Updated 1 July 2020 at 16:32 IST
How Barcelona and Juventus will profit from the Arthur-Pjanic swap worth a combined €137m
Barcelona and Juventus have agreed on a swap deal between Arthur Melo and Miralem Pjanic and both clubs will benefit from the sale of the two players.
- SportFit
- 3 min read
Juventus midfielder Miralem Pjanic will join LaLiga giants Barcelona at the end of the season in a deal worth a reported €65 million ($73million). A few hours after the Pjanic deal was confirmed, Juventus announced that Barcelona star Arthur Melo will arrive at Turin at the end of the current campaign in a deal worth €72million ($80m). The total worth of the Arthur-Pjanic swap deal adds up to a whopping €137million ($153m) with both teams benefitting from two separate transfers rather than Juventus simply paying Barcelona €7million ($7.8m) upfront for the Arthur-Pjanic swap.
ALSO READ: Jurgen Klopp's Liverpool Script Glory Out Of Fractured Fairytale As Inevitables Stand Tall
Football transfer news: How Barcelona and Juventus stand to profit from the Arthur-Pjanic swap
Although there is a net difference of a mere €7million in favour of Barcelona in the Arthur-Pjanic swap deal, Juventus and Barcelona will both report close to €52 million ($58m) in profit due to the way player contracts and transfers are handled by football clubs on the accounting front. As reported by Swiss Ramble on Twitter, when a player is purchased by any club, the costs are spread out across the length of the player's contract. However, when a player is sold the profits are immediately logged in the account books as clubs treat players similar to financial assets.
ALSO READ: Chelsea Unveil New Home Kit Inspired By Traditional Craft Of London Tailoring, Fans React
Advertisement
As Arthur was purchased by #FCBarcelona in July 2018 for €30m on a 6-year contract, the annual amortisation was €5m, i.e. €30m divided by 6 years. This means that his book value reduces by €5m a year, so after two years his value in the accounts was €20m. pic.twitter.com/rYiqCq9IoW
— Swiss Ramble (@SwissRamble) June 25, 2020
Barcelona signed Arthur for a reported €30m ($33m) on a six-year contract, meaning they paid off that amount in blocks of €5m ($5.6m). While Arthur's value reduced by €5m each year, his book value is a reported €20m ($22m) currently. Therefore, his sale to Juventus for a reported €72m accounts as a direct €52m profit for Barcelona.
On the other side of the deal, Juventus signed Pjanic for a reported €35m ($39m) from AS Roma on a five-year deal in 2016. After two years in Turin, his book value stood at €21m ($23m). In 2018, Juventus gave him a two-year contract extension which took the annual payments down to €4.2m ($4.5m). When Barcelona agreed a deal to sign Pjanic, his book value was an estimated €13m ($14m), meaning his €65m sale will go down as a €52m profit for the Serie A table-toppers.
Advertisement
Another way of looking at this is that the cash profit on the Arthur sale would be €50m (sales proceeds of €80m less €30m purchase price), but we then add back €10m of player amortisation that has already been booked to the accounts to give the €60m accounting profit. pic.twitter.com/1DsoHxiKt9
— Swiss Ramble (@SwissRamble) June 25, 2020
Arthur-Pjanic swap deal within Financial Fair Play rules
Football clubs are currently in the midst of a financial crisis due to the coronavirus pandemic. With the loss of commercial revenue and no matchday revenue due to games being held behind closed doors, the profits from the Arthur-Pjanic swap deal appear to be a win-win for both clubs. More so, the Arthur-Pjanic swap deal remains well in line withing UEFA’s Financial Fair Play rules, in what will come as a respite for Barcelona, considering their recent big-money deals.
Image Credits - Miralem Pjanic, Arthur Melo Instagram
Published By : Arnold Dsouza
Published On: 1 July 2020 at 16:32 IST