No severance pay in Torres deal - report

After days of talk about Fernando Torres' severance pay, we've finally found out that Chelsea will not be giving the striker a single penny to leave Stamford Bridge. At least, that's if Jason Burt at Telegraph is to be believed.

No fee is involved and Chelsea are effectively ripping up final two years of his contract. Torres does not receive any kind of pay-off. It had been thought Torres was holding out for a pay-off but because he is signing a permanent deal he has accepted now that he will not receieve [sic] one.

This is a slightly weird situation, so let me do my best to explain what's happened (bearing in mind that this is guesswork). Fernando Torres has happily agreed not to make Chelsea pay any of the wages the team owes him over the next two years. In return, Chelsea aren't making AC Milan pay a fee for the wantaway striker, which allows them to give him more wages. The deal is a loan, I think, because if it was a free transfer the entire £18 million we still owe Liverpool from January 2011 (after three and a half years of amortisation) would immediately become due; on a loan I'm fairly confident that the old transfer fee remains amortised.

Long story short: right now I believe the way this deal is structured probably saves Chelsea money both this year and next. Not all of the money that was earmarked for Torres, but enough of it to be worth doing. Cool.