UEFA will change its Financial Fair Play rules in response to Chelsea’s recent trend of signing players on long-term contracts.
Signing players on extended contracts allows Chelsea to spread the player’s transfer fee over the duration of that deal when submitting their annual accounts.
That means £89million signing Mykhailo Mudryk will be valued at £11million-a-year during his eight-and-a-half-year contract.
UEFA must set a five-year limit over which a transfer fee can be spread.
Clubs will still be able to offer longer deals under UK regulations, but their transfer fee cannot be spread beyond the first five years.
The change to the FFP rules will come into effect over the summer and will not apply retrospectively.
French defender Benoit Badiashile and Ivorian striker David Datro Fofana both signed six-and-a-half-year deals earlier this month and Noni Madueke signed a seven and a half year contract after the arrival of the Ukrainian winger.
Defender Wesley Fofana has moved to Stamford Bridge on a seven-year contract and left-back Marc Cucurella signed a six-year contract last summer. Raheem Sterling’s deal is five years.
Madueke’s transfer has taken Chelsea’s spending since last summer to almost £450million, but the players’ long contracts will help them comply with regulations.
The Blues must adhere to two sets of regulations – the Premier League’s profit and sustainability rules and, as they regularly play in European competition, UEFA’s FFP regulations.
Under current UEFA rules, clubs can spend up to €5m (£4.4m) more than they earn over a three-year period. They can exceed that level to a limit of €30m (£26.6m) if fully covered by the club owner.
UEFA has a long list of potential sanctions for clubs that break these rules, ranging from warnings to fines and even the loss of European titles.
However, new UEFA rules introduced last June limit club spending on wages, transfers and agent fees to 70% of their revenue, although allowable losses over a three-year period have reached €60 million. euros (£49.96 million).
A phased implementation of the regulations has been agreed, with the percentage set at 90% in 2023-24 and 80% in 2024-25 before dropping to 70% in 2025-26.
The Premier League’s separate profitability and sustainability rules allow for total losses of £105million over a three-year period. Any club that posts losses above that figure could face penalties, including hefty fines or even a points deduction.
FFP regulations and financial sustainability rules aim to operate the game in a way that does not put clubs at risk.
UEFA, as the regulator, feels it is its responsibility to ensure that the game is conducted in such a way that clubs are not at risk of overstretching themselves.
By amortizing players over a longer period, clubs limit their scope for future spending because the value of those players declines more slowly than it normally would.
The feeling is that Chelsea are such a high-profile example that if others followed they could get themselves into trouble.
