No: Arsenal will not spend £200m this summer and amortize it as £50m a year you weirdos

I saw some Arsenal supporters on twitter talking about how Arsenal’s first signing, Sokratis, is only costing Arsenal £5m of the £50m war chest because Arsenal were going to amortize his transfer fee over three years. In this weirdo fantasy world, that leaves Arsenal with £45m more money to amortize!

No.

Well, yes and no.

Yes, Arsenal amortize their transfer fees. No, Arsenal are not spending £200m this summer.

Let me explain this in simple terms. First off, let’s stick with the £50m figure that most people think Arsenal have available. There was some article somewhere that suggested that because Arsenal amortize their transfer fees (on the books) that means that Arsenal could buy a £100m player amortized over 5 years (£20m), a center back at £15m amortized over 3 years (£5m), an £80m player amortized over 4 years (£20m), and a £20m player amortized over 4 years (£5m).

There are a number of problems with this theory.

First, this is actually spending £215m, not £50m. Just because the accountants amortize player depreciation doesn’t mean that you didn’t spend the money.

Second, I don’t think Arsenal have this kind of cash available to spend on players. Sure, some teams will take structured payments (a loan) but a lot of teams want the money up front and so do the players and their agents.

Third, even if Arsenal were able to convince other teams to let them only give them the amortized rate in each of the next three to five years, this is a loan and it’s a loan based on future profits that Arsenal aren’t guaranteed to make. I don’t know how long you’ve been an Arsenal supporter but I’ve been one for nearly 20 years and I can say definitively that this is not how Arsenal have ever done player transfer business. They did take out a loan once before, on the stadium, but the club then went into austerity mode.

Fourth, if all of those other things happened and Arsenal did spend this huge wad of borrowed money, it locks us in to these players for the next three to four years. If we spend all that money now, we won’t be buying new players next season (unless we sell). And if the players we have don’t work out, you have to sell them, hopefully for not much of a loss because even if you amortize their transfer fee you can still lose money if the player’s value drops drastically.

So, as you can see, Arsenal are not going to spend £200m this summer. You weirdos.

I mean, I’d love it if they did but it’s not happening.

Anyway, it must be that time of year when Arsenal supporters become amateur accountants.

We should change the name of this club to Amortization FC.

Qq

67 comments

  1. why dont you allow me to live peacefully in ignorance by thinking that. thanks, a deluded gooner.

  2. What we should really do is give players 10 year deals, then a 100m player would really only cost 10m and we could buy 5 of them and win the league.

    Like magic.

  3. We need patience. Spending big money before we see what Emery can do with the players we have at the moment would be stupid. Fill some gaps, bring in some younger players, but that’s all for now. I know everyone wants the big 50m+ midfield stud, but I’d rather wait and see what he does with Xhaka, AMN, Elneny, Willock et al.

    1. This is where I’ve arrived, too. I’m going to set my expectations for transfers pretty low this summer, not only because it seems we don’t have a lot to spend, but also because we’re a sixth-placed club playing in the Europa League. If you’re in the Europa League and want to attract top shelf players, you have to pay through the nose, and then we’re back full circle to the budget issue.

      Lichtsteiner looks wrapped up. A sensible signing because he’s free, experienced, and offers back-up for a position in which we’ve long needed back-up. Good. Next up, Sokratis, someone that underwhelmed me initially because of reports he had a terrible season at Dortmund, but of course that team as a whole was poor this past season, and there’s a obviously good player in there. By all accounts, he’s a fighter. We need more of those.

      This is where we are. We’ll be looking at different and better coaching to improve our league position rather than big signings, and that’s kind of exciting, actually. I just wish the summer was over already!

      1. My feeling on signing 30+ year old men is that they are actually just a waste of money: they have zero upside, zero re-sell value, and they often don’t play in their last two years, meaning that we are burdened with their salary for the duration of their contracts.

        If we want backup, we should sign 18-25 year olds.

        The Lich and Sokratis are a waste of valuable squad places and salary.

        1. Money, you say. Salary, you say. Re-sell value, you say.

          Accountants FC!

          I think Sokratis will be a starter (in place of Koscielny), so I disagree that he’ll barely play. He’s also 30, which is still within peak for a CB.

          Re: Lichtsteiner. One year contract, on a free, and better cover than any second-choice level 18/19/20-year-old would provide. Makes sense to me. Don’t care about re-sell value.

          1. 30 is just when CB’s start to fall apart, that’s what happened to Per and Koz. Really hope that his history of injuries doesn’t bite us here. Also hope I never see a lineup that features:

            Lich – Mustafi – Sokratis – Monreal.

            The Lich is even older, 34, and he’s been playing in Serie A, which is the slowest league in all of Europe. I can’t wait to watch his doors get blown off while Ozil mills around pretending to play defense.

            In the best case scenario, we don’t play this old man and just pay him to be in the team. In the worst case scenario he starts 20 matches because Bellerin is injured.

            Nothing positive about this signing at all.

            I’d love to be wrong.

        2. Financially Licht and sokratis might not be a investment. For the current outlook of the team though they make a lot of sense Young and even slightly good wont come cheap. Also are they ready to play backup? Does a senior player experience count for nothing? I dont mind these signings as long we also do some of Mavrapanos type signings. One out of 4 success rate with those type of players will more than cover for the losses over time.

        3. Don’t get me wrong. These aren’t transfers that light up the imagination. Overwhelmingly whelmed is where I’m at. But my point is that this is the level of signing we can expect nowadays, so I’m not going to get upset about it.

          I also believe that we are going to sign some 18-24 year-olds.

        4. I’m tempted to agree with thus but am not so sure.

          Take Lichen. Clearly Bellerin is our first choice. When we bought Debuchy, the plan was likely for him to play for a couple of years but Bellerin to be phased in. This didn’t work – a combination of injury, Debuchy’s attitude, and Bellerin being ready. But now what we need is a backup. Do you bring in a youngster to be backup to a youngster (Bellerin)? Either they’re not good enough, which is a waste of space and their development, or they’re good enough to challenge, in which case they’ll cost a buttload. An older player for free on a short-term contract is ideal – provided he’s good enough to cover. That’s the only risk (and the main one from a playing perspective).

          I’m conflicted when it comes to Sokratis. 16m isn’t much, but there are many more risks. Is he Kos’ replacement, or Mustafi’s? If the latter then OK, but it only makes sense if (a) we can sell Mustafi for at least 16m, preferably closer to 30 – still possible; and (b) we’re able to plug the hole that Kos fills anyway, either with a loan or a youngster. If So-crates is Kos’ replacement, then (a) you’re filling a 33 year old crock’s hole with a 30 year old crock (this sounds dirty). So I’m really conflicted on this signing.

          Technically, with Socrates, we have 5 fit CBs – Mustafi, Socrates, Holding, Chambers, Mavropanos. That’s 2 experienced but of questionable quality, 2 established youngsters who are of questionable quality, and 1 youth with potential. Numbers-wise that’s enough, certainly, but underwhelming quality-wise. And when Kos returns, it’s a little bit too much. Unless you’re planning to jettison Kos completely – which is reasonable if you have doubts over his ability to ever come back to the same level….

          I suspect Sokratis will happen and Soyuncu will not. Mustafi will probably go, and Lich will be cover for CB and RB (does he ever play CB?)

          So your CB line-up (ordered by preference) is Sokratis, Chambers, Holding, Monreal*, Lich*, Mavropanos, Kos**

          * Cover for multiple positions
          ** Injured

          The numbers work but, again, underwhelming quality.

          1. Is 23 prime? Agreed it’s not what a will-he-won’t-he age – if he’s not in the first team by 23 then he’s falling behind. But I would say ~27 is when you hope a player will peak.

        5. Mikel Arteta, 29 at the time we got him, worked out rather well, to the point where some of us were clamouring for him to be the Head Coach. Yes, Yossi Benayoun didn’t, really (funny loan, that). Squillachi did not. Silvestre did not. But it’s not cut and dried one way or the other, that players pushing 30 don’t add value.

          Arseblog is reporting that Lichtensteiner is arriving on a one-year contract. Win/win.

          There are good points to both approaches. Ready-made experience, versus youth. Im not going to wait and see what they do, who they get, and how they work out.

          And btw, Tim, what’s with this newfound love of accounting? 😉

          1. I thought Benayoun did ok for us that year, in the limited playing time he was given.

          2. Ditto. I was rather sad to see him not picked up after that year. Those were a pair of beautiful goals at the end of it.

        6. I understand your outlook on the financial value in signing players over 30, furthermore i would agree. But not in this case.

          With Koscielny banjaxed unto the horizon comes to the fore and with Mustafi playing Saint Sinner for large swathes of the season a bit of steady leadership and knowhow wouldn’t go amiss.
          Especially when you factor in the retirement of Per who whilst his absence won’t be noticed on the pitch, off it that’s another experienced leader on the training field.

          Scratch the surface of the aforementioned trio and we find Callum Chambers (23) Rob Holding (22) and last but aged least Konstantinos Mavropanos (20). All three have shown signs of being capable defenders and under Emery’s new regime and i’m guessing the aim will be to to elevate them from capable to consistent players and then the long narrow step up from consistency to key.

          Sokrities will be charged with filling in the leadership of the backline. whilst also being a sounding board for the younger centre backs.

          ‘The Lich’ is a understandable acquisition for similar reasons. Plus with the backup RB alternative being ‘Corporal Jenkinson’ whom runs around the field looking shell shocked for the most part then ‘The Lich’ makes sense. Bellerin ,Liechtensteiner whilst Maitland Niles can shift over there in as emergency.

          Whether both signings work out in the end remains to be seen, but in theory i can understand the logics behind the acquisition of both players.

        7. Its actually worth a lot to have experienced, intelligent adults amongst your squad who can instil the right kind of values. Yes Merts won the WC but he already said nobody wanted to talk to him, the squad balance was all wrong. Wenger was afraid of having these types around because they might stand up to him, and also because they might bully his little angels. The suggestion we are going to sign some grown ups for a change is extremely encouraging. Goodbye Crèche Culture!

          1. Wow.. Wenger didn’t want characters like Mert and before him Arteta around is why he bought them, made them captains, and Per responsible for collecting fines to enforce the rules of discipline, and kept them around till they retired, even offering them jobs as coaches. Right. Makes total sense.

            Mert was talking about the U18 players when he said only one player came up and asked for advice on his own.

          2. What kind of advice is Arteta going to share with young players when he was captain? How to win the Scottish league with rangers? How not to get capped for Spain? Haircare products maybe?

    2. Tim. We have 12 Non HG players in the first team squad right now. The limit is 17, so I think we’re ok on squad spaces.

      Finances are tight, but wage spend isn’t as much. Plus keeping some ‘waste’ is ok because it allows us to increase it further next year.

      Adding experience is a good thing. Especially at CB where I think we really need it (though I have reservations about Sokratis, and how he’ll get along with Mustafi) But even at RB. Bellerin is young, has a long contract with us and is clearly first choice. Which young RB is going to be coming in to challenge him, and how much will this guy cost? Meanwhile Licht will help Bellerin too, is able to slot in, and will give Emery time to evaluate the young RB prospects we have. The 1+1 year contract as Arseblog reports it could be is ideal for us.

      Get back into the CL and then splurge on a proper replacement/investment. Until then, I’m happy with these two and the experience they bring.

      1. I expect him to be on a season long loan in the Championship come August. Not ready for now if at all.

  4. We are notoriously slow to change things so I think the initial approach will be to see if we can get more out of our current crop of players, give the youngsters a year under the new manager to let him evaluate their potential and then take it from there. It makes sense but it requires patience from the fans and Liverpool spending money like it’s burning a hole in their pocket doesn’t help. I would be happy if we are able to make one marquee signing in midfield and improve our points tally by 12 points (that’s only 4 more wins on the road which is very doable). Whether that gets us to 4th place, time will tell but better performance from the team, especially on the road and on the tactical setup will go a long way.

  5. Its going to be a tough summer. When city with 100 points are splashing money others are not going to sit and watch. May be spurs would but their problem is not spending but under achieving with this squad. Like JACK ACTION mentioned above, we need to give time to see what Emery does. Going by the articles about the coach, we will soon have valuable assets of our own. Many wanted AW out or got bored/tired of his team’s feeling a sense of stagnation. We addressed it finally and its time to be excited. Good or bad no one knows but for sure its going to be different. Looking forward for more of analysis than criticism from fellow fans.

  6. You are 100% factually incorrect about the way transfer fees are paid. They are virtually always amortized and that is NOT a loan. Will Arsenal spend 200m? Fat fucking chance. Still, you say absolutely nothing of value here.

    1. Amortization happens on Arsenal’s end.

      Transfer fees are sometimes structured.

      Have a great day!

      1. Charles,

        As a financial controller, and someone with a bit of a grip on finance and accounting.

        Amortisation: Purely ACCOUNTING concept to properly treat large capital expenditures, by expensing it over a period of time.
        Structured payments: Paying a large payment over the course of a long period of time to reduce risk and upfront outlay

        When you refer to the amortisation of a transfer fee, it has no bearing on the actual terms of payment, but is only with regards to the length of the contract. ie. You can pay a player’s GBP30m transfer fee over a 3 structured payments of GBP10m GBP15m and GBP5m. This is NOT amortisation.

        If said player has a 5 year contract, his transfer fee can be amortised GBP6m- GBP6m – GBP6m – GBP6m – GBP6m, assuming straight-line amortisation. So it shows up on the accounting books as such, but not in ACTUAL cash flow, which are two separate matters.

        For the case of Arsenal’s financial risk management, we are probably not in the right place to analyse how many contracts/transfer fees the club can support, structured or not. The problem is that when people like us look at the amortisation row in the Club’s financial statements, we aren’t actually looking at the structured payment terms in the transfer agreement. All we are looking at is accounting gobbledegook, which is undecipherable unless we have the transfer agreements side by side.

        1. just one more point to tie it back to “You are 100% factually incorrect about the way transfer fees are paid. They are virtually always amortized and that is NOT a loan. Will Arsenal spend 200m? Fat fucking chance. Still, you say absolutely nothing of value here.”

          Charles,
          1) You are right that’s not considered a loan. In fact, it’s likely to be a liability on the buying club’s balance sheet as Accounts Payable, just like how Ox’s transfer fee is conversely an Accounts Receivable asset on our balance sheet. A loan is something entirely different. (Bad Timothy)
          2) Virtually always amortized. You used the word amortized wrongly, thus spurring me on to pedantry.

          They are likely structured, but we will never know as transfer agreements are likely very important documents that are a club’s IP as if some competitor or player-seller gets a hold on all their transfer agreements, they can create a very accurate picture on how much they can extract from the buying club.

          3. “100% factually incorrect” So were you. Learn to type nice.

          4. “Will Arsenal spend 200m? Fat fucking chance. ” Doubt so too.

          1. The point i’m making is that the fantasy that Arsenal could spend 150-200m this summer because “we amortize” requires a number of illogical steps. One of them being that the receiving company will want most if not all of their cash up front, so amortization is an accounting thing on OUR end, not the other club’s. Also, structured payments are loans. We literally owe that company the full amount over certain installments. That’s a loan.

  7. Looks like Ramsey has been offered a five-year deal. This would have been a three-year deal in the Wenger era. Change is afoot! Pleased about this, as Ramsey is one of my favorite players at Arsenal…but will he sign it?

    1. Wenger signed Gibbs, Ramsey, Wilshire, Theo etc to long term deals a while back did he not? When the whole @i want to build my team around an english core’ thing hit the papers? did he not hand out 6 year deals to lots of young players then?

    2. I don’t think Ramsey would have been offered less than 4 years under Wenger. He’s 27.

  8. Realistic (in the sense that it’s very doable for us this summer, not in the sense that the rumors are necessarily reliable) rumor that makes the most sense for us and that I currently am most hoping happens:

    This Uruguayan lad from Sampdoria, Lucas Torreira.

    By all accounts:
    –young, with a big upside
    –reasonable 20m release clause
    –started out as an attacking mid, turned into a holding mid who loves to tackle/intercept
    –also a good passer, very comfortable on the ball, and more mobile than Xhaka
    –has been compared to a young Verratti. A bit of a combo of Kante+Cazorla, or (perhaps more realistically), Kante+Arteta
    –could complement Xhaka, but also replace him in certain games (assuming Xhaka very much in Emery’s plans)
    –If Emery goes 4-3-3, a midfield trio of Xhaka, this lad, and Ramsey would be very tasty, and not unlike PSG’s trio of Motta (Xhaka), Verratti (Torreira) and Rabiot (Rambo)
    –if the reports on him are pretty accurate, the only downside (it seems to me) is his small stature, but hey, that never hurt Kante or Makelele (or Verratti or Santi, for that matter)

    Not remotely convinced it’ll happen or that we’re even after him, but more just throwing it out there because he seems exactly the right sort of person we *should* be looking to buy.

    Discuss.

      1. No. Maintain you original stance 😀 AMN can still promise with the arrival of Lucas.

      2. It’s a big year for Ainsley. That’s the space that Im watching with the keenest interest, to see whether the brains trust will go to market here. I’d like to see an end to the Ashley Young experiment, though… a very right-footed, left-sided full-back.

        1. Yeah, I think he makes a pretty handy right back still. but now we’ve got Lichey (anyone got a better nickname for him?).

          1. ‘Money’ ..This could be money wasted as Tim thinks, a scrooge type signing, because he’s great, or just because his name is similar to a country known for its financial services.

            Or we could call him a Light Stoner which is what his name literally translates as.

    1. Spot on PFO. I have been screaming this everywhere in twitter. He would be great in 4-3-3. But initial formation doesn’t matter much going by Emery. Its the collective! Does not have the physical attributes but can offset with intelligent movement and dribbling skill to get out of tight spaces. Attacking and defensive stats look very good. A mix of the good side of Xhaka and Kante. Not very established as some other names but then we dont have a lot of money. Could be a very good purchase for the 20-22M pound release clause price.

  9. the tough thing many don’t appreciate about good cdm’s is that it’s the hardest position to play on the pitch. your ability to play the position well has less to do with talent ie. close control, passing range, strong tackling, etc. and more to do with how you can use the talent you do have to influence the game; good cdm’s are master tactician. no two players do it the same as they all have different strengths. the inability to control tough games all but rules out a player like maitland-niles.

    the reason i’ve ruled out amn is that he doesn’t have the experience to control a tough game. likewise, he doesn’t have the clout where people are likely to take his instructions. xhaka, likewise, hasn’t proven he has the awareness to control a tough game. the top cdm’s are typically not youngsters. you might find one or 2 that are youngish and playing for top teams but that’s a rarity. most cdm’s are going to be at least 25 but most are much closer to 30.

    most cdm’s make a transition to cdm later in their career like ballack and arteta did. the young cdm’s that are playing at top teams are typically partnered in midfield by very experienced midfield partners. when players like busquets was coming up, he had xavi and iniesta partnering him. casemiro, although he’s 26, has had modric and kroos while he developed. arsenal don’t have either senior cdm’s or experienced midfield partners for young prodigies. that’s why it’s difficult to accept many of the proposed cdms that are mentioned.

    does that mean arsenal won’t roll with what one of you’ve suggested? no. they have since cazorla’s been injured but they weren’t a top team. i was talking about top cdm’s for top teams. however, when arsenal played with arteta and later cazorla at cdm, they often looked like they could beat any team in europe on their day. especially with a lack of strategic direction from the management team, that’s no coincidence.

    1. I don’t disagree that experience is a great asset, especially in the defensive spine of one’s team. I just don’t think it’s the end-all-be-all that you take it to be.
      Plus, Xhaka must now be moving into “experienced head” territory now, if he’s ever going to get there.

      1. i’m not implying that experience is the be all and end all but all top cdm’s are MASTER TACTICIANS. to be a MASTER TACTICIAN, you need good instinct, maturity, awareness, and judgement. you can’t acquire those qualities without experience, hence without experience, you can not be a top cdm. in any other position on the field, a lack of experience is forgivable but not cdm.

        there’s a reason why coaches often move experienced players from different positions to cdm. gilberto, ballack, mascherano, arteta, cazorla, moussa dembele, lahm, etc. all moved later in their careers to cdm because they had the aforementioned experience (and leadership) that made them master tacticians. a top cdm is easily worth 15 points a season. the galacticos fell apart when they lost makalele. the invincibles fell apart when they lost gilberto to a back injury. look at chelsea this season after losing matic. top cdms are the cornerstone of any team and to be without one is devastating to any team with championship aspirations.

        in order to be a master at anything, you need experience.

      2. as far as xhaka, he’s at the right age to be showing growth but we’ve all seen him play. there’s nothing about him that says “master tactician” at this time. perhaps he needs big time coaching but it will still take him a while to become a to cdm, if ever. typically, you begin to see those sound judgement qualities by the time a player is his age. the biggest complaint people have about xhaka is his poor judgement.

  10. Lichtsteiner is no 7 on world’s best right backs list, three places ahead of Bellerin, while Socratis Pasta to Populous is a no 10 best CB ,according to Fifa18.

    A ranking my teenage son swears by , so there, Tim is dead wrong about these signings 🙂

    1. Fifa 19 will be released when this season starts. Let us know where they rank then.

  11. There are very few RB/WB/wingers around with the class, stature and experience of Lichtsteiner. He’s a winner. One year deal? Cover for Bellerin? Useful option off the bench? Lovely. He won’t win us the league single-handedly but apart from anything else I’d just enjoy seeing him in the red and white for a few games. In terms of fitness and stamina in his thirties he reminds me of Lothar Matthaus, who at 38 played in the Champs League final and was voted German footballer of the year.

    Sokratis looks like the ideal profile given the other CBs on the roster. Again not a transformative signing, but that’s not what we are looking for.

  12. I doubt anyone in football uses straight line amortisation, purely because of the unusual way that players depreciate over the life of their contract.
    Structured payments obviously are used, you can see this in the accounts of publicly listed clubs that very rarely do business with each other. Obviously though you don’t do structured deals for five years that prevent you from signing any players in the next nine transfer windows (except in fantasy land)!
    If you take Valencia as the best template (interestingly last won La Liga in 2004) then in games against the bottom fourteen Emery seems content with one purely defensive midfielder, a deep lying playmaker and a more mobile midfielder ahead of them, relying on defensive structure to contain counter-attacks. That could even be Elneny or Monreal moved into midfield.
    Against the top five, he seems to prefer two defensive midfielders behind a more advanced playmaker, so I would expect to see a proper ballwinner bought fairly soon, no idea who though.
    I still think that with buy-in from the squad, there’s a pretty good “Emery” team in there. Not Man City good but almost certainly better than the top team in Middlesex.

  13. So Zidane’s left Real. I wonder if they’ll start to revamp that team now. Sell Ronaldo and Benzema? Lewandowski is a strong bet to move there. Bale will get more playing time. And I don’t know what else they could use. Maybe a CB? But they’ll come up with a marquee signing. Hazard?

    And who to manage them? Wenger? Sarri? Conte?

    1. zidane went out making history and on his own terms. how many coaches leave real madrid walking out the door? good for him.

      1. Yeah, Pochettino, despite his new contract is supposed to be the favourite, but I think they’re a bad fit for his pressing style. Instead, they seem purpose built for Wengerball.

  14. Tim.

    Please say that this brilliant blog will continue and that it is only your by the numbers piece on arseblog that you are finishing!!

    This and the guardian are the first websites I look at every morning and I feel I would miss something if this stopped. I think that my avid appreciation of the guardian was reinforced by your website. I also think that your balanced articles push me to look for balance in my reading across all subjects. When I read any opinion pieces i strongly agree with I try to read an opposing opinion for balance. I even occasionally read the sun, when they become difficult to find!!!

    Anyway i digress, I think what I am trying to say is thank you for the time you spend writing. I am grateful for the effort you put into every piece and will miss your contribution to arseblog (which I found through this website).

    Thank you.

    Kind regards,

    Richard

      1. And my days just got better.

        Brilliant blog. And as Richard said “This and the guardian are the first websites I look at every morning and I feel I would miss something if this stopped.”

  15. Tim why have you quit arseblog? It is just arseblog right? You’re still going to keep writing here?

  16. Hey Tim how come you won’t be doing your By The Numbers piece on Arseblog anymore?

  17. I find the Yacine Adli rumour interesting. 17 year old midfielder who made his debut for the first team at PSG in Emery’s last game. Presumably wants some first team action. While the attention has rightly been on AMN, the training ground video of Emery also showed him shaking hands with a now buffed up Zelalem who’s in last chance saloon I would think. Adli looks comfortable on the ball, and I think if we sign him we’ll see him play a few games.

    Xhaka-Ramsey-Elneny as first choice midfield, with AMN, Torreira (e.g.) and Adli as subs? I quite like that I think. Especially because Iwobi and Miki can also play there.

  18. Seems like a lot of people don’t distinguish between Revenue/Cost and Cash flow. Yes, assets can be amortized over time (Cost in the Profit and Loss statements of the companies), but still they need to be paid irrespective of that (Cash flow statement)

    1. And also nobody mentions the other side of amortization: the fact that in the future periods you will continue to incur cost even if you don’t do anything.

      For example, you buy a 100m player on a 5 year contract. You put take as a cost in this year only 1/5 (20m) and put the rest on the Balance Sheet. Great deal! But next year you don’t buy anyone, but still incur 20m cost! Not so great now..

      In more practical terms this mean that the current year is not a clean sheet where we can allow ourselves to spend crazy sums only because we will defer them. The current year also bears pieces of amortized costs from deals previous years.

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