Welcome Joao Cancelo

OntarioBlue said:
Probably been said already. I see the BBC has managed to turn this deal, which right from the outset was being reported as a €55m deal into a £60m deal.

I don’t understand what they achieve by reporting like this. According to them Danilo is valued at £34m in the deal which makes Cancelo £26m. Surely, it would be the other way round even if the figures were correct.

It doesn’t really matter but this poor, lazy reporting makes me crazy.

Welcome to Manchester Mr Cancelo, we are all looking forward to seeing you play for The Champions.
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To be fair, the details of the deal were first reported on Sky immediately after the announcement he'd signed. Sky & the BBC must be getting briefed from the same source.
 
SebastianBlue said:
What you are saying makes sense, but only if the Cancelo and Danilo deals where not related, which they were. One does not happen without the other.

Meaning it is perfectly fair and proper to account for them on a net basis (a combined transaction).
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OK, let’s finish this once and for all.

How much did your last car cost?
How much was your trade-in worth?

OK, now, how much was the invoice for the last car you bought?
What was your net cost?

We can do this all day, but Cancelo cost £60M and our books will reflect that when we amortize him for FFP, just as Juve will add the sale of Cancelo and the amortization of Danilo in Juve’s books.

Beyond this, I can’t help you. Be well.
 
ChicagoBlue said:
Still no. Sorry. You didn’t study maths at Uni, did you?! ;-)
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I did, actually, double first in economics and statistics (with some data analytics mixed in, which is my current profession). ;-)

We’re talking about two different things: accounting for purposes of intrinsic value (public; my and @Stoned Rose statements) and the book value (private; what you and I have expounded on previously).

As I said before, for intrinsic value, it is perfectly fair and proper to account on a net basis. We aren’t keeping account for either club, or answering a case of FFP compliance to UEFA, so there’s no reason for either of us to attempt to parse the exact book figures for a transaction we have no detailed knowledge of. We couldn’t if want to do so.

By the way, amortisation of assets, such as cars, can be factored in for purposes of holdings, so I am not quite sure why you are using that as an example in your post below.

ChicagoBlue said:
OK, let’s finish this once and for all.

How much did your last car cost?
How much was your trade-in worth?

OK, now, how much was the invoice for the last car you bought?
What was your net cost?

We can do this all day, but Cancelo cost £60M and our books will reflect that when we amortize him for FFP, just as Juve will add the sale of Cancelo and the amortization of Danilo in Juve’s books.

Beyond this, I can’t help you. Be well.
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Are you mistaking me for someone else, as you have quoted my same post twice?
 
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SebastianBlue said:
I did, actually, double first in economics and statistics (with some data analytics mixed in, which is my current profession). ;-)
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Doffs cap in admiration.

We’re talking about two different things: accounting for purposes of intrinsic value (public; my and @Stoned Rose statements) and the book value (private; what you and I have expounded on previously).

As I said before, for intrinsic value, it is perfectly fair and proper to account on a net basis. We aren’t keeping account for either club, or answering a case of FFP compliance to UEFA, so there’s no reason for either of us to attempt to parse the exact book figures for a transaction we have no detailed knowledge of. We couldn’t if want to do so.
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To the clubs, they are separate and distinct transactions, even though both teams wanted to be certain they had a replacement, seeing as they are both covering the same position, at the time of sale. We can discuss this forever, so I’ll leave it alone.

Are you mistaking me for someone else, as you have quotes my same post twice?
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Possibly. I’m surfing between two forums while watching the news and, at one point, eating!!
 
I spent a good while explaining in the media thread why the BBC reporting Cancelo for 60 million was correct and not some conspiracy because in their mind they believe he only cost £26 million. then I have a nosey at just the last 2 pages on here and see it’s rife here too. At least on here there’s some people that get it.

City Rich said:
You treat them separately:

Going back to previous quote:

Taking Danilo’s book value into account

(27m amortised over 2 years of a 5 year contract).

His book value was about £17m.

We’ve sold him for 34 so made about 17m on him.

Cancelo’s fee is 60m so that’s 12m a year amortisation.

This means this year we’ll make a net 5m in our p&l 17m profit on the sale of Danilo less the 12m amortisation on Cancelo.

For years 2-5 of cancelo’s contract we’ll see a 12m hit to our p&l.
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A good summation but you missed off the £5.4 million annual amortisation incurred from Danilo’s purchase from Madrid that we effectively save through his sale. And Cancelo signed a 6 year deal not 5 thus reducing his amortisation to 10m per annum instead of 12m. both those adjustments means we make a 12.4m profit from this for this year instead of 5m with a 4.6m amortisation increase for the next 2 years after that and 10 for the remaining 3
 
ChicagoBlue said:
Doffs cap in admiration.
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Only shared because you asked, mate. ;-)
ChicagoBlue said:
To the clubs, they are separate and distinct transactions, even though both teams wanted to be certain they had a replacement, seeing as they are both covering the same position, at the time of sale. We can discuss this forever, so I’ll leave it alone.

Possibly. I’m surfing between two forums while watching the news and, at one point, eating!!
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We could indeed debate part of this forever, but I wouldn’t debate the book value, as I couldn’t, given I don’t know enough about the transaction to do that. In my world we refer to that as having an insufficient universe for analysis (returning to low confidence).

But I think we can both agree that net basis can be used for a cash + in-kind (with agreed upon valuation) transaction for setting intrinsic value of the discrete transation, in this case Cancelo for Danilo plus cash, yes?

We’re obviously operating on reported figures, so could still be well off, but the point still stands that the value reported isn’t really /simply/ representative of the actual transaction (at least, that is what I made of @Stoned Rose ’s post).

@ninjamonkey Good write up, mate — but see above for why it’s two different assertions that are not the same, meaning both can be true.

Edit: adding @City Rich, who also had a good summation.
 
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