How Chelsea, despite a year-long lavish spending spree, are staying within financial rules | Football News

After Raheem Sterling danced past a gaggle of Luton Town defenders and expertly caressed the ball into the opposition’s goal late Friday night, Chelsea finally looked like a team which had spent £850m in the transfer market since American owner Todd Boehly took over the club in 2022.
Chiefly funded Clearlake Capital, a California-based private equity firm, the Blues have been spending money from a seemingly bottomless pit of wealth, smashing the British record transfer twice in the space of 8 months when they brought in Argentine World Cup winner Enzo Fernandez in January and more recently, Moises Caicedo from Brighton, both of whom cost south of £100m.
They have also brought in players such as Romeo Lavia, Chropher Nkunku, Axel Disasi, Nicolas Jackson, Robert Sanchez, Lesley Ugochukwu and Angelo in the 2023 summer transfer window alone. Even Manchester City coach Pep Guardiola seemed perplexed the amount of spendings a club which finished 12th in the Premier League last season were doing. “I couldn’t sit here if we spent what Chelsea spent in the last two transfer windows – you would kill me,” Guardiola said a few weeks back.
Chelsea’s Nicolas Jackson reacts during the English Premier League soccer match between Chelsea and Luton Town at Stamford Bridge stadium in London. (AP)
So, how were Chelsea managing to fork out these lavish amounts on new signings every transfer window since the Boehly-Clearlake takeover? Wouldn’t they be in trouble due to the Financial Fair Play rule? The answer lies somewhere in the middle.
Amortisation loophole
Chelsea have found a loophole when it comes to the Premier League’s profit and sustainability rules through a process called amortization which is a process of gradually writing off the initial cost of an asset (in this case, a player).

Behind the scenes with Moises Caicedo on signing day! pic.twitter.com/sIldHFDYnK
— Chelsea FC (@ChelseaFC) August 15, 2023
For example, the club had bought Ukrainian winger Mykhailo Mudryk for an initial fee of £89m with the player signing an eight-and-a-half-year contract. The fee would then be spread across these 8 and a half years which would cost the club just £10m a year and enable them to balance the books. This is the same way they have brought players like Caicedo and Lavia from Brighton and Southampton where they have been signed to huge long-term contracts.
Interestingly, this strategy the Blues has forced UEFA to change the rules regarding its financial sustainability regulations which will see the repayment of a player’s regration and transfer fee limited to five years, according to reports.

This season, however, Chelsea are not playing any European competitions so they are well away from the ambit of UEFA’s rules. But they need to ensure that they have a good, or even great, season which will ensure them to win trophies and qualify for Europe the next season due to the prize money attached with these competitions.
Chelsea’s Robert Sanchez in action (Reuters)
They also need to offload as many players as possible who are surplus to requirement to balance their wage bill. Chelsea have already made their share of profits from the sales of Kai Havertz to Arsenal and Mason Mount to Manchester United.
When Havertz signed for the Blues, he had cost £71m over a 5-year contract but after Chelsea sold him off to Arsenal for £65m with two years left on his contract, they pocketed a cool 36.6 million in profits. As for Mount, due to him being an academy graduate, the entire £55m that United paid for him went directly to Chelsea’s coffers.Most Read
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Kai Havertz joined Arsenal from Chelsea for £65m (Reuters)
Even though this policy seems to be working in the short term, its long-term ramifications are something Chelsea will have to contend with. The players who have been signed to long term contracts might be injured or lose their hunger to succeed due to their guaranteed financial stability. In case of an injury, it’ll also be pretty difficult for the club to offload these players due to these lengthy contracts.

For any warnings regarding the pitfalls of amortisation, one only needs to look at FC Barcelona’s self-imposed financial crisis, which came directly as a result of inflated transfer fees (which were spread across many years) and exorbitant, unnecessary player wages.
So, even though Chelsea can boast of finally bagging their first win of the season after defeating a newly-promoted club like Luton, they still have a long way to go on the field, as well as off it.