Financial Fair Play

[RoyalBlues 4,050]

Even 'expert' like Cohen confused, what could we do?

[OhForAGreavsie 6,056]

Okay, well that sucks. Despite that at the moment I’m still feeling slightly sceptical about reports saying it was included because by my math it shouldn't have been, guess we’ll have to wait till December 31st when the club has to release a full report on the financial year 13/14 to know for certain. If the Luiz money indeed was there, then it'll be interesting to see what the result for next year will be like because the income from player sales would again be much, much lower with only Lukaku as a noticeable outgoing transfer.

Interestingly, wasn't the Fabregas deal also arranged in June? If it was then perhaps that too could have been included in these figures.

[RoyalBlues 4,050]

Interestingly, wasn't the Fabregas deal also arranged in June? If it was then perhaps that too could have been included in these figures.

if Luiz deal included, no reason Fabregas deal not, so I think we will be fine

[Jype 6,398]

Interestingly, wasn't the Fabregas deal also arranged in June? If it was then perhaps that too could have been included in these figures.

if Luiz deal included, no reason Fabregas deal not, so I think we will be fine

Incoming and outgoing transfers work out differently. When a player gets sold the received transfer fee is, after writing off any remaining book value, counted as a one-off profit but the fee for a bought player is divided equally to the length of the contract.

Basically if both Luiz and Fabregas were included in the 13/14 books, the profit from selling Luiz was around £36m but the cost of Fabregas would only have been a 1 / 60 fraction of the £27m transfer fee and a few weeks worth of his wages, totaling less than £1m.

[RoyalBlues 4,050]

Incoming and outgoing transfers work out differently. When a player gets sold the received transfer fee is, after writing off any remaining book value, counted as a one-off profit but the fee for a bought player is divided equally to the length of the contract.

Basically if both Luiz and Fabregas were included in the 13/14 books, the profit from selling Luiz was around £36m but the cost of Fabregas would only have been a 1 / 60 fraction of the £27m transfer fee and a few weeks worth of his wages, totaling less than £1m.

didn't think that

[OhForAGreavsie 6,056]

Incoming and outgoing transfers work out differently. When a player gets sold the received transfer fee is, after writing off any remaining book value, counted as a one-off profit but the fee for a bought player is divided equally to the length of the contract.

Basically if both Luiz and Fabregas were included in the 13/14 books, the profit from selling Luiz was around £36m but the cost of Fabregas would only have been a 1 / 60 fraction of the £27m transfer fee and a few weeks worth of his wages, totaling less than £1m.

Not sure that the amortisation is calculated on a monthly basis rather than a simple annual one. I'm not sure of any of it really.

[dUMB 189]

Can we send an e-mail to Abramovic and ask him?

[KamikazeBlue 337]

Regarding Luiz sale:

even though the registration happens on 1st July, surety of receving the money makes it possible to account that in the 2013/14 year. That is perfectly right according to accounting standards.Without that we would have recorded a loss for the year.Hence i presume we have included that as well in the accounts.

My two cents

[Fernando 6,585]

New piece from our favorite finance blog:

http://swissramble.blogspot.com/2015/01/chelsea-hey-hey-my-my-into-black.html?m=0

[samzilla 517]

Article on City spreading their losses:

http://www.independent.co.uk/sport/football/premier-league/manchester-city-financial-fair-play-regulations-uefa-approves-of-spreading-losses-9973985.html

[OhForAGreavsie 6,056]

New piece from our favorite finance blog:

http://swissramble.blogspot.com/2015/01/chelsea-hey-hey-my-my-into-black.html?m=0

That piece contains a passage which is potentially misleading: -

"Basically, any investment in a youth academy can be excluded from the FFP break-even calculation, while profits made from player sales are included in the analysis. Furthermore, if the players are loaned, then most of the wages are covered by the loanee clubs."

Read carefully, the passage is accurate, as we'd expect, but read casually, it might be possible to infer that money spent on signing youth players does not count against FFP when in fact it does. Any transfer fees, agents' fees and scouting costs involved in recruiting young players are included in the FFP calculation.

[Fernando 6,585]

That piece contains a passage which is potentially misleading: -

"Basically, any investment in a youth academy can be excluded from the FFP break-even calculation, while profits made from player sales are included in the analysis. Furthermore, if the players are loaned, then most of the wages are covered by the loanee clubs."

Read carefully, the passage is accurate, as we'd expect, but read casually, it might be possible to infer that money spent on signing youth players does not count against FFP when in fact it does. Any transfer fees, agents' fees and scouting costs involved in recruiting young players are included in the FFP calculation.

Good point.

But to me what keeps standing out is this:

However, it's important to note that had Chelsea not sold David Luiz, Juan Mata, Kevin De Bruyne and Jeffrey Bruma, Chelsea would've taken a £47m loss. The club earned £65m in profit from player sales (which is not included in the £319m in turnover, by the way), and for what it's worth, the underlying numbers make that loss look quite a bit less scary, especially through the lens of FFP accounting and UEFA's break-even calculation.

This why it baffles me that people think we can afford Messi....if we didn't sell those players we would barely make it with FFP.

[We Hate Scouse 10,326]

Good point.

But to me what keeps standing out is this:

However, it's important to note that had Chelsea not sold David Luiz, Juan Mata, Kevin De Bruyne and Jeffrey Bruma, Chelsea would've taken a £47m loss. The club earned £65m in profit from player sales (which is not included in the £319m in turnover, by the way), and for what it's worth, the underlying numbers make that loss look quite a bit less scary, especially through the lens of FFP accounting and UEFA's break-even calculation.

This why it baffles me that people think we can afford Messi....if we didn't sell those players we would barely make it with FFP.

And this completely justifies our loan system.

Buy a player - loan them out - sell for profit - meet FFP criteria.

[Atlas Lion 1,223]

Only United and Madrid can afford to purchase Messi. Regardless, Messi won't ever play for another club in Europe

[OhForAGreavsie 6,056]

Good point.

But to me what keeps standing out is this:

However, it's important to note that had Chelsea not sold David Luiz, Juan Mata, Kevin De Bruyne and Jeffrey Bruma, Chelsea would've taken a £47m loss. The club earned £65m in profit from player sales (which is not included in the £319m in turnover, by the way), and for what it's worth, the underlying numbers make that loss look quite a bit less scary, especially through the lens of FFP accounting and UEFA's break-even calculation.

This why it baffles me that people think we can afford Messi....if we didn't sell those players we would barely make it with FFP.

Or even Falcao for that matter.

[Fernando 6,585]

And this completely justifies our loan system.

Buy a player - loan them out - sell for profit - meet FFP criteria.

Yeah but that assumes we are successful every year.

Now it's a good thing to have to push up our numbers, but here is when Commercial and stadium are costing us.

Thankfully to the new sponsorship you have told us about it should help us a bit more.

[Elran 58]

Looking at these numbers makes our transfer policy of 2014 even more phenomenal.

We got what we need, improving our squad massively and making a profit of 18m in the process. A profit that was necessary to comply with FFP, but still we sold players for a very good price (probably more than they were worth) and got players who are all a succes and whose value is increased. I'm not exaggerating when I say it is the most remarkable piece of transfer business I've ever seen by a topclub. I mean by this; getting what you need, selling what you want and for the price you want and this all with the knowledge that you had to sell.

And because of this profit complying with FFP will be considerably easier for the coming years. The loss of 2012/2013 'counts' for the last time this season. While in 2015/2016 (starting per 1 July 2015) and 2016/2017 we can spend more because of the profit this year.

[strong centreback 157]

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