By Sean Whetstone
West Ham will make a profit of £20.1m on three players for PSR purposes this summer.
In real terms, supporters could be mistaken that we make a loss overall on two of the three players in question but the Hammers will record a profit in their financial accounts.
Said Benrahma‘s transfer from Brentford was made permanent in Jan 2021 for £20m depreciated over his five-year contract at £4m per year
When West Ham sold Benny to Lyon for £12.2m there was only £6m left in amortisation on West Ham accounts meaning they will register a £6.2m profit.
It was a similar situation for Thilo Kehrer who was purchased from PSG for £10m in August 2022 over a four-year contract which meant £5m of his value was written off on West Ham’s accounts leaving £5m remaining. His £9.3m sale to Monoco will register a £4.3m profit in favor of West Ham for PSR purposes.
Finally, Flynn Downes was purchased from Swansea in July 2022 for £9m on a five-year contract depreciated at £1.8m per year, £3.6m of that transfer fee has been written off leaving £5.4m on the Hammers books meaning that the £15m sale to Southampton will register a £9.6m profit for PSR purposes.
Mind blowing, like a solicitors explanation, all I can say is we bought Zouma, who knees were shot at Chelsea,and now we can’t give him away, 🤞there’s a loophole to get him off the books, we have to cover our backs with some of the deals , surely
Man Utd will make a healthy profit on Wan Bissaka for PSR purposes due to the vast majority of his £50M purchase price having been amortised. (written off)
The £50M value was five years ago, it has reduced substantially year on year since then to below what he is being sold for. A proportion of a players value is written off year by year for accounting purposes.
Transfer accounting is anything but as things first appear.
the thing with AWB is that man utd have to pay 5m to AWB in loyalty payments
so 5m of that 15m transfer is going out on the same day
And if you needed a reason for West Ham signing players to longer contracts than the schedule of payments it is this. Selling a player once all payments have been made results in a profit for PSR purposes.
Chelsea were wanting to put Ormorodion on a seven year contract with an optional extension to eight probably partly for that reason.
Long contracts keep players sale value up as part of buying them is buying out the remaining contract.
The other side of the coin is that you could end up with a player like Zouma but with a long contract period that might be sat out.
PSR is changing things greatly.
That loophole has been closed. Maximum length contract for amortisation purposes is now 5 years
Thanks Sean for this article, it’s interesting to see how the amortisation figures etc work.
All this shows is that PSR/FFP or however you wish to name it is just a load of absolute nonsense.
Like Aaron Wan-Bissaka with Man Utd. They buy him for £50 million, 5 years ago. He’s on roughly £100k per week over those 5 years so that’s roughly £26 million spent on basic wages. We’re buying him for a reported £15-20 million… Man Utd are apparently making around £12 million profit on him.
If I bought something 5 years ago for £75 and sold it today for £20, I’ve lost £55 on the deal. Simple as that. If you can write off a basic loss of over £50 million then why bother with it as a rule? It’s just a dumb loophole that makes the whole thing a joke, really.
This is standard practice with any taxation department, you write off a proportion of an asset and depreciate it over time. Anyone who has owned a business understands this principle, that’s how it works.