wow very well explained
Awesome vid. But the comparison of Mendy’s wages annually and the others weekly was bizarre
Great video
Levy would never sell Kane to a PL club
Did the Tifo motion graphics designer lose his fonts folder and ended up having to improvise the whole video with Helvetica?
Best example: FC Barcelona has plenty of money to sign players but can't due to La Liga's wage restrictions.
sure buddy
really?
Bayern won't have a striker problem in 4 years, look at what Mathys Tel is doing at the age of 18 already...
Football manager taught me this stuff