23 Jun 2016 13:20:27
Hi Ed,

I was just thinking about if you buy a player from abroad and pay monthly instalments or performance based fees, would all fees be paid at the exchange rate at the time of original purchase or when the instalments/ fees are due?

Only asking because the exchange rate can fluctuate a lot and could change the price you pay for a player by millions if its a big money transfer.

Thanks in advance for they reply.

{Ed002's Note - Players are not purchased using monthly based fees. If a price is agreed - say €10M - that is what has to be paid. The exchange rate doesn't change the price of the player at all. You need to think your question out again.}

1.) 23 Jun 2016
23 Jun 2016 13:54:22
Great question Op. I don't know enough about how payments are structured but they aren't always paid in full and up front so I take your point.
If a player was bought at €10m and €5m paid up front and €5m in a years time at a differing exchange rate then wouldn't it impact on the costs unless I am missing something?

{Ed002's Note - You are missing something. The player is sold at a fixed cost at the time - the value does not change. Liverpool would simply move the money from a € account when the second payment is due.}

2.) 23 Jun 2016
23 Jun 2016 14:02:25
I know the € price won't change but €10m @ a 1.25 exchange rate would be £8m whereas at 1.45 exchange rate would be £6.8m. So if you agree a €40m fee paid quarterly would each €10m be at the exchange rate when the deal was originally struck or when the €10m is to be paid? Sorry for the question if it's daft I would just like to know how it works. Thanks in advance.

{Ed002's Note - Clubs maintain € accounts and, often, $ accounts.}

3.) 23 Jun 2016
23 Jun 2016 14:16:04
Large contracts between business in different currency are near always hedged, meaning purchases a contract for x million on x date and the exchange is guaranteed between certain ranges for the future.

Any gain or loss would be treated as fx gain and not assigned to the asset/ player contract cost.

Basic knowledge of it.

4.) 23 Jun 2016
23 Jun 2016 14:44:25
It does change the GBP equivalent price. You have to ask the right question to get the right answer. Our Eds can be very specific. For example if I now ask the Eds who Liverpool are looking at presently, I will get a very lovely red comment back from them ;)

{Ed002's Note - The relevance of the equivalent GBP being what? It also changes the Turkmenistan Manat equivalent price - again it is of no relevance.

Again there is enough here to rationalise why we don't discuss finances at all.}

5.) 23 Jun 2016
23 Jun 2016 15:02:26
Thank you for the reply Ed002 the € account explained it perfectly. No idea why there was any need for all the further messages and abuse. Much love! X.

6.) 23 Jun 2016
23 Jun 2016 17:20:18
Surely they just bang it on a Halifax clarity card, don't pay any fees for using it abroad 😂.