By aligning their accounting regulations with UEFA’s starting in the summer of 2019, the Premier League plans to address the Financial Fair Play contract loophole that Chelsea is effectively utilizing. The Blues have been on a spending spree under Todd Boehly and it really seemed like there was no stopping them. However, Premier League has now decided to fill the loophole.
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Chelsea’s spending spree
After agreeing to an eight-year contract to join Chelsea from Brighton, Moises Caicedo will become the 22nd player on Chelsea’s books to sign a contract longer than five years at Stamford Bridge, a move that might assist the club avoid breaking Premier League rules by spreading transfer money over a longer period of time.
This summer, in response to Chelsea’s novel approach to player contracts, UEFA placed a five-year cap on the transfer costs that may be paid, regardless of how long the contract was. However, the Premier League has no such limitation.
The eight-year contract of Ecuadorian midfielder Caicedo allows Chelsea to pay Brighton £115 million over those eight years, and the new UEFA rule will not apply to Mauricio Pochettino’s team this season because they did not make it to the European Championship.
Chelsea will have spent more than £800 million on transfers since Todd Boehly and Clearlake Capital acquired the company in May 2022 thanks to the Caicedo transaction, putting them at risk of exceeding Premier League and UEFA spending caps.
The oddity in accounting regulations has reportedly been brought up with the Premier League by a number of teams and is scheduled to be reviewed in shareholders’ meetings this season.
A Premier League source said, ‘This hasn’t been discussed formally, but is something we will look at. Alignment with UEFA rules would make sense for all parties. The only club currently handing out eight-year contracts on a regular basis is likely to be involved in UEFA competitions soon, as are any others that follow suit.’
Chelsea will be able to prevent FFP breaches in the short term at least because of the usage of longer contracts, which was motivated by Boehly’s experience with the American sports market where such arrangements are more typical.
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