Post by matcowdrey on Jan 3, 2019 16:21:26 GMT
Whilst they are assets of a sort, they are classed as intangible assets at the time of purchase, In other words; if a player cost £300,000 and signed on a three year contract, with amortisation (they are not depreciated as they are not tangible assets) after 1 year, with 2 years left on their contract their intangible asset value would decrease to £200,000.
So, the logic goes that at the end of their contract their value is £0.
Now you do of course have the scenario where a player improves or becomes more desirable during the lifetime of their contract. Again, this value is only recognised when a transfer takes place. A bit like a product "Brand", it can only be revalued at the point of sale. Without a sale it's effectively worthless in cash terms.
And now you get to see why transfer fees are so low in the lower leagues compared to the astronomical fees in the top flight. If you've got a player who was picked up for £50k on a three year deal and he's got a year of his contract left, unless he's setting the world alight (And shoot me down in flames here by all means, but I doubt we'd have them at Crawley in this case... ) then the value of that player is very unlikely to be much above £20k.
Now, to counter all of that, whilst the players do represent an intangible asset, they also represent a liability in terms of wages. So whilst you may have a player worth £20k, it's going to cost you more than that in wages to keep them.
That's fine if it keeps you ticking over as a club, but if you're looking at this from a strategic investment perspective, you wouldn't touch it with a barge pole.
So to summarise, what you're buying is League 2 Football Club status. And with the current balance sheet (like the vast majority of other League 1 and 2 Football Clubs) you're only going to enter into this with the expectation of losing money. Lots of it.
As the old adage goes: How do you get £1m out of a League 2 Football Club? Start with £2m...!
but in all fairness a great read and some interesting points so thanks for taking the time to post Mat i enjoyed reading it