Why taking a financial hit on players is folly

Why Taking a Financial Hit on Players is Folly

Transfer Talk

I suspect 99% of fans don't know how transfer fees work and therefore why we try not to lose money on players. many a fan asks us to take a hit without have inga clue about the consequences of such a policy.

Let's have a look at transfers then.

An agreed fee is not deposited in the selling clubs bank account in one lump sum and I am talking the main element of the fee, not the additional add-ons.

The fee is 99% of the time paid by the buying club over the term of the player's contract. Thus a player bought and given a five-year contract will have his transfer fee paid over 5 years in equal installments.

Yes there are transfer arranged where a fee is paid sooner, over 3 years say as Shaquiri was by Inter Milan to Bayern Munich, although they got shot of him after a year thanks to his attitude.

Whether you see a player or not the installment is still payable, unless you have bought a player for X amount per season for as long as he remains with you as has been suggested for the Sissoko transfer.

if a player signs a new contract it has no bearing on the original transfer installment plan agreed to buy the player in the first place.

Total up all your installments you have to pay each season and that is your transfer expenditure. Obviously this is going to be different each year, as you add more installments in from new purchases and some are removed when the payments are finished.

Transfer income works in the same way.

Subtract one against the other and you either have a positive or negative figure. If you have a negative figure, in other words, if you are paying out more than you are getting in, then your transfer budget is reduced in future windows. There is less money available for installments for you.

Clubs will have an additional amount they can spend, but an eye always has to be kept on this expenditure and income installments calculation.


Now, if you take a hit on one player, that will affect your installment figures, if you take a hit on several players in one window, you are having a serious effect on these figures and putting yourself deeply in a negative situation.

That means that in future windows you are going to have a smaller transfer budget unless you find the money from somewhere else.

I hope that helps explain why we try to maximise the income from player sales.

COYS

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