Chelsea contracts lead to Financial Fair Play rules change

26 Jan, 2023 - 00:01 0 Views
Chelsea contracts lead to Financial Fair Play rules change

H-Metro

UEFA is to change its Financial Fair Play rules in response to Chelsea’s recent trend of signing players on long-term contracts.

Signing players on extended contracts enables Chelsea to spread the player’s transfer fee over the life of that deal when submitting their annual accounts.

That means £89m signing Mykhailo Mudryk will be valued at £11m a year over his eight-and-a-half-year deal.

Uefa is to set a five-year limit over which a transfer fee can be spread.

Clubs will still be able to offer longer deals under UK regulations but will not be able to stretch transfer fees beyond the first five years.

The change to FFP rules will come into force during the summer and will not apply retrospectively.

France defender Benoit Badiashile and Ivory Coast striker David Datro Fofana both signed six-and-a-half year deals at Chelsea earlier this month and Noni Madueke joined on a seven-and-a-half year contract following Ukraine winger Mudryk’s arrival.

Defender Wesley Fofana moved to Stamford Bridge on a seven-year deal and left-back Marc Cucurella joined on a six-year contract last summer. Raheem Sterling’s deal is five years.

The Madueke transfer took Chelsea’s spending since last summer close to £450m, but the players’ long contracts will help them comply with the regulations.

The Blues have to adhere to two sets of regulations the Premier League’s profit and sustainability rules and, as they regularly play in European competition, Uefa’s FFP regulations.

Under Uefa’s current rules, clubs can spend up to 5m euros (£4,4m) more than they earn over a three-year period. They can exceed this level to a limit of 30m euros (£26,6m) if it is entirely covered by the club’s owner.

The governing body has a wide list of potential punishments for clubs that break these rules, ranging from warnings to fines and even the loss of European titles.

However, new Uefa rules introduced last June limit clubs’ spending on wages, transfers and agents’ fees to 70 percent of their revenue, although permitted losses over a three-year period have risen to 60m euros (£49,96m).

A gradual implementation of the regulations has been agreed, with the percentage set at 90 percent of revenue in 2023-24 and 80% in 2024-25 before reducing to 70 percent in 2025-26.

The Premier League’s separate rules allow for total losses of £105m over a three-year period. Any club that posts losses in excess of that figure could face penalties, including large fines or even a points deduction.

Uefa acting so clubs are not at risk analysis

Some may wonder why Uefa is getting involved in this and suggest it should be up to Chelsea, or any other club for that matter, to offer the contracts they like as long as they are abiding by the rules.

However, the belief is the change away from Financial Fair Play regulations to financial sustainability was done to make the game operate in a way that does not put clubs at risk.

Uefa, as the regulator, feels it is its responsibility to ensure the game is run in a manner where clubs are not at risk of overstretching themselves.

By amortising players over a longer period of time, clubs are limiting their scope for spending in the future because the value of those players is reducing more slowly than normally would be the case.

The feeling is Chelsea is such a high-profile example, if others were to follow, they could put themselves in trouble. BBC Sport.

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