Big Spending
Chelsea have been making big waves in the transfer market this summer, with their spending set to surpass £360 million after acquiring Moises Caicedo and Romeo Lavia. But how are the Blues able to comply with financial fair play regulations while shelling out massive amounts of cash?
Simon Jordan's Explanation
Simon Jordan, the former owner of Crystal Palace, shed some light on Chelsea's ability to bypass FFP restrictions. According to Jordan, owner Todd Boehly has cleverly accounted for their expenditure on the balance sheet, allowing them to continue their lavish spending spree.
The Impact of Player Sales
One strategy Chelsea has employed to offset their spending is the sale of first-team players. The likes of Kai Havertz, Mason Mount, and Mateo Kovacic have left the club for hefty sums, contributing to the balancing of Chelsea's financial books.
Spreading Costs Over Longer Contracts
Another factor that has allowed Chelsea to comply with FFP rules is the length of their players' contracts. In some cases, Chelsea has spread the cost of transfer fees over eight-year contracts. However, the Premier League has recently decided to ban this practice, limiting the spread to only five years.
The Numbers Game
Jordan breaks down the financial workings of Chelsea's recent transfer activity. He reveals that Chelsea spent a staggering £600 million last year, capitalized over eight years. However, with the change in FFP regulations, this year's spend will be reduced to around £300 million, with a further reduction to £60 million per year. Despite these losses, Chelsea has managed to sell £250 million worth of players over the past three transfer windows, resulting in a net profit for the club.
The Bottom Line
As long as Chelsea can keep up their current level of spending and continue selling players at a profit, they should be able to remain within the financial constraints imposed by FFP. However, if the club fails to achieve a balance between spending and selling players or fails to qualify for the Champions League, they could find themselves facing repercussions in the future.
