It’s been called a loophole, Chelsea signing players to 6-, 7-, 8.5-year contracts to spread out the accounting impact of fees and wages over a longer period than a standard 5-year contract, but that would imply that it’s something that breaks or skirts the rules — when in fact Chelsea have been fully compliant with all the regulations as they pertain to Financial Fair Play (FFP) and transfer cost amortization.
It’s not even that novel of an idea (even outside of the NHL or MLB); anyone who’s played Football Manager in recent years will have done the same. And it’s not without potential risk either, and plenty of it: Chelsea have been saddled with a plethora of bad long-term contracts over the years, and now we’ve expanded that risk by as much as 50 per cent. What’s better than five years of Bakayoko or Drinkwater or Lukaku on the books? Seven point five years! And there’s nothing preventing others from doing the same, as long as they comply with their local labor laws for contract lengths (EU, UK, national, whichever applies in their case: the standard EU limit is 5 years, or at least used to be, but Spain for example was always at least 6; post-Brexit UK may be a lot longer, evidently).
But some teams must’ve jumped on the UEFA NextDoor app to complain about people speeding in their neighborhood and leaving their trash bins out for too long and also about Chelsea’s record levels of spending (not taking inflation into account), and UEFA are reportedly set to take action to close this non-loophole.
According to The Times and plenty of subsequent gloating (and inaccurate reporting) from elsewhere in football media, UEFA will be adjusting FFP rules (the latest, slightly relaxed revision of which came into effect just last summer) to now limit the length of amortization to five years. So, while right now a £100m fee can be amortized as £13.33m over 7.5 years, going forward, it would have to count as £20m over 5 years, even if the player’s contract is longer than 5 years. Presumably, any new contract agreed later on would still allow the team to spread the (remaining) costs out for an additional maximum of 5 years (i.e. if that same player signs a new long-term contract two years later, the remaining £60m balance would get spread out over five years once again, at £12m per).
Amateur FFP analysis on here is always funny but the main figure that matters this season as far as UEFA are concerned is that squad costs are no higher than 90% of revenue. That drops by 10% in each of the next seasons and they will have CL revenue this season, hence going nuts.— Chelsea Youth (@chelseayouth) January 14, 2023
Given that we’re almost done with the winter transfer window, these new rules, even if approved, will not come into effect until the summer at the earliest. So, even greater incentive to go big now. Come on down, Enzo Fernández, Moisés Caicedo, Malo Gusto, Time-traveling Ronaldo O Fenômeno!
There’s already enough irony here to cure anemia forever, but I think my favorite part is that the current amortization costs will be grandfathered in, which means that practically only Chelsea will get to enjoy this “loophole”. So just like with FFP in the first place, which was a response to Roman Abramovich’s spending (crafted in part by Chelsea) that protected his investment by ensuring that no one else (beyond direct state-funding) could do the same again, we’ve now inspired new rules that will again prevent others from utilizing a similar advantage.