Football amortisation: Chelsea’s large Luiz profit
How Purchasing Clubs Account for their Spending
Although PSG have agreed to spending restrictions due their FFP settlement agreement with UEFA, they are permitted to invest in their squad under the terms of the agreement. Of more concern to PSG will be their 14-15 wage freeze restriction. If Luiz is on large wages, they will need to reduce their wage bill. Reduction will be possible with out of contract or contracted players leaving the club.
A transfer occurring in the 2013-14 season (depending on PSG’s accounting year end) will have an impact on a club trying to break-even in subsequent seasons. As noted above, PSG will amortise Luiz’s transfer fee over the length of his contract. If we assume a 5 year contract, PSG will have four further €10m amortisation charges in their 14-15, 15-16, 16-17 and 17-18 accounts. All of those amortization costs will have FFP significance.
Continue reading this article...
Already a member? Sign in
Get access to all of the expert analysis and commentary at LawInSport including articles, webinars, conference videos and podcast transcripts. Find out more here.
- Tags: Amortisation | FIFA | Financial Fair Play | Governance | Player Transfers | Regulation | United Kingdom (UK)
- UEFA’s new Financial Fair Play settlement provisions
- The football law basics: Making sense of football phrases
- Financial Fair Play in Football with Daniel Geey and Trevor Birch - Episode 20
- Your guide to FIFA's Transfer Matching System
Daniel is a Partner in the Sport Group.
Daniel’s practice focuses on helping clients in the sports sector, including rights holders, leagues, governing bodies, clubs, agencies, athletes, sports technology companies, broadcasters and financial institutions.