✍️ OFFICIAL Nicolas Pepe (Out)

[Taylor Gang Gunners]

To understand this loan, we need to think in terms of how accounting/FFP works here:

We signed Pepe for a reported 72m, wages of 7m per year for 5 years. The important part here is that the 72m is amortised over the length of the contract - i.e. 14m a year or so.

There’s two years left, so from an accounting and FFP view, we allocate 14m+7m for this season and next.

Let’s look at two scenarios - one where we loan Pepe and another where we sell:

If we loan, we save up to 7m this season.
However, if we sold, Pepe goes off our books, meaning that we cannot book the original transfer fee to next season - say we sold for 10m, we would end up taking an immediate loss of 28m minus 10m = 18 million this year. Given this, a loan is significantly better than a sale for this years finances.

While 7m doesn’t seem like a lot of money, given amortisation again, we can spread the cost of a transfer - 7m this year means that we can buy a player on a 5 year contract up to 7*5=35 million.

Note here this is very different to Auba where we’ve already fully booked his transfer fee, so any savings goes directly to the transfer fund.

Very nicely summarised. Respect.

 

[slam1986]

To understand this loan, we need to think in terms of how accounting/FFP works here:

We signed Pepe for a reported 72m, wages of 7m per year for 5 years. The important part here is that the 72m is amortised over the length of the contract - i.e. 14m a year or so.

There’s two years left, so from an accounting and FFP view, we allocate 14m+7m for this season and next.

Let’s look at two scenarios - one where we loan Pepe and another where we sell:

If we loan, we save up to 7m this season.
However, if we sold, Pepe goes off our books, meaning that we cannot book the original transfer fee to next season - say we sold for 10m, we would end up taking an immediate loss of 28m minus 10m = 18 million this year. Given this, a loan is significantly better than a sale for this years finances.

While 7m doesn’t seem like a lot of money, given amortisation again, we can spread the cost of a transfer - 7m this year means that we can buy a player on a 5 year contract up to 7*5=35 million.

Note here this is very different to Auba where we’ve already fully booked his transfer fee, so any savings goes directly to the transfer fund.

To clarify a bit:

Costs for the 2022-2023 season:
No sale or loan: 14+7=21m
Sale for 10m: 14+14-10=18m
Loan, full wages paid: 14m
Cancel contract with no fee: 14+14=28m

There’s probably more that goes into the sums but this hopefully gives a rough approximation.

 

[Hunta]

To clarify a bit:

Costs for the 2022-2023 season:
No sale or loan: 14+7=21m
Sale for 10m: 14+14-10=18m
Loan, full wages paid: 14m
Cancel contract with no fee: 14+14=28m

There’s probably more that goes into the sums but this hopefully gives a rough approximation.

Cheers, Richard Garlick.

 

[Yousif Arsenal]