ThingsCanBeTwoThings t1_j6u4z36 wrote

I think the person pointing out the amortization issue is right, still.

I'm not an expert on the financials, but I believe the specific amount amortized is the capex spent to acquire the contract negotiation rights to a given player. Then that 'transfer fee' gets amortized over the life of contract.

Your point about it being non cash is totally fair, but typically for a large soccer team like this one, capex on transfer fees is a constant annual expense; I'd argue that amortization is close to a maintenance capex level. So even if EBITDA is positive as someone above suggested, free cash flow may not be.

To your specific point, when the contracts expire and the amortization goes to zero, you either have to re-sign the player at a much higher salary (players that sign without transfer fees invariably get higher salaries - the team doesn't have to pay to acquire the rights) or you lose the player and have to go buy rights to another player.