Amortisation
The club has to pay the transfer fee to the selling club. In the club accounts it then has to report how much it views each player's worth has declined each year. So for example Hull signing Jimmy Bullard for £5,000,000 on a four year contract costs the club £1.25m per year. This is what is reported as 'amortisation' in the club accounts. At the end of the contract the player can just leave on a 'free' so he is viewed as potentially no worth to the business after that.
This 'amortisation' only covers the costs for players bought in. So Tom Cairney, for example, does not have any effect on the amortisation costs of the club, as he was never bought from another club.
Also once a player has finished his initial contract he stops being counted, so this covers someone like Boaz Myhill.
The other way to look at amortisation is that it is the average amount being spent per year on bringing new players in. The graph shows the club ran with an average "player" spend of just under £1m a year up to 2006, before it went up in 2007 and 2008. The figure for 2009, shows a huge leap from the investment in players in readiness for the Premiership. The 2010 figures will likely be roughly the same as the 2009 ones.
