Player transfers – 7amkickoff

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.