How Chelsea have managed to comply with FFP rules despite potential £300m-plus January transfer spending spree

Chelsea's lavish spending in transfer windows is nothing new but for anyone who might have thought their financial firepower might slow once Roman Abramovich was forced to sell up, Todd Boehly has provided an emphatic answer.

Since American businessman Boehly became the top dog at Stamford Bridge, he has ruffled Premier League feathers with his spending labelled as ‘Monopoly-like’ by rival supporters.

After buying the club in May 2022, Boehly has spent an eye-watering total of £476 million on 16 new players, including £88 million on Mykhailo Mudryk (inclusive of add-ons), £72 million on Wesley Fofana and £50 million on Raheem Sterling.

This has led to many fans wondering how Chelsea have managed to work their way around Financial Fair Play rules to finance deals.

In this transfer window alone, they have snapped up Mudryk, Benoit Badiashile, Noni Madueke, Andrey Santos, David Fofana and have brought in Joao Felix on loan as well as agreeing a deal that will see Malo Gusto join from Lyon at the end of the season. Many feel that FFP isn’t having the desired impact on the game anymore amid Boehly’s latest spree.

Chelsea have now also reopened talks to sign Benfica midfielder Enzo Fernandez in a beat-the-deadline move before tomorrow's 11pm cut-off as they look to exploit a loophole around the length of contracts before UEFA clamps down on it.

The signing of Fernandez could be an English transfer record but Chelsea are trying to spend the required £105 million in instalments, which would in turn allow the Blues to sign the Argentine on a longer contract to spread the cost. They have issued a number of long-term contracts in this window already, including Mudryk's in order to exploit the ruling.

Ahead of transfer deadline day, SPORTbible spoke to Football Finance expert Kieran Maguire to get an explanation on how Chelsea have managed to comply with FFP.

What was FFP set up for?

In theory, it was to reduce debt. But in reality, the concern was the fear that new owners of football clubs would buy success because they could afford to sign players and pay wages and therefore, they could recruit the cream of the crop.

FFP is based on profit and profit is revenue minus costs, it would limit the amount of losses and therefore it would limit the ability of these clubs to overspend, and make football a procession as opposed to a competitive game.

How have Chelsea been able to work within FFP?

Well, it's due to the way the accountants deal with player trading. If you sell a player, all of the profit is counted immediately. Chelsea have actually been very good at selling players.

They sold Hazard towards the end of his contract and got a lot of profit from that. Tomori and Abraham both came through the academy, they were pure profits.

When you sell a player, all of the profit goes into your FFP calculation straightaway. But when you buy a player, the cost of the player is spread over the contract. Now, Chelsea have been signing players on six, seven, and now we've got Mudryk with an eight-and-a-half-year contract.

So if you buy him for £88 million and he's on an eight-and-a-half-year contract. The cost in the accounts for FFP purposes is just £10 million in a single year. If you'd signed him on a four-year contract, it would have been £22 million but if you signed him on an eight-and-a-half-year contract it becomes £10 million.

Chelsea have done this with Fofana, they've done this for Cucurella, I think Sterling's on a five-year contract.

So Chelsea have taken this approach and this has allowed them to reduce their player purchase costs for FFP purposes. But their sales have not been affected because you take all of the sales profits immediately.

Alamy

There have been accusations that Chelsea have cheated the FFP rules, do you agree?

No, they've not cheated, they've exploited the rules. The rules do allow them to account for players.

Some people have said hold on, if you take a look at FIFA’s rulebook, it says you can’t sign a player on a contract which is longer than five years unless local laws allow it.

Well, in the UK there's nothing to restrict you, same in the US.

The rules are there, what Chelsea have done is that they've spotted there's a loophole and they've utilised that loophole to maximum effect.

Do you think FFP is having less impact on football nowadays?

I don't think so, there are some clubs that are trying to adhere to it.

It all comes down to the attitude of the owners, some want to break even or make a profit and some simply want to win trophies, if you just want to win trophies, you will try to exploit every single loophole.

I think the majority of club owners, especially the American owners do want to make a financial gain from promoting the club. Therefore, they're in favour of FFP.

Chelsea under Abramovich weren't particularly bothered about FFP because for Abramovich it was a hobby, it was an expensive hobby but he enjoyed it. They won two Champions Leagues and the Premier League on numerous occasions.

So it does come down towards the attitude of the owners. In the EU, most owners want to break even they don't want to fund huge losses. It comes down to the culture of the individual club as to whether clubs are in favour of FFP or not, but it has reduced losses, there's no doubt about that. It's made it more difficult for new competitive clubs to buy up the talent.

Newcastle couldn't do what Chelsea achieved under Abramovich in his first few years and what Manchester City achieved in their first few years under Sheikh Mansour. They have spent a lot of money by Newcastle standards, but not a lot of money by the standards of other clubs with these rich owners.

Alamy

How should UEFA amend the FFP rules to make them fairer for everyone?

I think first of all they've got to decide how you define fair.

It could be argued that in the Premier League, it's the same old faces every year, Therefore should we be addressing things and individual needs?

The best way to do that is to distribute the money more broadly between individual clubs. What we have at present is that if you win the Champions League you get €120 million in prize money.

That gives clubs a huge advantage because next season, they're more likely to get to the final phases of the Champions League and if you want to compete with them, then you've got to spend money.

I think the distribution of money does cause problems, it’s about coming up with something which is acceptable to everybody. Because if the big clubs don’t like it they'll go off and set up another Super League.

There have been reports of UEFA looking to limit the length of contracts clubs can sign a player on, is that the right step?

I think there is a case for that if the club does want to buy them on an eight-year contract.

For FFP purposes, it's treated as a five-year contract, that way the player gets protection from a long contract but FFP is not abused.

I've heard that those rules are coming in from summer 2023, that's a classic closing the stable door after the horse has bolted because Chelsea have got an advantage that other clubs won't be able to use.