Most people see the Enzo Fernandez record-breaking deal to Manchester City and believe Chelsea made an £18.2m profit.
The fact is, Chelsea has just made a whopping £56m accounting profit.
It’s called amortization, and here is how it works…
Chelsea signed Enzo for about £106.8m on an 8.5-year contract.
They don’t record the entire £106.8m as an expense in one year. Instead, the transfer fee is spread across the length of his contract.
£106.8m ÷ 8.5 years = approximately £12.6m per year.
After roughly 3 years, Chelsea has recognised about £37.7m of the transfer fee as an expense.
That leaves Enzo with an approximate £69.1m book value on Chelsea’s books.
Now, Chelsea sells him to Manchester City for £125m:
£125m − £69.1m = approximately £55.9m.
So, Chelsea has made roughly £56m in accounting profit on the sale. Based on the original amortisation schedule.
- Kriz Cfc
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