UEFA has officially closed the amortisation loophole that Chelsea used during a record-breaking £600million transfer spend across the last two transfer windows.
Chelsea, under the guidance of co-owner Todd Boehly while acting as sporting director, offered new signings long contracts of seven to nine years to enable the club to spread the cost of the deal across a longer timeframe.
For example, Mykhailo Mudryk’s £88million signing will be split across his eight-and-a-half year contract so just £10.35m will be classed as expenditure each year.
That trick has today been outlawed, though, as UEFA move to “improve financial sustainability” in the game. From July 1, clubs can still offer contracts of a similar length but can only spread the cost of the transfer across a maximum of five years. Deals made before July 1 remain unchanged.
Uefa said in a statement: “The amortisation of the player’s registration will be limited to five years in order to ensure equal treatment of all clubs and improve financial sustainability. In case of contract extension, the amortisation can be spread over the extended contract period but up to a maximum of five years from the date of the extension.
“Such a change will not restrict the way in which clubs operate (i.e. clubs that are allowed by their national governing bodies to conclude player contracts for a period exceeding five years can continue to do so) and will not apply retroactively to transfer operations that have already taken place.”
UEFA has also moved to prevent clubs from inflating transfer fees by using 'swap' deals, which involved a player being used as part or full payment for another player.
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Uefa’s statement added: “With regard to the player exchange transactions, the regulation specifies that it is the responsibility of the clubs to assess whether a transfer operation should be qualified as a swap, in which case it shall be accounted for in line with the international accounting standards. This approach aims at dissuading that transfer operations take place with the sole intent to artificially inflate transfer profits rather than for sporting purposes.
“It is now required that clubs’ auditors confirm the correct application of the described accounting requirements and report any discrepancy should this not be the case.”
