Long contracts are an accounting choice, not a show of faith

When a club hands a young player a seven-year deal, the spreadsheet is doing more of the talking than the coaching staff.

A transfer fee is not expensed the year it is paid. It is spread across the length of the contract, a little each season, which is the single most important thing to understand about why deal lengths have stretched the way they have.

Buy a player for a sum and give him a four-year contract and the annual cost hitting the profit and loss account is a quarter of the fee, plus wages. Give him eight years and the annual charge halves. Nothing about the cash has changed; the club still paid the same money at the same time. But spending regulations are assessed on accounting figures, not cash, and so a longer contract makes an expensive signing fit inside a rule it would otherwise break.

For a while a small number of clubs used this aggressively, handing very long deals to players in their early twenties. Regulators eventually capped the amortisation period, typically at five years, which tells you the practice was material rather than clever accounting theory.

The consequence for the player is double-edged. A long contract is security, and for a young man from a modest background that is worth a great deal. It is also a leash. The club holds an asset with a long book value, which means it can refuse a sale, and a player who wants to leave in year three has to break something to do it. His market value fluctuates. His book value declines on a straight line indifferent to form.

The nastiest scenario is a career-ending injury early in a long deal. The club carries an asset it cannot use and must eventually write down, wages it must still pay, and an insurance policy that may cover part of it. Those are the deals that sink budgets, and they are structurally more likely under the incentives above.

If I ran a competition I would assess spending on cash paid in the period rather than amortised cost. It is cruder. It is also far harder to engineer, and the current system rewards nothing so much as a creative finance director.

Contract length used to say how much a club believed in you. Now it mostly says how much it needed the number to shrink.