April 14, 2024

Premier League clubs no longer be able to spread cost of a transfer fee across more than five years of a player’s contract; Chelsea signed a number of players on lengthy deals in the summer of 2022 and in January of this year; rule change will not be backdated

 

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Premier League clubs will no longer be able to spread the cost of a transfer fee across more than five years of a player’s contract.

In June, UEFA announced it had closed a loophole allowing clubs to spread a fee over a longer period, and on Tuesday the Premier League confirmed its clubs had now voted to amend competition rules to bring the league in line with European regulations.

Chelsea signed a number of players on lengthy deals in the summer of 2022 and in January of this year, including handing eight-and-a-half-year contracts to Enzo Fernandez and Mykhailo Mudryk in January. The rule change, however will not be backdated meaning such deals will be unaffected.

If transfer fees are spread evenly over the course of a contract, it means the longer it is, the smaller the annual payments recorded on the club’s accounts are.

For instance, a £100m fee would be amortised at £20m a year with a five-year contract, but at only £12.5m a year if a deal was eight years.

A league statement read: “Going forward, a five-year maximum will apply to all new or extended player contracts.”

Clubs also approved a rule amendment empowering the league’s board to block a club from registering new players where they owe a transfer debt to another Premier League or EFL club until the debt is paid.

The board also has the option to deduct the amount owed from the club’s entitlement to the central league funds.

Dorsett: Spreading the cost won’t impact big transfer fees

Rob Dorsett explains why Premier League clubs can no longer spread the cost of a transfer fee across more than five years

Sky Sports senior report Rob Dorsett:

“It’s complicated, but it’s important, so if you’re a Chelsea fan read on.

“The Premier League clubs have today voted on a very significant new rule. The length of time with which a club can spread the cost of a transfer fee is going to be limited.

“Up until now, you could sign a player for 10 years, and spread the payment of that contract over 10 years. It’s called amortisation.

“From now, you’re only going to be able to spread the cost across five years.

“Look at Mykhailo Mudryk, for example, who signed the longest contract in Premier League history, and he was signed for £88.5m. In old rules, because it was an eight-year contract, that fee would only cost Chelsea about £10m a year.

“Chelsea have used it carefully and cleverly. Crucially, this isn’t going to be backdated. Only players signed from now are affected.

“This brings the Premier League in line with UEFA rule, who already had this in place. It makes clubs more sustainable and reduces their risk.

“Nobody wanted to punish Chelsea here, which is why they’ve decided not to backdate. Crucially, it means Chelsea have had the advantage of putting these players on long contracts, but they won’t be allowed to do that again with new players.

“I don’t think it will have an impact on transfer fees. It’s just an accounting procedure. Clubs can account for the player they’ve signed. Clubs can still make longer deals, but accounting-wise, the cost can only be spread over five years.”

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