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Premier League adjust amortization rules to fall in line with UEFA

5-year max

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Luton Town v Manchester City - Premier League Photo by Marc Atkins/Getty Images

Following UEFA’s lead in closing the “loophole” of actually following rules to the letter, the Premier League have voted in favor of reducing the maximum amortization length of contracts to five years. Previously, the amortization length for financial fair play purposes was however long the contract itself was.

This was not a problem when everyone was (mostly) handing out five-year deals, but then along came the BlueCo braintrust, and they thought to themselves that they could game the system by maxing out contract lengths and thus, amortization lengths as well. (Amortization is the book value of a player’s transfer fee, plus the player’s total wages, divided by the length of the contract remaining.)

And while that has worked wonders in keeping our balance sheets just on the legal side of FFP (or so we’re assured), it has yet to work in terms of the football masterplan. Trust the process, beybee!

But I digress.

The point is, new contracts starting ... now! ... can only be amortized over five years. Previous deals are unaffected. This is exactly what UEFA did (they started the five-max thing last summer), and the only surprise is that it took nearly a whole year for the Premier League to fall in line and vote a similar rule change into law.

For what it’s worth, Chelsea also voted in favor of this because obviously we wouldn’t want other teams to take advantage of this “loophole”. (Similar to how Chelsea were among the teams putting FFP into place in the first place for UEFA. The best way to maximize any advantage we may have gained is to deny the same advantage to other teams!)

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