Home » Sport » The latest use of the loophole in the rules, or How Chelsea maintains financial fair play and why they have to go to the Champions League

The latest use of the loophole in the rules, or How Chelsea maintains financial fair play and why they have to go to the Champions League

The absolute highlight of the January transfer window was the capture of the Argentine world champion Enzo Fernández from Benfica Lisbon. Amount? An incredible 2.8 billion crowns, the most in the history of the Premier League. To that, let’s add the Ukrainian Mykhailo Mudryk for more than two billion and even other players.

The new American owner Todd Boehly has shown since the beginning of the world that his financial possibilities are actually unlimited. But even so, the club must comply with the financial rules set by the domestic competition and the UEFA organization (although we know of cases from the recent past when violations were not too harshly sanctioned).

Premier League rules allow total losses of £105m over a three-year period. A club with a higher loss may face sanctions, including heavy fines or even points deductions. UEFA has it a little differently, it uses a new set of measures called Financial Sustainability and Club Licensing Regulations (FSCLR).

Let’s keep it as short and simple as possible. According to the new statutes of the FSCLR, clubs can spend only 70 percent of their income on football activities (transfers, agent rewards, player and executive team salaries). But there is still a long way to go before reaching this limit, as it will only apply from the 2025/2026 season. For the 2023/2024 season, the limit is still 90 percent, in the next year it will be ten percent less.

But UEFA, on the other hand, will allow clubs to incur larger losses, the possible amount of which will double from today’s 30 million euros for three years to 60 million euros during the same period. The limit can be raised by an additional 10 million euros for each year of the given period in which the club was financially sound. Yes, quite a complex calculation. The explanation is that clubs can afford more expensive squads and bigger shock losses, but they have to earn more to cover them.

And how exactly does Chelsea use the loophole in the current rules? “She decided to spread the cost of the players by giving them very long contracts. They signed Mudryk for eight and a half years, which will spread the entire transfer fee over this period. So Mudryk costs Chelsea approximately ten million pounds a year,” explains Kieran Maguire, an expert on finance in the football environment, for Sky Sports.

TOP 10 Chelsea purchases in the 2022/2023 season

Name Age Transfer amount (in millions of euros) Contract until
Enzo Fernandez 22 121 June 2031
Wesley Fofana 21 80,4 June 2029
Mychajlo Mudryk 22 70 June 2031
Marc Cucurella 24 65,3 June 2028
Raheem Sterling 27 56,2 June 2027
Benoît Badiashile 21 38 June 2030
Kalidou Koulibaly 31 38 June 2026
Noni Madueke 20 35 June 2030
Malo Gusto (guest in Lyon until the end of the season) 19 30 June 2030
Carney Chukwuemeka 18 18 June 2028

*source: Transfermarkt.com

It also mentions the advantages and pitfalls of this procedure. “If the players are really developing and successful, the length of the contract gives the club some protection in case someone tries to sign the player. The downside is that if footballers don’t perform, they are likely to be on very high salaries for the next six, seven or eight years. That is like an anchor for the club,” adds Maguire.

Chelsea also chose the same procedure for Fernández, who signed until the summer of 2031. And while the expenses can be distributed in this way, the amount from the sale of players can be calculated in full by the clubs immediately. So two sales for 10 million pounds and with both Mudryk and Fernández you are at zero for the year.

But Maguire warns that it is extremely important for Chelsea to play in the next season of the Champions League. The Londoners are currently tenth in the domestic league and ten points short of the places ensuring participation in the millionaire competition. Of course, they can still secure an automatic ticket by triumphing in this year’s Champions League.

“If Chelsea didn’t qualify, there would be a problem. Looking at the year 2021 when they won the Champions League, they generated around €120 million in prize money. Under normal circumstances, he can be expected to earn between £3m and £4m for every home game played at Stamford Bridge, plus bonuses from sponsors. “If you then compare it to the Europa League, for every one pound you earn there, you have about 4.5 times more in the Champions League,” Maguire calculates.

In addition, the governing bodies are already reacting. UEFA is set to set the period for which clubs can spread the transfer fee of a new player over a maximum of five years. The new policy is due to be introduced before the 2023 summer transfer window. The win for Chelsea is that the rule will not apply retroactively.

“I would really like to know what the manager’s private thoughts are because it seems to me that he has arrived at the club and footballers are coming in from the left, from the right. Chelsea will have great players, but can they create the kind of team ethic and bond that all big clubs need in the future? But if you’re a fan of hers, the current season is really exciting. Todd Boehly has come in, put his money in and wants to get Chelsea back to the top,” commented Liverpool legend Jamie Carragher.

And he emphasizes one more important factor. Let’s not forget that the roster for domestic and European competitions can only contain 25 names. Around two-thirds of that number have been brought in by Chelsea to their A-team in the last 12 months alone.

Finally, let us remind you that since last summer, UEFA has been investigating twenty clubs, including Paris St. Germain, Barcelona, ​​Inter Milan, Juventus Turin, AS Roma, Arsenal or Marseille.

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