Lautaro Martinez

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Schira - #Inter and #LautaroMartinez reached an agreement to extend the contract until 2024 last January. Deal completed by his former agents. Scheduled in the next days a meeting with his new agent (Camano) to complete the contract extension until 2024 (€5M/year).

They should have got him to sign the new contract before letting Conte go
 

IM21

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They should have got him to sign the new contract before letting Conte go

It not like Lautaro cares. He already said that he doesnt care it conte stays or goes.
 

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According to Sky, Atletico are interested in Lautaro.
 

rockball

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Shouldn't all extensions be till 2025? This means we have to extend all of these again next year.
 

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rockball;[URL="tel:2003082" said:
2003082[/URL]]Shouldn't all extensions be till 2025? This means we have to extend all of these again next year.

Yeah applies to at least Bastoni and Lautaro. We need to start the negotiatons year from now. It's wise for these blossoming players, they know what they are doing. If Lautaro keeps improving and goals scored keeps going up, he can start demanding 7-8m€ per, given the covid situation is better and clubs can start selling tickets again.
 

.h.

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I suspect what we want to do is actually amortise some of these guys as quickly as possible, so in 2-3 years time our amortisation bill is a alot lower. Bear in mind FFP changes are coming, too.

Bastoni should be about 16m on the book, if his contract expires in 3 years we'll amortise 5m next season, so in 12 or 24 months time, a new 4 year contract will take that amortisation to like 2m a season.
 

CafeCordoba

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I don't think that's the case. You can amortize however you want, it doesn't have to be even sum every year. Napoli does it "front loaded", they amortize heavily at the start of the contract so that there isn't much left in the balance sheet in latter part of the contract (so can sell with nice plusvalenza).
 

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I don't think that's the case. You can amortize however you want, it doesn't have to be even sum every year. Napoli does it "front loaded", they amortize heavily at the start of the contract so that there isn't much left in the balance sheet in latter part of the contract (so can sell with nice plusvalenza).

I think you have to select how you amortise and then stick to it. E.g. you cant really justify taking linear amortisation for 10 years then randomly swapping to something more front loaded. I guess you also have to apply it uniformly to all of your players, as well. E.g. you cant amortise a laptop differently to another laptop, the policy is set at corporate level

:)


Also, I'd like some evidence of the Napoli thing. If I look here, for example:


In accordance with paragraphs 97–99 of IAS 38, player’s registration rights would typically be
amortised on a straight-line basis over the rights period, corresponding to the term of the contract
that the club has signed with the player. The original amortisation period might be revisited in case
of an early renewal of the player’s contract.


https://www.pwc.com/gx/en/audit-ser...cal-transactions-in-the-football-industry.pdf




Maybe the use of typical e.g. suggested, rather than 'unless by good exception'

I'm trying to find more detail on IAS 38 but its a bit unclear to me. It looks like it is expected that clubs use linear amortisation, so I'd love to understand Napoli's justification.



I can imagaine certain structures (e.g. shorter contract with automation options for renewal based on appearances, etc), or up front bonus payments, would allow faster amortisation if one decided to front load the books like that, but it'd be well outside the norm. And potentially subject to UEFA scrutiny I suspect.
 

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There's nothing within the FFP handbook that specificity requires straight-line amortization. Probably just a policy election by Napoli, if what Cafe said is true.
 

.h.

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That PwC IFRS for football guide seems to suggest otherwise. Granted it depends on the interpretation of the word typically but the whole point of IFRS is to standardise financial reporting in industries
 

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Cool thanks dude
I'll read it when I get home


I guess key point is that it has to be a systematic basis which probably has implications for our ability to swap across different systems readily
 

ADRossi

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I don't think anyone is advocating us electing a policy change simply to amortize players differently. Cafe just made an interesting point that I wasn't aware of.

I'd argue that amortization isn't as big of an issue as you make it out to be tbh, if we're looking through the lens of finding a new buyer or investorss.

Yes, it's the primary driver because why we have an accounting loss. But unfortunately many financial analysts couldn't care less about accounting (GAAP) net income. They'll value metrics such as EBITDA instead. You know the deal.

So while amortization is an issue, and probably the thing we can most control, the real root issue is our gross margin isn't sufficient when compared to other top clubs.
 

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So the reason I hit on amortisation is because obviously that's how FFP is calculated and I can imagine any future scenario will consider it as well- I can see it even in a salary capped world. I can foresee a world where FFP is even suspended for the last two seasons and the coming one then reinstated in full, resulting in extra amortisation booked next year being helpful longer term


Or maybe I'm just clutching st straws
 

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Okay, so it cannot be changed suddenly, got it.

Then the short-term contracts extensions COULD make sense, but honestly, I really doubt the club is the one demanding only one year extension. The difference is not so big (in terms of how much the annual amortization value would go down with 2 year extension compared to 1 year) but one year is a long time in a contract (20% in 5 year contract). It would buy the club time one full year to find a buyer for a player who starts asking too much money.

For example let's take Lautaro. We extend him from 2023 to 2024. Next summer is 2022, so 2 years from contract end. Basically the same situation we are at now, 2 years from the contract ending in 2023 (currently). And we started these negotiations last year already, in the latter part of 2020. The new contract needs to be ready around year from now, or we go to the season so that after it, there's one year left of the contract in the summer of 2023. And then we are at a difficult spot.

Anyway, I hope he extends soon and we keep him unless someone offers like 90m€ for him, since then I'd pull the plug. We can replace Lautaro even if it would hurt. Lukaku seems to be the center piece of this project too anyway.

edit. I meant short-term contract EXTENSIONS.
 

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Okay, so it cannot be changed suddenly, got it.

Then the short-term contracts COULD make sense, but honestly, I really doubt the club is the one demanding only one year extension. The difference is not so big (in terms of how much the annual amortization value would go down with 2 year extension compared to 1 year) but one year is a long time in a contract (20% in 5 year contract). It would buy the club time one full year to find a buyer for a player who starts asking too much money.

For example let's take Lautaro. We extend him from 2023 to 2024. Next summer is 2022, so 2 years from contract end. Basically the same situation we are at now, 2 years from the contract ending in 2023 (currently). And we started these negotiations last year already, in the latter part of 2020. The new contract needs to be ready around year from now, or we go to the season so that after it, there's one year left of the contract in the summer of 2023. And then we are at a difficult spot.

Anyway, I hope he extends soon and we keep him unless someone offers like 90m€ for him, since then I'd pull the plug. We can replace Lautaro even if it would hurt. Lukaku seems to be the center piece of this project too anyway.

to be clear, I'm just guessing, by my understanding of amortisation policies (e.g. if you read non-football club financiala statements), they declare hte amortisation policy as a statement per type of item (e.g. Furniture is linear over 5 years, etc etc)
 

ADRossi

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Correct, each club has an amortization policy that they establish for their intangible assets (players). Juventus, for instance, uses a straight-line method over the life of the contract which is explicitly called out in the annual financial statements. Napoli could obviously have elected a declining-balance method at some point in the past, which would lead to their players being amoritzed at a faster rate than most clubs.

We paid 25M for Martinez on a five year contract. He's been here for 3 years, meaning his book value is 10M. He's scheduled to be amortized for 5M this fiscal year. If we give him a one year contract extension this summer, his amortization for this upcoming season would fall to 3.3M. This doesn't really do anything for us when you consider we also need to give him a raise to get him to extend his contract. It's net-neutral from a net income standpoint.

It's too bad we're not a publicly traded company. They have to disclose the specifics for each player. For example:

Screenshot-2021-05-30-4-25-58-PM.png
 

.h.

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yeah I'm clutching at straws a little

perhaps its the agreementt between the agent - e.g. we'll accept a lower salary, but only 1 year extension, so in 12 or 24 months time you'll have to re-negotiate again and we can use it to get a better salary. Wouldnt tbe unreasonable to me.
 

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Atletico offers 40-50m for Lautaro lmao.

They bought Joao Felix for...130m :yao: If I were Marotta, I send back 1€ + 1 bag of chips for Koke and see how they response.
 
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