The transfer approach of Chelsea has been compromised following the decision of Premier League shareholders to limit amortisation to a maximum of five years.
During the meeting on Tuesday, clubs discussed the practice of contract amortisation, which involves gradually decreasing the original cost of a player throughout the duration of their contract. It was decided that the Premier League would align with Uefa’s stance on this matter.
Chelsea’s owners, Todd Boehly and Clearlake Capital, have looked to spread the cost of transfers across up to eight years. It is understand, though, that they backed the change, which will apply to new and extended contracts. A motion needs the support of 14 clubs to be passed.
Chelsea can breathe a sigh of relief knowing that the recent policy change will not be applied retroactively to last summer. The lack of support for this decision prevented it from being put to a vote. Last summer, Chelsea spent over £400m on player acquisitions, including a record-breaking fee of £115m for Moisés Caicedo from Brighton.
Boehly and Clearlake have signed eight-year contracts since acquiring Chelsea from Roman Abramovich. This allows them to distribute the costs of transfers over a longer period, which is beneficial in terms of financial fair play regulations. However, Uefa closed this loophole last summer and now clubs are only allowed to spread out payments for transfers over a maximum of five years according to their rules.
Chelsea may still offer longer contracts, but they will have to adjust their amortisation if they are participating in European competitions.
Uefa did not backdate the move. As a result, Chelsea purchased Caicedo and offered him an eight-year contract. The league’s regulations on profit and sustainability allow teams to incur a loss of £105m within three years, with adjustments for Covid.
Chelsea reported a loss of £121m in their latest financial report and is currently under investigation by the league and the FA. The club revealed that they had submitted incomplete financial information during Abramovich’s time as owner. Uefa has imposed a fine of £8.6m for this admission.
Clubs also approved a rule amendment to place teams under a transfer ban if they owe “a transfer debt to another Premier League or EFL club … until the outstanding payment has been made”.
According to a statement by the league, the board may choose to subtract the amount from the club’s share of the league’s central funds.
The discussion also returned to the proposed “new deal” for football. Despite attempts to approve the deal at the previous league meeting a month ago, a resolution was still not reached on Tuesday as clubs discussed potential solutions.
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There is disagreement among 20 clubs regarding two crucial elements of a deal: payment methods and establishing cost controls as a mutually agreed condition.
Several smaller clubs have contended that implementing cost controls, which would permit spending on players up to 85% of revenue, would not be enough to sustain them in the Championship if they were to be relegated.
There was a discussion about how to divide the anticipated expenses. The league has decided on a total amount of £358m to be shared among EFL clubs in the span of three years. Two options have been suggested for splitting the sum: imposing a tax on transfers or expanding the current funding system for “solidarity payments” (where each club contributes an equal amount from their TV earnings).
During the discussion, the models were considered and the possibility of combining them was also brought up. However, no agreement was reached and the league plans to revisit the matter in January.
Source: theguardian.com
