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For Academy players, there would be no purchase price, but there may be agent fees. As a result, their book value will be negligible compared to a bought-in player, so if sold for the same price, there's be a higher profit on sale.
However, the equation isn't as simple as all the "financial experts" in the press make out. If you keep a player with considerable book value, then you will still write off part of that value in the year (and subsequent years) so whilst selling an Academy player gives you a better result in year one, you're just kicking the can down the road as you'll still book the same costs overall over the next couple of years.
And under the UEFA squad cost rules, the impact is actually reversed as you only get to take 1/3 of the benefit of the higher profit
on sale in year one as profits on sale are averaged over three years. So under UEFA's rules (to be adopted by the PL shortly) you'd be better off in the short term keeping the academy player and selling the guy you bought in. The academy product will probably be on lower wages too because he likely loves the club so won't have negotiated as hard on pay.
But the experts in the press don't understand this.
Cost plus levies and agent fees, written off over the life of the contract. Wages just go straight to the profit and loss account when due.
For Academy players, there would be no purchase price, but there may be agent fees. As a result, their book value will be negligible compared to a bought-in player, so if sold for the same price, there's be a higher profit on sale.
However, the equation isn't as simple as all the "financial experts" in the press make out. If you keep a player with considerable book value, then you will still write off part of that value in the year (and subsequent years) so whilst selling an Academy player gives you a better result in year one, you're just kicking the can down the road as you'll still book the same costs overall over the next couple of years.
And under the UEFA squad cost rules, the impact is actually reversed as you only get to take 1/3 of the benefit of the higher profit
on sale in year one as profits on sale are averaged over three years. So under UEFA's rules (to be adopted by the PL shortly) you'd be better off in the short term keeping the academy player and selling the guy you bought in. The academy product will probably be on lower wages too because he likely loves the club so won't have negotiated as hard on pay.
But the experts in the press don't understand this.
