The Arthur, Miralem Pjanic swap deal
It’s not yet done, but reports in Italy and Spain seem increasingly confident that Barcelona and Juventus could soon complete a transfer deal which would see Arthur Melo and Miralem Pjanic swap clubs.
In recent days, reports have claimed that Juventus and Barcelona have agreed to a swap deal.
Spanish paper Marca have today reported that Juventus have offered Arthur a pay-packet of €5.5m per year, which would triple his current salary at Barcelona.
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— Giovanni Capuano (@capuanogio) June 24, 2020
How the swap deal would allow Barcelona & Juventus to post €60m profits
The excellent Swiss Ramble has revealed that, under the proposed terms of the swap deal, Barcelona and Juventus will both be able to post close to €60m profits on their next balance sheets.
According to the mooted outline of the deal, Barcelona will sell Arthur to Juventus for €80m, while Pjanic will join Barca for €70m.
So why isn’t the deal simply structured as Juve paying €10m while the players simply swap teams? It’s due to financial accounting.
From a financial perspective, it would appear that #Juventus are effectively paying #FCBarcelona €10m to exchange Pjanic for the younger Arthur, but the accounting treatment means that both clubs will report around €60m profit from this transaction. Let’s explain how.
— Swiss Ramble (@SwissRamble) June 25, 2020
Basically, football clubs consider players to be assets, so they do not fully expense transfer fees in the year a player is purchased, but instead write-off the cost evenly over the length of the player’s contract via player amortisation.
— Swiss Ramble (@SwissRamble) June 25, 2020
Despite arriving in a €30m deal from Gremio, after two seasons at the Camp Nou, Barcelona’s accounts show that Arthur has only cost €20m.
Thus, if Barca sell the Brazilian for €80m to Juve, they can claim a €60m profit.
Similarly, Juve can apply the same accounting trickery to Pjanic.
The Bosnian joined the Bianconeri in a €35m deal, however he’s since extended his contract until 2023. Accordingly, his cost to Juve so far stands at just €13m.
So, if Juve sell Pjanic for €70m, they’re able to say they’ve netted a €57m profit.
See the Swiss Ramble’s thread
If Arthur is indeed sold for €80m, then #FCBarcelona profit on player sales from an accounting perspective would be €60m, i.e. sales proceeds of €80m less remaining book value of €20m. Note: we are ignoring €9m of variable transfer fees, as payment criteria not known. pic.twitter.com/tlofB2QDDJ
— Swiss Ramble (@SwissRamble) June 25, 2020
Pjanic was purchased by #Juventus in July 2016 for €35m on a 5-year contract, so the annual amortisation was €7m, i.e. €35m divided by 5 years. This means that his book value reduces by €7m a year, so after two years his value in the accounts was €21m. pic.twitter.com/mKZSOZ1uHZ
— Swiss Ramble (@SwissRamble) June 25, 2020
If Pjanic is sold for €70m, then #Juventus profit on player sales from an accounting perspective would be €57m, i.e. sales proceeds of €70m less remaining book value of €13m. pic.twitter.com/C34Ghbt8SS
— Swiss Ramble (@SwissRamble) June 25, 2020
Given the relative ages of the players, the “exchange” might also raise questions about the state of #FCBarcelona’s finances, as €10m would appear to be a fairly low net gain for the Catalans.
— Swiss Ramble (@SwissRamble) June 25, 2020
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