How Chelsea could end January transfer window in PROFIT despite Premier League record bid for Enzo Fernandez that could push total spending under Todd Boehly to £650million
Chelsea’s spending under Todd Boehly could tip £650million if they get a deal for Enzo Fernandez over the line.
But, incredibly, the London club could technically end the January transfer window in PROFIT.
The American has only been in charge for seven months and has spent big, big bucks, but a clever accounting trick means the books at Stamford Bridge are still fairly balanced.
Boehly has obliterated spending records in only his few short months in charge of the purse strings at Chelsea.
They smashed the record for the biggest-spending summer, and have followed that up by breaking the record for the biggest-spending January, too, with a total of seven signings so far - and counting.
Bringing in half a team’s worth of players for almost £215m doesn’t seem enough for the Blues, with World Cup young player of the tournament Fernandez expected to arrive, although talks are tense.
Having seen a chase for the Argentine go nowhere earlier in the window, Chelsea have relaunched their bid for the 22-year-old Benfica midfielder and are now close to a deal worth up to £115m.
That would be another record broken by billionaire Boehly, with that fee smashing the previous record held by Man City and the £100m they paid to Aston Villa to sign Jack Grealish in 2021.
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It would also take their January spending to almost £330m - which has left rival fans scratching their heads.
How can Chelsea afford to spend so much money - they have spent more than LaLiga, Serie A, Bundesliga and Ligue 1 combined in this window - and still comply with Financial Fair Play regulations?
It seems baffling that they have been able to get away with it.
But - although there are some drawbacks to Chelsea’s plan, and as hard as it is to believe - they could actually end January in profit.
How? It’s all down to the bonkers contracts Chelsea are handing out to their new players.
All of Graham Potter’s new recruits in January have signed deals to keep them at Stamford Bridge for six years or more.
Playing the long game - Chelsea's January contracts
- Mykhailo Mudryk - £88m, seven-and-a-half year contract
- Noni Madueke - £29m, seven-and-a-half year contract
- Benoit Badiashile - £33.7m, seven-and-a-half year contract
- Malo Gusto - £31m, six-and-a-half-year-contract
- David Datro Fofana - £10.5m, six-and-a-half year contract
- Andrey Santos - £11m, 'long-term' contract
The way finance works in the football world currently means clubs are allowed to spread the cost of a transfer fee over the length of that contract.
Their biggest signing so far, Mykhailo Mudryk, signed a deal rising to £88m and was pinned down to a seven-and-half year contract. It means Chelsea have been able to divide that transfer fee equally between those years.
So this method means the Ukrainian winger’s signing will only read as around £11m in the club’s yearly accounts.
The process is called amortisation - in basic terms, gradually writing off the initial cost of an asset or debt with regular payments.
It also means Chelsea could, in their financial accounts for this transfer window, end January in profit with Conor Gallagher subject to Premier League interest.
The 22-year-old has been linked with moves to Everton, Newcastle and his on-loan club last season Crystal Palace, with a bid of around £45m made by the Toffees.
That would be written in their finances as 100 per cent profit for Chelsea, given he is a homegrown player and graduated from their academy.
This way of working makes a great deal of sense and looks to have been a masterstroke from money-maker Boehly.
But their methods have not gone unnoticed by the powers that be, with UEFA trying to put in new restrictions to ensure clubs don’t copy this model and find a way around FFP.
Their sheer number of signings since the start of the season - 16 in total - also have given Potter a bit of a headache, as he can’t actually have all of his new players available for selection.
Chelsea will have to make a choice which of their signings they register for their Champions League squad for the rest of the season.
Chelsea signings since Boehly takeover
- Mykhalo Mudryk, £88m - Shakhtar Donetsk
- Wesley Fofana, £72m - Leicester City
- Marc Cucurella, £58m - Brighton and Hove Albion
- Raheem Sterling, £50m - Manchester City
- Kalidou Koulibaly, £34m - Napoli
- Benoit Badiashile, £33.7m - Monaco
- Malo Gusto, £31m - Lyon
- Noni Madueke, £29m - PSV
- Cesare Casadei, £17.5m - Inter Milan
- Carney Chukwuemeka, £16m - Aston Villa
- Andrey Santos, £11m - Vasco da Gama
- Pierre-Emerick Aubameyang, £10.5m - Barcelona
- David Datro Fofana, £10.5m - Molde
- Joao Felix, Loan (£9.5m) - Atletico Madrid
- Gabriel Slonina, £8m - Chicago Fire
- Denis Zakaria, Loan (£2.5m) - Juventus
UEFA rules prevent clubs from fielding drastically improved teams in the knock-out stages of the competition, with a maximum of three new players allowed to be registered mid-season.
It means many of their expensive additions may be prevented from playing top flight European football this season after signing for the Blues, while members of their existing squad could be benched in favour of including some of the new blood.
It means a headache for Potter, who could feasibly have two completely different XIs to choose from in European and domestic competition for the rest of the season.
Given Chelsea are down in tenth place in the Premier League, it’s fair to say that the Blues need all the help they can get to rise up the table closer to where they want to be.
But it will not stop rival fans from questioning whether it is actually fair they can do this in the first place.
However, football finance expert and author of The Price of Football Kieran Maguire joined White and Jordan’s deadline day show on talkSPORT to explain why it's not a loophole, it's actually an investment choice from the Blues.
But it's a risk - one that other football club owners are aware of but are not willing to take.
“Under the accounting rules if you sign a £50m player on a three-year contract, you spread the cost over the life of the contract, so it usually works out to £16m or £17m a year," said Maguire.
"But Chelsea have secured players on long-term contracts, so if you spread that over an eight year contract then it drops the cost to around £6m a year.
“They have taken advantage of what might be seen as a bit of slackness in the FFP and accounting rules.
“But, when they sell a player all of the profits go into the accounts immediately. So if they sold Conor Gallagher today for £40m and they’ve got players coming in on seven-year contracts, that would allow them to spend £280m and it would be net £0 as far as FFP in the transfer market is concerned.
“I think they are fairly close to the limits as far as 2022 is concerned but, remember, they sold Tammy Abraham and Fikayo Tomori - both players came through their academy, so that £70m profit has fixed the problem.
“It’s not a loophole, it’s an investment,” Maguire added.
“Chelsea believe these players are going to increase in value over the years, so that means in two or three years time should Real Madrid or Barcelona come calling, then you’ve got Mudryk with five years remaining on his contract, so Chelsea in theory can be able to generate maximum sales value from the players, providing they’re good.
“The down side is what happens if they’re another Winston Bogarde, or other similar players who haven’t delivered?”
But why are Chelsea the only club doing this?
Maguire explained: “Because Chelsea are taking a very big risk.
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“Other clubs tend to look at the maximum amount of commitment, they know player values cannot be guaranteed indefinitely and therefore they don't want to commit themselves for seven or eight years.
“It also effectively ties up spots on your 25-man squad for s significant periods of time, and other owners don’t seem to want to go down that particular route.”