Live Bar, August 22 News Chelsea left-back Hall joined Newcastle on loan, with mandatory buyout terms attached to the transaction. According to the previous Romano news, the total price of this transaction can reach 35 million pounds. The Athletic interprets The FFP operations involved in this transaction.
How is the FFP in Newcastle? First, quickly review the actual working principle of FFP. The Premier League allows a loss of 0.105 billion pounds before tax within three years. Under the threat of demotion, the cost of Newcastle’s first transfer window after the new boss took office far exceeded expectations. Although these decisions are completely reasonable. After all, the club avoided the downgrade, but these expenditures still affect today’s transactions.
In this period of time, Chelsea’s spending far exceeds Newcastle. For example, since the new club took over Chelsea last year, Chelsea has spent 0.9 billion pounds, of which 0.3 billion pounds were spent on midfield players in 2023 alone. The west London club believes that due to Amortization, they are within the guidelines, which means that the FFP impact of transfer will be dispersed during the contract period. The initial practice was to sign an eight-year contract, but the new regulations introduced by UEFA before the transfer window this summer mean that Amortization can only be done within five years at most. At present, Chelsea is much larger in business than Newcastle, and FFP is a measure of profitability rather than net expenditure, so Chelsea can spend more money.
Newcastle is actively trying to increase their income, including the controversial decision to allow Saudi Arabia to compete in St James Park in September this year. Newcastle has spent about 0.38 billion pounds since Saudi acquisition, but it is not close to realizing their commercial potential. Obviously, why the 0.105 billion pound limit has become the focus. That is to say, the senior officials of the club have seen the example of Manchester City, violating more than 100 FFP rules in 9 years, and know that the league does not trust their ownership, newcastle is determined to establish sustainable development in the rule book.
However, an important detail of FFP is that the transfer fee of players is fully recorded in the same fiscal year they receive (minus any remaining amortization costs), this means that they have played a huge role in balancing accounts. Newcastle may not have sold many players after the new club took over, but this summer they earned about 48 million pounds from Chris-wood and St. Mark Siman.
The actual calculation is much more complicated than this, but considering the amortization of Newcastle’s 0.38 billion pounds in five years, the two figures become more comparable. For example, the sale of wood and St. Mark Siman provided funds for the final signing of Barnes and Livramento. It is also worth emphasizing that wages often play a more important role than transfer fees.
For example, if club A signs A player for 50 million pounds and gives him A 5-year contract with A weekly salary of 100000 pounds, however, club B signed a player by free transfer and agreed to give him a weekly salary of about 400000 pounds, so club B’s player Amortization weekly salary is relatively higher.
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