Chelsea contracts to lead to Financial Fair Play rules change by Uefa

Mykhailo Mudrik
Mykhailo Mudric made his Chelsea debut as a substitute against Liverpool on Saturday.

UEFA to change Financial Fair Play rules in response to Chelsea’s tendency to sign long-term contracts

Signing players to extended contracts allows Chelsea to spread the player’s transfer fee over the duration of that contract when submitting their annual accounts.

This means £89m for Mykhailo Mudric His eight-and-a-half-year deal is worth £11m-a-year.

UEFA sets a five-year limit over which the transfer fee can be spread.

Clubs can still offer long-term contracts under UK rules, but cannot extend transfer fees beyond the first five years.

The change to FFP rules will come into force in the summer and will not be applied retrospectively.

Defender of France Benoit Badiashil and the Ivory Coast striker David Datro Fofana both signed six-and-a-half-year deals at Chelsea earlier this month and Noni Madueke Ukrainian winger Mudrik joined on a seven-and-a-half-year deal after his arrival.

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protector Wesley Fofana has moved to Stamford Bridge on a seven-year contract and left back Mark Cucurella signed a six-year contract last summer. Raheem Sterling’s contract is five years.

Madueke’s transfer has cost Chelsea around £450m since last summer, but the players’ long contracts will help them stay within the rules.

The Blues have to adhere to two sets of rules – the Premier League’s revenue and sustainability rules and UEFA’s FFP rules, as they regularly play in European competitions.

Under current UEFA rules, clubs can spend up to €5m (£4.4m) more than they earn over a three-year period. They can exceed this level by up to €30m (£26.6m) if this is fully covered by the club’s owner.

The governing body has an extensive list of possible penalties for clubs that break these rules, ranging from warnings to fines and even being stripped of European titles.

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However, new Uefa rules introduced last June limit clubs’ spending on wages, transfers and agents’ fees to 70% of their revenue, but allowed losses of up to €60m (£49.96m) over a three-year period.

It has been agreed that the regulation will be phased in, with the percentage rising to 90% of income in 2023-24 and 80% in 2024-25, before falling to 70% in 2025-26.

The Premier League’s separate rules allow a total loss of £105m over a three-year period. Any club that declares losses in excess of this figure may be subject to fines, including heavy fines and even points deductions.

UEFA action clubs are not in danger – analysis

Some may wonder why UEFA is getting involved, thinking Chelsea or any other club should be able to offer deals they like as long as they follow the rules.

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However, it is believed that the change from Financial Fair Play rules to financial stability was made to make the game work in a way that did not put clubs at risk.

UEFA, as the regulatory body, feels it is its responsibility to ensure that the game is played in such a way that clubs are not at risk of over-exertion.

By amortizing players over a longer period of time, clubs are limiting their scope for spending in the future, as the value of those players depreciates more slowly than usual.

The feeling is that Chelsea are setting such a high example that if others follow, they may find themselves in trouble.

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