How Chelsea have stayed within FFP rules despite £500m transfer assault

A British-record deal to bring in Enzo Fernández for more than £105 million will take Todd Boehly and Clearlake Capital’s spending past £500 million in just two windows.

Here Telegraph Sport explores why Chelsea are safe – for now – from financial fair play penalties.

The three reasons Chelsea believe they are not at risk 

The club is expected to account for around a quarter of total expenditure across English football in recent months, with co-controlling owner Behdad Egbhali and director of global talent and transfers Paul Winstanley clinching final deals on Tuesday. 

Yet despite blowing their rivals out of the water, there is a detailed strategy at the club to ensure there is no danger of the club immediately breaching financial fair play rules. Spreading payments on incoming transfers across several years, recent success and selling academy graduates are the factors which have convinced the club they can keep the Uefa number crunchers at bay.

Lengthy contracts and staggered payments 

Chelsea have been smart in splashing the cash while Uefa rules still allow total fees to be spread across contracts. Fernández will not be declared to the bean counters as a £105 million-plus one-off buy. The club has initially signalled to Benfica it would stagger the deal across one large payment and five later payments. However, in terms of FFP, the payments will be spread out even further as Fernández, it can be safely assumed, would be announced on a lengthy playing contract. 

It had already been an incredible January transfer window for Chelsea, having signed Mykhaylo Mudryk for £88 million, Joao Felix on loan, Benoît Badiashile and Noni Madueke, plus a host of promising youngsters. But Mudryk signed an eight-and-a-half year contract while France defender Badiashile penned a seven-and-a-half year deal after his £35 million move from Monaco. Amortisation allows the Mudryk fee to be divided over the eight years of his deal, working out as roughly £10m a year.

Success in recent years and a changing FFP system 

Recent on-field success – the Champions League and Super Cup in 2021 – represented a healthy cushion against losses ahead of the Boehly consortium takeover. Effectively, those two trophies gave the club an additional £119 million over the current system assessing losses over a three-year period. With that initial security, Chelsea are now spending heavily while Uefa’s new Financial Sustainability and Club Licensing Regulations (FSCLR) are introduced in a staggered format. 

A new “squad cost control” limit where clubs will be limited to spending 70 per cent of their revenue in a calendar year on player wages, transfers and agents’ fees will eventually be introduced.  But for this year, the limit is a relatively generous 90 per cent. The loophole allowing those deals to be secured over such long contracts is also likely to be slammed shut. European football’s governing body looks set to fix a five-year maximum for the length of time over which a player’s transfer fee can be spread by the summer transfer window.

Regardless of where Chelsea finish, Boehly has made good on a promise he issued to fans as his protracted takeover finally completed in May last year. The deal to buy the club was worth a total £4.25 billion, factoring in investments the new owners had promised to deliver. The same big spending approach he had delivered with success at the LA Dodgers had been a key part in him winning the race to buy the club. Boehly then told fans investment in talent would be maintained to “build on Chelsea’s remarkable history of success.”

The world-leading academy producing ‘pure profit’ 

The current ownership inherited one of football’s finest academies. Selling on graduates can then be declared as pure profit under sustainability rules. Tammy Abraham and Fikayo Tomori brought in fees of more than £60 milllion combined as they were sold to Serie A clubs in recent sales. Kieran Maguire, a lecturer in football finance at Liverpool University, says upcoming sales of homegrown talent will play a major part if Chelsea want to continue spending at their current rate.

“Abraham, Tomori are pure profit on sales,” he told Telegraph Sport. “Conor Gallagher, Loftus-Cheek and Hudson-Odoi could be potentially the same. Crucially, you can take all the profit in the year of sale but spread purchases over the life of contract via amortisation.” The potential sale of Gallagher for £40 million would effectively match “£280 million spending on players with seven year deals”, Maguire adds.