Arsenal are on the verge of agreeing the €30million deal of Lucas Torreira to Sampdoria. Most reports indicate that the deal is agreed between the clubs and the players representatives have agreed a contract in the region of €3million a year on a 5 year deal.
That means the total cost of the Torreira deal is €45million.
Due to the amortisation of the transfer fee over his 5 year contract, his transfer fee will increase club expenditure by €6million a year. Add this to his wages and the yearly increase in our accounts is €9million.
So how is he set to cost us nothing?
Let’s start with a quick conversion so that we do not have to deal in Euro’s (Brexit means Brexit). In pound sterling, the Torreira deal will cost £7.8m a year.
This summer, Arsenal have lost both Santi Cazorla and Jack Wilshere on a free transfer. The lack of fee for both is a frustration, but in terms of the accounts, they have no transfer fee being amortised.
According to Total Sportek, both Wilshere and Cazorla were on around £90,000 per week each. This works out at a combined £180,000 a week. You multiply this by 52 (how many weeks in a year) and it gives you £9.36million.
So having Wilshere and Cazorla on our books costs £1.56million a year more than the annual salary and amortised transfer fee of Lucas Torreira.
So it is not even costing the club nothing. Having Torreira instead of Wilshere and Cazorla actually saves the club money.
But we now have 1 player instead of two you complain.
That would be a valid argument if Santi Cazorla had played a game last year.
The Spaniard failed to make an appearance last season, and made just 8 league appearances before that. In 2016/17 it was just 15 league games. So 23 league appearances in 3 seasons.
In that same time, Wilshere has made just 13 league starts for Arsenal – 12 last season and 1 2 seasons prior with a loan spell at Bournemouth sandwiched in between. In fact, Wilshere has started just 22 games in the last 4 seasons at Arsenal.
So in Lucas Torreira, we are getting a player who has played in 71 Seira A games in the last 2 seasons. That is just 5 games missed. We are getting a player who will contribute more than the two departing players, for £1.56million less.
Of course, there are a couple of other factors to be considered, agents fees and signing on fees, but that would have bee the same with Jack Wilshere anyway.
How this majorly affects the club is that is free’s up a lot of money for further transfer.
In our last accounts, we showed a profit of nearly £50m. This means that we could have spent an additional £50m on amortised transfer fees, wages, etc and still be a well run football business.
By offsetting the costs of Torreira against the departing Cazorla and Wilshere, the result, as seen is, no change in Arsenal. That means that the surplus we currently have between revenue and expenditure remains the same. Therefore our budget is unaffected and Torreira costs us nothing.
That in turn leaves us more money in the pot to push forward for more players.
By my bag-of-a-fag-packet maths, bringing in Bernd Leno, Sokratis and Stephan Lichtsteiner have increased our yearly costs be ~£20-25m a year. That leaves us about £20m in the pot
We are heavily linked with Ever Banega. He would add further depth to the midfield and ensure we are well stocked in the middle of the park.
At 29 I imagine it would be a 3 year deal he is offered. This would cost us around £10m in wages and amortised transfer fee.
The remaining £10m could be spent on an attacking midfielder. Someone for £30m on a 5-year-£100k a week deal would cost us £11m.
Losing Wilshere and Carola and gaining Torreira free’s up the extra money within the budget to move for a 5th and 6th signing.
Some great things are happening at Arsenal.
Keenos
Follow @KeenosAFC
She Wore A Yellow Ribbon 
Impressive financial assessment, could you enlighten the rest of us what amortisation means? and IMO we need a winger, and one more centre back.
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Say you buy a player for £50m on a 5 year deal. Within the club accounts you can spread that £5 over the length of the deal. So it only actually increases yearly costs by £10m a year
When you buy a player, you increase your yearly expenditure. So buying a £50m player on 100k a week only increases the yearly expenditure by £15m
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Ah, found your explanation, great stuff!!
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What rubbish. The whole Arsenal philosophy for years and one that seems to give Kroenke and you lot an orgasm is ‘Cheap, Cheap’, the cheapskate Budgie.
Even though the coffers are full and the money is there in liquid assets, real money, we are the ‘cheap, cheapskates’ of modern football. This is the path of winning nothing. Pathetic. Truth is Man City and Liverpool are leaving us behind, because you, Kroenke, and Gazidis celebrate being cheapskates. Our beloved club is being used by Kroenke. Study his American plans and commitments to understand why he won’t spend Arsenals profits. We need to buy the BEST or we will do nothing and win nothing.
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Every club operates like this. Amortising transfer fees. As for “Liverpool leaving Arsenal behind” they have won 1 League Cup in 10 years and have finished 6th and 8th in the last 4 – and not higher than 4th.
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It’s nothing to do with being cheap, it to do with doing good business.
If by counting the money saved of two players salaries who haven’t played more than 15% of games over the past 3 years against a world class player who has played 95% over past few years means we save money then it’s a no brainer.
And calling us cheapskates after we have spanked more than £150m in 2 years on players is insane.
Now that Wenger has left, let’s hold our criticism of the club and board for another 12 months and hen see.
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Why are you taking your venom out on keenos? Poor man was only educating us ignoramuses. Go speak to the Kroenkes, buddy!
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Players Released / Sold
Name Zone Contract St Date Contract End Date Contract Length Transf Fees Amortization Wages/wk Wages/an Budget Impact Sales Fees
David Ospina Goalkeeper 1-Jul-14 30-Jun-19 5.00 £50,00,000.00 £10,00,000.00 £1,00,000.00 £52,00,000.00 62,00,000.00 £50,00,000.00
Per Mertesacker Defender 1-Jul-12 30-Jun-18 6.00 £1,00,00,000.00 £16,66,666.67 £1,00,000.00 £52,00,000.00 68,66,666.67 £-
Carl Jenkinson Defender 1-Jul-16 30-Jun-20 4.00 £2,50,000.00 £62,500.00 £50,000.00 £26,00,000.00 26,62,500.00 £20,00,000.00
Santi Cazorla Midfielder 1-Jul-13 30-Jun-18 5.00 £1,20,00,000.00 £24,00,000.00 £1,20,000.00 £62,40,000.00 86,40,000.00 £-
Jack Wilshere Midfielder 1-Jul-08 30-Jun-18 10.00 £- £- £1,10,000.00 £57,20,000.00 57,20,000.00 £-
Danny Welbeck Forward 1-Jul-14 30-Jun-19 5.00 £1,60,00,000.00 £32,00,000.00 £1,50,000.00 £78,00,000.00 1,10,00,000.00 £1,00,00,000.00
Chuba Akpom Forward 1-Jul-08 30-Jun-20 12.01 £- £- £30,000.00 £15,60,000.00 15,60,000.00 £20,00,000.00
Joel Campbell Forward 1-Jul-14 30-Jun-19 5.00 £20,00,000.00 £4,00,000.00 £80,000.00 £41,60,000.00 45,60,000.00 £50,00,000.00
TOTAL £87,29,166.67 £7,40,000.00 £3,84,80,000.00 4,72,09,166.67 £2,40,00,000.00
Players Added
Name Zone Contract St Date Contract End Date Contract Length Transf Fees Amortization Wages/wk Wages/an Budget Impact
Bernd Leno Goalkeeper 1-Jul-18 30-Jun-23 5.00 £2,00,00,000.00 £40,00,000.00 £1,00,000.00 £52,00,000.00 92,00,000.00
Stephen Lichsteiner Defender 1-Jul-18 30-Jun-20 2.00 £- £- £75,000.00 £39,00,000.00 39,00,000.00
Sokratis P Defender 1-Jul-18 30-Jun-21 3.00 £1,50,00,000.00 £50,00,000.00 £1,10,000.00 £57,20,000.00 1,07,20,000.00
Lucas Torreira Midfielder 1-Jul-18 30-Jun-23 5.00 £2,60,00,000.00 £52,00,000.00 £1,00,000.00 £52,00,000.00 1,04,00,000.00
Aaron Ramsey Midfielder 1-Jul-18 30-Jun-22 4.00 £- £- £2,00,000.00 £1,04,00,000.00 1,04,00,000.00
Ainsley M Niles Midfielder 1-Jul-18 30-Jun-23 5.00 £- £- £80,000.00 £41,60,000.00 41,60,000.00
5 Young Players Forward 1-Jul-18 30-Jun-23 5.00 £1,00,00,000.00 £20,00,000.00 £3,00,000.00 £1,56,00,000.00 1,76,00,000.00
TOTAL £7,10,00,000.00 £1,62,00,000.00 £9,65,000.00 £5,01,80,000.00 6,63,80,000.00
-1,91,70,833.33
Some back of the envelope calculation
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Great analysis on our finances and signings. Can’t wait for the season to start.
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I have always stated that i is a matter of how the fee is paid in full,No one club pays the entire transfer fee in one go, it wouldnt make sense for the selling club because there are interest to be had over a 3 to 5 year period,people think that Arsenal will have to pay the entire sum in one go put only if the selling club asks for it and noone ever does.
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Amortisation of the value of players is a purely an accounting term to determine the balance sheet value of the fixed assets (i.e. players’ contracts). Your amortisation calculations would assist in determine the accounting value of the club – but I am sorry to say that it has little influence on the cost of the player. No matter how you try to slice it up the cost of the player is 10m per year over a 3 year period.
Arsenal’s spending is not determined by the book value of the players’ contracts but rather the available cash and FFP rules on affordability. Like everyone else in the world you can not spend money that you don’t have – unless you borrow against other assets (such as future revenue) which is not something that Arsenal tends to do.
What is useful about the proposed deal is that (if the reports are correct) Arsenal have spread the payment over a 3 year period – meaning that the budget for the summer ’18 window (of 70m) is only being reduced by 10m by this purchase.
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Buying Lucas and banega in place of wilshere and carzola is actually a good deal to arsenal, because wilshere and carzola contributed less to the team due to injury in some years back, if arsenal can get a player that is consistence, and pay as low as 2.8- 3.0m pounce, is a good one.
Lastly arsenal should try and secured the services of Gotze and cagler it will boost both the defence and attacking force!
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