There was no way Chelsea’s spending spree under new owners was going to go unchecked. While it may have been a delayed response from UEFA, but the European football’s governing body has finally decided to take some action against the Blues’ humongous spendings over a dozen signings. Chelsea, backed by American billionaire Todd Boehly who completed the club’s takeover last year in partnership with Clearlake Capital, have spent a record £460m on new signings since the summer.
However, it left many wondering, why isn’t the FFP [Financial Fair Play] is taking a note of the Blues’ freewill splurge which in some way contributed to inflate the market. Boehly paid gigantic fees in the range of £50m to £90m on the acquisitions of four players amongst the 14 he bought since taking over the club from Roman Abramovich. But apparently, he did use a trick to escape any sanctions from the UEFA, by handing out 7 to 8 year-long contracts to majority of the new players.
UEFA to change time limit for a transfer fee to be paid in wake of Chelsea’s spending
Chelsea not only acquired a staggering 14 new players since the summer [two on loan in Joao Felix and Denis Zakaria], the Blues also handed out lengthy contracts to them than the usual and standard five-year deals. The likes of Wesley Fofana [£71m], Mykhaylo Mudryk [£66m], Marc Cucurella [£57m], Carney Chukwuemeka [£16m], Noni Madueke [£31m], David Datro Fofana [£10.5m] were all tied to contracts ranging from six years to nine years.
The Blues did so in an attempt to stabilise the club’s financial accounts through amortization. Amortization is an accounting term for how football clubs deduct the cost of a transfer fee over the course of the player’s contract. Therefore, the longer the contract, the less annual payments on the financial books. For instance, when Mudryk signed an eight-and-a-half-year contract, the longest in English football history, his £66 million transfer fee will therefore be valued at £ 7.7 million according to UEFA’s FFP calculations.
This allowed Chelsea to spend big, yet avoid any sanctions from the UEFA. However, that is apparently going to be changed, as according to The Times, the governing body has decided to act strictly to close the loophole. UEFA is set to introduce a five-year maximum time limit for paying a transfer fee. The new rule will likely be implemented before the summer transfer window. A source, as quoted by The Times said:
“If other clubs start doing the same with eight-year contracts it will be a mess so we need to protect them. It is simply shifting a problem to the future. Either a club can get stuck with a player on a high salary that they cannot sell, or if they sell him after three or four years they will not realise much profit [in accounting terms] because a lot of his transfer fee has not been amortised.”
According to FIFA rules, contracts can only be for a maximum of five years unless the law of the country specifies otherwise. There aren’t any restrictions at the moment in the UK. Spreading the cost of payments for players Chelsea has previously signed will not be a problem. The likes of Wesley Fofana is on a seven-year deal, Badiashile and Madueke on seven-and-a-half-year deals, Cucurella and Chukwuemeka on six-year deals, and David Datro Fofana on a six-and-a-half-year deal.