Todd Boehly’s latest transfer window as the owner of Chelsea Football Club has shocked the footballing world
A total of €363,100,000 was spent on eight new players, including world cup phenom Enzo Fernandez, who transferred to Chelsea FC for a reported fee of €120,060,000.
Many football fans expressed their concerns on social media platforms as well as online chat rooms like Reddit. “How is this ever possible with FFP,” said Rick, an avid football fan who monitors everything that happens in the English Premier League.
FFP refers to UEFA’s Financial Fair Play policy, which was introduced in 2011. The policy has changed throughout the years, but the basic principle has remained the same; It states that a football club can only amount to a total loss of €60,000,000 every three years.
Transfers are generally the most prominent sources of income, as well as expenditure for football clubs.
Chelsea FC has reportedly spent €676,410,000 on transfer fees since the summer of 2022. Whilst player sales during the same time span only brought in €68,570,000. That amounts to a transfer fee loss of €543,660,000 during a seven-month period. But Chelsea FC seems to have found a way around the FFP regulations.
Chelsea FC’s strategy
Chelsea FC offers their new signings long-term contracts so they can spread out the transfer fee in their financial reports. For example, offering a player that costs €120,000,000 a contract for eight years, means that the expenditure of that transfer fee will appear in a club’s finances as €15,000,000 spent each year. Whereas offering the same player a three-year contract will result in an expense of €40,000,000 each year.
This allows Chelsea FC to bypass UEFA’s FFP rules concerning the maximum net loss of €60,000,000 every three years. But it comes at a cost.
“You take out a mortgage on the future. You are tied to those players for a long time and that is a risk,” said Job Gulikers, professor at the Hogeschool van Arnhem and expert on football finance in an interview with NOS.
The Groningen Observer contacted UEFA to get a response regarding Chelsea FC’s transfer policy. “Clubs will be free to negotiate the length of the players’ contracts in accordance with the FIFA and national regulations in force,” UEFA replied.
Nonetheless, high transfer fees pose serious risks to football clubs. In the current market, clubs are often forced to overpay for players that are in high demand. As of January 31st 2023 Transfermarkt.com, the leading global football player evaluation website, valued Enzo Fernandez at €55,000,000. Chelsea FC paid more than double to ensure his signature.
A player’s decision to join a football club also depends on the contract they’re offered. Long-term contracts, although being more attractive to players because of job security, pose a problem for football clubs that are not in the financial position to offer these contracts. It also limits Chelsea FC’s future endeavors on the transfer market, as they have to sell more players to generate funds for future transfers.
UEFA is currently looking for solutions to combat this issue. “UEFA is discussing to harmonize the length of the amortization period (max 5 years) for the purpose of the new financial sustainability regulations. This is to ensure equal treatment between all clubs participating to the UEFA competitions and for financial sustainability reasons,” they told The Groningen Observer.
The success of Chelsea FC’s transfer window is yet to be determined. If their new signings significantly contribute to their performances in domestic and European competitions their risk will have paid off. But if the players’ on-pitch performance is not up to standard, Chelsea FC will be stuck with players they’ll either have to sell at a substantial loss or not play whilst paying their wages.
Regardless, many Chelsea fans don’t seem to be too concerned about their club’s spending spree. They’re mostly excited about the new players joining their club. “Trust the process,” said Matthijs, an enthusiastic Chelsea fanatic on Twitter.