The press releases of two now discounted operations have finally arrived, the details of which have now been made known: the release of Cristiano Ronaldo and the purchase of Moses Kean; let’s first of all analyze the elements from an economic-financial point of view.
Let’s start from CR7, whose tag was in charge at the end of June at approx 29 million, with a hypothetical reduction for the two months elapsed in the new year which would have placed the book value at approximately 24 million as of 31/8/2021: the sale took place for 15 million (payment in 5 years) plus an additional 8 payable upon achievement of objectives. The Continassa Club, as stated in the press release, has decided di adjust the value of the tag to 30/6/2021, therefore in the financial statements of the past year, recording a capital loss of 14 million, and may instead record a capital gain of 8 million in the case of realization of the part of the price linked to objectives; moreover, in the new financial year, obviously, the amortization of the card will not be recorded until 31/8 (approximately 5 million), as the value of the same has already been adjusted to 15 as of 30/6/2021, as mentioned. And finally, approximately 55 million gross of the Portuguese star’s salary will be deconsolidated, which will no longer weigh on the budget.
With reference to Moise kean, the operation is more complex, and provides for an onerous loan for two years, with the obligation to purchase on 30/6/2023; the values are 3 million for the current season and 4 for the next, while the residual purchase price will be 28 million (payable in 3 years), plus 3 million of variable price to objectives; the overall package therefore provides for a total consideration of 38 million for the young striker, who, as is known, being from the nursery, will not occupy positions in the Champions list.
The salient data of the two are exposed deal, let’s make some considerations.
With reference to CR7, the negotiating position of the Juventus club was objectively among the worst: the Portuguese did not want to stay, now this is known, and Juventus were at risk of a painful story of contract termination, or of the player being taken out of the squad. A certainly devastating hypothesis, considering the salary of 31 million net, which presumably should have been paid equally, in addition to the loss of the entire amount of 29 million of the price tag. Certainly it bothers having to record a loss in the balance sheet as at 30/6/2021, but this seems to us to have a logic, in addition to limiting the losses, also considering that the 2020/21 balance sheet will certainly be “massacred” for many other reasons , attributable to the pandemic; therefore Juventus has also chosen to spend the 14 million of CR7 and to turn the page.
We come to Kean: certainly the repurchase of a player at prices higher than those of the sale only two years ago can raise elements of perplexity, but, as already happened with Romero, this phenomenon must be acknowledged to the company that made the enhancement, Everton in this case: if it’s true that Kean’s first year left something to be desired in the Premier League, certainly the year at PSG has increased its value. The transaction formula is now a classic and will allow the impact on the income statement to be diluted over several years (we will see in this regard whether Juventus will decide to already account for the value of the card – applying the IFRS16 accounting standard – or if it will treat it as a loan, starting amortization only in two years).
