As Barcelona prepare to sell Arthur Melo to Juventus in order to get Miralem Pjanić and €10 million in return, how does such operation work from an economical standpoint?
After weeks of negotiation during and after the coronavirus break, Barcelona and Juventus are in the final stage of a swap deal that is raising many eyebrows, especially among the blaugrana fans. Barça’s 23-year-old Arthur Melo would be heading to Turin as soon as he gives his approval, which apparently he has already given. Meanwhile, Juve’s more experienced midfielder, Miralem Pjanić, would be heading in the opposite direction. Moreover, the Catalans would reportedly receive €10 extra million.
As normal for such a complex operation, this potential transfer is generating a lot of debate. But it by no means is the first time that there are more questions than answers regarding a movement from the Barcelona board. Sporting wise, coach Quique Setién would receive an older playmaker who has been having one of his poorest seasons for the Bianconeri, yet who would provide some much-appreciated creativity at the centre of the park. By contrast, though, he would be losing a bright prospect who fits the team’s style like a glove, but that has been having an understandable dip in form lately.
Regardless of the age, Setién would have to shape his tactics in order to accommodate the new acquisition. Tactically, there are several unknowns to be solved. That said, it’s from a financial point of view that there’s the most complexity. Above any sporting reason, it’s the economical part what seems to be influencing Barça’s business in the market the most. Thus, we must ask ourselves: are the monetary gains high enough to justify such a deal?
The basic principle behind business
Several reports are stating that this swap deal could go through with Arthur Melo being sold for 80 million euros, and Miralem Pjanić leaving Juventus for 70 million euros. So, at first glance, the difference is of €10 million, which is what Juve would have to pay, alongside Pjanić, to get Arthur. In reality, though, the accountable benefit for Barcelona would be of around €60 million – over €65 million, according to Spanish newspaper Sport. Why so?
The key principle behind this and many other operations is the so-called player amortisation. Even if Barcelona pay 70 million for Pjanić immediately, or in a few instalments less than twelve months after the acquisition, on the books such money will be divided through the length of Miralem’s contract. For example, if Pjanić signs a four-year contract with the azulgranas, Barça would record the transfer fee as €17.5m in each of the next four years, rather than €70m now.
The key of such transfer clearly lies in the economical part | Photo by Federico Tardito / Insidefoto via Imago
This is a universal accounting practice that not only applies to the football world. But it perfectly explains this movement between Barça and Juventus. Essentially, when a signing is made, the price paid is spread over the years of such player’s contract. However, when a sale is completed, such profit is instantly booked in the accounts of the selling club.
The economical perspective behind the Arthur – Pjanić exchange
Arthur Melo was signed by Barcelona in 2018. The cost was of €30 million, with Arthur signing a contract for six years. In other words, the annual amortisation of the transfer was of €5 million during each of these six years. Two years after being bought, Barça are now trying two sell the Brazilian. Two years, financially, equal to €10 million ( 5m per year ), meaning that the Spanish giants still have a remaining €20 million that they have not amortised yet.
If Barcelona sell Arthur Melo this summer for €80 million, we should subtract the remaining books value of €20 million. Basically, the profit of such sale would be of €60 million, if we exclude the variables, wages and other minor expenditures, like agent fees and image rights payments.
Arthur Melo has possibly played his final games for Barcelona already | Photo by Lluís Gené / AFP via Getty Images
Having looked at the profit potentially generated by Barça, it is time to look at the profit Juventus would generate by selling Miralem Pjanić. The Bosnian moved from AS Roma to Turin in 2016 for a transfer fee of 35 million euros and a five-year contract. Therefore, the cost was divided into 7 million for each of those five years.
In 2018, the Old Lady renewed Pjanić’s contract until 2023. Since two years had passed since 2016, €14 million ( 7m per year ) had already been amortised. The remaining €21 million was what was left to be amortised. Miralem was signing a new five-year contract, and thus these €21 million were separated into five years: €4.2m per year.
Now, in 2020, Juventus have amortised 14 million plus 8.2 million from Pjanić’s signing from Roma. This equals to €22.2 million from a transfer that initially cost 35 million. Only €12.8 million are left to be amortised by Juve. If they now sell the 30-year-old for €70 million, their profit will be of over €57 million.
Sporting reasons aside, both clubs win financially
With all this being considered, Barcelona would be making a profit of €60 million for selling Arthur, while Juventus would be making €57 million. A huge benefit for both clubs. The difference between Barça and Juve’s profits is very minor, even if Arthur would apparently cost the Italians €10 million plus Pjanić. But it’s the mentioned principle of the players amortisation what makes the gap so slight.
Now the deal to exchange Arthur for Pjanić plus cash is getting close, very close. According to journalist Fabrizio Romano, the 23-year-old has already given his approval to Juventus’ offer, so the official confirmation could just be a matter of hours or days. Juve have a game on Friday against Lecce, while Barcelona visit Celta de Vigo on Saturday. The transfer could thus be finalised before each team’s respective encounter. While from a sporting point of view culés are right to be very reluctant to see such operation happen, economically it can be proved why the Arthur – Pjanić deal presents both institutions a big opportunity to fix their economical problems.
Superagent Raiola wants to transfer Haaland to Barcelona to improve club bonds
According to reliable journalist Oriol Domènech, Mino Raiola is rumoured to be interested in improving his bonds with Barcelona, and is ready to offer one of his star-clients in the process.
Raiola is one of football’s biggest agents, boasting of managing some world-class clients such as Paul Pogba, Marco Verratti, Zlatan Ibrahimovic, and of course the wonderkid Erling Haaland.
Undoubtedly, the last name is the one that entices fans around the globe the most. Breaking out at Red Bull Salzburg, Haaland made a name for himself with his sensational performances in the Champions League, earning him a move to Borussia Dortmund. His start to life at Dortmund could not have been better, as he cracked on with his first hattrick in Germany on his debut.
Moreover, he has pitched in with a nearly unbelievable 35 goals in 34 appearances for the Dortmund outfit since then, averaging a goal every 75 minutes in the Bundesliga — a ratio better than any other player in Bundesliga history to have scored 10 goals or more.
Unfortunately for what it is worth, Dortmund has been the club that can retain talent such as the Norwegian’s. In the past, they have had to let go of players such as Ousmane Dembele, Robert Lewandowski, Mario Gotze, with Jadon Sancho continued to be linked out of the club as well. It is clear that Haaland has already outgrown the Yellow Wall and is ready to take the next step in his career.
That serves as good news for Barcelona fans, more than anyone, as they are in the market for a striker. Strongly linked to Lautaro Martinez in the past, a move failed to materialise owing to Inter Milan’s mammoth €120 million asking price. However, as it turns out, the Blaugrana could be getting the signature of a player termed as a generational talent for a mere €75 million — his release clause.
Undoubtedly, the €75 million will also carry the baggage of having Mino Raiola’s agent fee, which, in the past, has never failed to shock fans. Coupled that with his nature to keep his clients protected with never-ending controversial statements, it might be a deal that Barça will have to think through.
Joan Laporta is reportedly on good terms with the Italian, though, which could make the transition of working with him easier, if the Spaniard is elected president of Barcelona on 24th – or later, as has been reported recently. Either way, Barcelona cannot, and should not pass up the chance to sign one of the greatest talents in world football right now, especially since arch-rivals Real Madrid have set their eyes on a certain Kylian Mbappe.