Soccer Speak Word of the Day: Depreciation

Posted on by

Remember when to talk about soccer, you just needed to know the words: (1) Goal, (2) Ball, (3) Goalie, (4), Defender, (5) Midfielder, (6) Forward, and (7) Il Divino Codino? No longer. Now we have tactics-speak. We also learn financial terms to understand just how underwater are our beloved clubs. Today’s “word of the day” (which is not going to become an actual daily post, tsk tsk), is “depreciation.” It goes very well with Ricardo Kaka.

Let me explain.

Depreciation is an accounting term. Basically, your beloved club is a business. Businesses file tax returns each year, unless they are Atletico de Madrid or Malaga. In those tax returns, businesses can make deductions for an asset they have acquired but has decreased in value over the past year.

Technical definition: a deduction over an asset’s estimated useful economic life so as to reflect its consumption, expiration, obsolescence or other decline in value as a result of use or the passage of time

Example: a restaurant buys a $2,000 dishwasher. After a year, the reasonable value of the dishwasher drops to $1,700. That restaurant can deduct $300 from its tax return. For many soccer clubs, their greatest tangible asset is players. A players’ value may decline over time. In fact, most players’ value declines over time, unless you are Javier Zanetti.

Used correctly in context: that’s crazy Real Madrid paid tens of millions of dollars to sign Kaka. He just tweets with teenage Brazilian girls parabens, launches new ADIDAS shoes which nobody cares about, and rides the bench. At least Real Madrid can claim depreciation for Kaka’s obsolescence on their tax returns.

PHOTO: Reuters

2 thoughts on “Soccer Speak Word of the Day: Depreciation

  1. Not that one needed a whole lot of foresight for this, but as soon as Brazil lost to Holland I feared the worst for his career. WC 2010 had last chance written all over it.

    • I was kinda angry at that decision – he was crocked almost all season for Madrid, but magically returns to fitness for one last World Cup. Uggh.