It’s not who each clubs buys, it is who leaves and for how much

 

 

 

• A Revolution at Arsenal? Certainly, but at what cost?
• Arsenal’s squad and the two clubs with the most valuable players in the Premier League

By Tony Attwood

Financial fair play rules have two important points that are affecting almost all clubs. One is that clubs can only spend 90% of their revenue on squad costs this season.  (From 2025-26 that will be reduced to 70%.)

The other is that the cost of buying a player can be spread over the length of the player’s contract.  So if a player is bought for £100m and given a five year contract, the club is deemed to have spent £20m a year on the player for the next five years.

Thus players who were perhaps bought three years ago, and are now languishing in the squad and hardly playing, or are injured, or have already been transferred elsewhere, are still being paid for when it comes to FFP calculations.

So David Raya cost £27m. Assuming he has a five-year contract, that means Arsenal have already spent £5.4m not just this year but also next year and each year until 2029.

To balance against that the club has to be earning £7.02m a year (which is to say £5.4m is 70% of 7.02m).

Obviously there is a team of accountants watching these figures, but when we hear of Arsenal wanting to buy this or that player they are not just thinking “do we have the money to pay for this guy and his salary?” (because they can always borrow it) but how will it affect our ability to buy other players within the new regulations?

In short Arsenal need to earn more.

This in turn puts the emphasis on selling players for a good price. The club can’t do anything about players that have been bought in the past because their cost is now embedded in the system for the length of their contract – so they have to focus on selling players – and this is now as big as the buying.

In the past a player could be left to rot on the bench, leaving him and his agent the job of finding a new club.  But now clubs more than ever want money coming in to balance the money they are already committed to as a result of FFP, and the rule about paying over the length of the contract. 

Incidentally, those contracts can only last a maximum of five years in FFP terms.   Cheslea tried to get over the rule by putting players on 8 year contracts. The league then changed the rule – no matter what the length of the contract the player’s cost is paid down in accounting terms over five years. 

However, Chelsea may have another trick up their sleeve as they are still dishing out eight-year contracts – presumably in order to persuade a player to join them and know he is secure.  But in a real sense, this is mortgaging Chelsea’s future and banking on being able to sell the player in six years time without it affecting their FFP calculations – thus making the money all profit against that year’s trading.

What this means is that although the manager and his team are out there identifying who can be bought, there is now a second team working just as hard in trying to sell players who are deemed no longer of use to the club.   But although these players will bring in money the club will still be paying for the player in terms of the bookkeeping.  

So in recent times – at least until about 18 months ago, clubs focussed on buying.   Then the rules about finances were changed and now clubs have to balance the books – which means as much focus on selling for a profit as on the buying.

Manchester United are facing this issue as they attempt to introduce a new transfer policy of selling players now; something which is now inhibiting purchases. The one great difference this time is that United are so close to Profit and Sustainability Rules limits due to previous excess they simply must sell.

That is maybe for the better in the long-term, but it does create short-term issues.  Virtually all interested clubs have turned up their noses at the fees Man United demand because they know that if United can’t sell they will have to reduce the price, to avoid an FFP penalty.

So there is a problem. McTominay is liked by Man U and vice versa, and as a home grown player he is extra valuable.  But they want a premium price for him, not because he is worth it, but because they must balance the FFP books.  And no one else particularly wants to help them out.  After all, why should they?

So we see the new world.  A player wants to leave.  The club wants to sell.  Another club wants to buy.   But the selling club must have a big big big price, not because they have no other way of meeting the FFP requirements, and the rest of the league is happy to watch the selling club struggle..

It is indeed a funny ol’ game..