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fxceltic wrote: ↑Sat Aug 23, 2025 7:38 am Obvs if you sell at 3 years for say 60 million, you will book a 42million profit and pay 20% on that in the latter example, so 8.4mill to Southampton.
In the former case you’d pay only 3mill to southampton

Your maths is wild. If we sell him for £60m then we give Southampton £12m. Then the whole deal has cost us £54m and we have a £6m profit.

777Kidnappings wrote: ↑Sat Aug 23, 2025 7:47 am It's not a profit if we buy for 45 and sell for 20. That's a loss.

Not in accounting terms because the value of the asset has depreciated over time and anything booked over that amortised value is considered profit for PSR
In real terms, sure

PoD1878 wrote: ↑Sat Aug 23, 2025 7:52 am Your maths is wild. If we sell him for £60m then we give Southampton £12m. Then the whole deal has cost us £54m and we have a £6m profit.

The deal is reported as 20% of profit, not sale value

If that’s right then we owe Southampton either 20% of the profit over and above the 42 mill paid, or 20% of the profit over the amortised value of the player at time of sale. As I said, I suspect it’s the former and not the latter

Nobody has to believe me, but ChatGPT agrees

Great question — you’ve hit on exactly how PSR (Profit & Sustainability Rules) accounting works in football. Let’s break it down step by step using your example.

⸻

Step 1: The Purchase
• Player bought for £45m on a 5-year deal.
• For accounting purposes, the transfer fee is amortised evenly over the contract length.
• That means £45m ÷ 5 = £9m per year amortisation expense.

⸻

Step 2: After 3 Years
• Amortisation charged so far: 3 × £9m = £27m.
• Net Book Value (NBV) of the player still on the books = £45m – £27m = £18m.

⸻

Step 3: The Sale
• You sell the player for £20m.
• For PSR purposes, you compare the sale price (£20m) with the book value (£18m).

Profit on disposal = £20m – £18m = £2m.

⸻

Conclusion

Yes — under PSR rules, you have made a £2m profit.
Even though in real cash terms you “lost” compared to the original £45m purchase, the accounting treatment means the earlier amortisation has already been recognised as an expense, so the sale at £20m brings in a small accounting profit.

⸻

That is how PSR works but no idea if a sell on % of profit refers to book value or the gross trading cost pre amortisation.

brap2 wrote: ↑Sat Aug 23, 2025 8:29 am That is how PSR works but no idea if a sell on % of profit refers to book value or the gross trading cost pre amortisation.

It can be structured according to the contracting parties wishes provided it doesn’t cause non compliant tax deductions, which in any case Everton would want to avoid

It’s far more likely the buying club are playing both sides, as in the smaller uplift % using the purchase vs sale prices going to Southampton, and then winning on the amortisation on net book value as well

And I say Everton, I mean spurs/ palace

The RS sit and wait for Issak (and still havent sorted it), playing hard ball, we sit and wait (and it worked) flap central

Hopefully every performance of his isn't going to be micro-analysed through a lens of PSR profit.

bigmanbob wrote: ↑Sat Aug 23, 2025 8:39 am The RS sit and wait for Issak (and still havent sorted it), playing hard ball, we sit and wait (and it worked) flap central

It's almost as if the champions aren't quite as desperate as us

dazfrancis wrote: ↑Sat Aug 23, 2025 8:41 am Hopefully every performance of his isn't going to be micro-analysed through a lens of PSR profit.

Doubt it, I was only talking about it in response to someone else’s question about PSR

If anything, the replies to my posts show many people still don’t pay much attention to how PSR even works, which is fair enough, I’m pissed off at myself for knowing about it tbh.

Football is at least 50% professional accounting these days

I've never heard of it being a % profit of the amortised fee.

If we buy for £42m and sell for £62m it's a £20m profit. Forget book value, no one's working off that when doing these deals.

Imagine a world where in 5 years we sell for £90m and his book value is zero... That'd be an £18m fee we'd owe Southampton. No one's agreeing to that.

AjaxAndy wrote: ↑Sat Aug 23, 2025 9:13 am I've never heard of it being a % profit of the amortised fee.

If we buy for £42m and sell for £62m it's a £20m profit. Forget book value, no one's working off that when doing these deals.

Imagine a world where in 5 years we sell for £90m and his book value is zero... That'd be an £18m fee we'd owe Southampton. No one's agreeing to that.

Well I agree with your first point, and made it myself

Whether anyone is agreeing to your latter point, I disagree, if the players value is zero (or near zero) and you can get 90mill, you would be happy to pay 18mill to the prior seller. But I agree this is probably a moot point since the % will almost always be based on purchase price

Please don't kill the joy with endless PSR talk.

dazfrancis wrote: ↑Sat Aug 23, 2025 8:41 am Hopefully every performance of his isn't going to be micro-analysed through a lens of PSR profit.

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