Juventus announced on Monday that Arthur Melo had been signed from Barcelona with Miralem Pjanić moving to the Spanish club.
Juventus is paying €72 million ($81M) for the 23-year-old Brazilian midfielder while Barcelona is paying €60 million ($67M) for a player that turned 30 in April.
Both deals include possible bonus payments based on performances – €10 million in the case of Arthur and half that amount for Pjanić.
The deals make sense for Juventus. At a net possible cost of €15 million, they have secured a player whose best years are ahead of him and who has already played 20 times for Brazil and helped to win the Copa Libertadores before his move from Grêmio to Barcelona in 2018.
When signed by Barcelona, Arthur was labelled by the PR machine as the next Xavi. Just two years later he’s being written off because apparently he played too many square balls. If that’s true, then it does beg the question why?
That’s the way he’s always played, poor coaching, lack of confidence, not enough movement ahead of the midfield. None of these possible reasons reflect well on Barcelona.
Neither does the acquisition of Miralem Pjanić. A fine player but his best days have been spent with Roma and Juventus in Serie A. Quite why anyone would see adding another 30-year-old to the Barcelona midfield as a positive move is beyond me.
For Barcelona, it is the latest in a series of bad acquisitions made in the absence of a coherent transfer strategy.
The average age of the current Barcelona squad (source Transfer Markt) is 26.9 but there are 7 key players that are already on the other side of 30 and another 4 first team players over 28.
One of constant themes over the last twelve months has been Barcelona pushing to move 32-year-old midfielder Ivan Rakitic. Rakitic is still at the Camp Nou and now he has another 30+ teammate.
Much has been made of the inflated values placed on the two players given the economic environment. What’s clear is that both clubs have pushed the values to the limit in order to improve their financial statements for the 2019/20 year.
As Colin Millar, author of “The Frying Pan of Spain: Sevilla v Real Betis: Spain’s Hottest Football Rivalry” has pointed out this is nothing new for Barcelona.
However, the “profit” booked by the two clubs will almost certainly be less than the headline writers would have us believe.
The Daily Mail estimates that Barcelona’s profit on selling Arthur will be €60 million; Juventus’ gain €57 million. But in both cases, the Daily Mail’s transfer fees included potential bonuses that are only going to be decided sometime in the future.
Juventus burst at least part of the “profit” bubble when it announced that the profit on the Pjanić deal will be close to €41.8 million; not shabby but less than three-quarters of the Mail’s estimate.
Barcelona’s profit on selling Arthur Melo is likely to be closer to €46 million rather than €60 million. The profit on the sales of Arthur will help but it is unlikely to completely close the Barcelona budget gap as was explained in this article a month or so ago.
But the “profit” that both clubs can book for 2019/20 is only one part of the accounting balancing act. Because the transfer fees assigned to the deals have been inflated both teams will face increased amortization costs in future years.
There may be a “profit” for 2019/20 but the profit is offset by an increase in costs in the following years. The “profit” is an aberration.
Juventus will have to record additional amortization of €14.4 million for each year from 2020/21 through to 2024/25. Juve’s amortization cost for 2018/19 was over €178 million and over €89 million for the first six months of 2019/20 – up from €78.3 million for the same period twelve months before. Just as a comparison, back in 2014/15, Juventus recorded amortization of just €67 million.
Barcelona’s amortization cost in 2018/19 for the soccer squad was €143 million and was budgeted at €134 million for 2019/20. The acquisition of Pjanić will require Barcelona to book an additional €15 million in amortization costs for four years starting in 2020/21.
Over the last few seasons as the transfer market inflated, teams could pay higher transfer fees and defer the costs through amortization confident that the value of their players would rise as well.
That is now a much riskier proposition. Amortization is a sunk cost and once the transfer fee is paid the future cost is locked in.
Juventus’ position is mitigated by the relative youth of Arthur; the same cannot be said for Barcelona and Pjanić.
Barcelona paid €31 million to Gremio in 2018 for Arthur’s services. Since then he played 71 games for Barcelona and scored 4 goals and recorded 6 assists. (It’s a major weakness in Arthur’s game, but Juventus will almost certainly play him a deep midfield role where his performance will be assessed based on his passing and defensive duties rather than goals and assists.)
Pjanić started his Serie A career with Roma after a €10 million moved from Lyon in 2011. He then moved to Juventus from Roma in 2016 for a fee of a little over €30 million. In 170 games for Juve, the Bosnian midfielder scored 22 goals to go with 36 assists.
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