Premier League Changes Financial Rules – Reacting to Chelsea
The Premier League is responding to the transfer activities of FC Chelsea and has decided to limit the period for the depreciation of transfer fees. Over the past year and a half, FC Chelsea has broken national and international records by spending a total of 1.08 billion euros on players such as Enzo Fernández (22) and Moisés Caicedo (22). One factor contributing to Chelsea’s compliance with the Financial Fair Play of the Premier League is their strategy of providing players with extremely long contracts. This allows transfer fees to be depreciated over a period of up to eight years in small installments (Background: How Chelsea’s transfer system works), including contracts extending until 2031.
However, this will no longer be possible in the future. According to “The Athletic,” the majority of Premier League teams agreed on Tuesday to introduce a maximum depreciation period of five years, regardless of the contract duration. Even Chelsea supported this rule change.
This means that, for example, a player Chelsea signs in the winter for 100 million euros, with a contract duration until 2031, will no longer be recorded in the profit and loss statement at 12.5 million euros per year but at least 20 million euros. Other clubs, such as SSC Napoli, have previously depreciated transfer fees progressively, claiming a larger share in the first year than in subsequent years.
It is important to note that this rule change does not apply retroactively to Chelsea and other clubs that have applied this practice. The adjustment only applies to future transfers. The UEFA had already decided in the summer to introduce a five-year depreciation limit in its rules for financial sustainability. However, the Premier League acts at the national level with its own regulations, stating that no more than 105 million euros in losses can be incurred over a three-year period.
The UEFA had previously introduced a “squad cost control,” stipulating that from 2025, clubs can only invest 70 percent of their revenues in a calendar year in player salaries, transfers, and agent fees. Violations of these rules can result in fines or exclusion from European competitions.
Regarding Chelsea’s massive investments, a source from UEFA circles expressed concerns to “The Times” in January: “If other clubs do the same with eight-year contracts, it will be chaos, so we have to protect them.” This simply shifts the problem into the future when clubs may be stuck with high-wage players or fail to make significant profits on a sale after three or four years because a large portion of the transfer fee has not yet been amortized.
On a national level, FC Everton in the Premier League recently had points deducted, and an investigation is underway against the triple champion Manchester City. There, no more than 105 million pounds (currently 122 million euros) in losses are allowed over a three-year period.
