Amortisation

If Rangers sign a player we generally know how much has been paid in transfer fees, the figures from www.soccerbase.com are a good source.

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 Steven Whittaker joining for £2m on a four year contract would cost the club £0.5m 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 only covers the costs for players bought in. So Alan Hutton, for example, does not have any effect on the amortisation costs of the club, as he was never bought from another club. Most clubs only spread the transfer cost across the length of the initial contract.

The annual amount the club are paying out for players has clearly reduced over the last few seasons. This is always a sign that the club has not been spending money in the transfer market, and this is shown here. The figure increased slightly with the signings in the summer of 2007.

It rose again in 2008 due the influx of McCulloch, Whittaker, Cuellar, Naismith, Webster, Alexander, and Cousin during the year. The June 2008 signings of Miller, Lafferty and Velicka are mentioned by the club but can have minimal impact on the amortisation.

If a player is sold when he has no worth on the books the club see this as pure profit. So for example when Allan Hutton left for Spurs it hit the books as a straight profit.