Following Chelsea’s £115 million transfer of Moises Caicedo over Liverpool, the Premier League is considering changing the rules.

Chelsea are using the tactic of offering longer contracts to reduce annual depreciation costs

The Premier League could be set to align its profit and sustainability accounting rules with those of UEFA following Chelsea’s £115m move for Liverpool transfer target Moises Caicedo.

The 21-year-old midfielder completed his move to Stamford Bridge on Monday after turning down a chance to join Liverpool. The Reds accepted a £111m offer from Brighton & Hove Albion on Friday. On Sunday, however, Chelsea returned with an improved offer of £115 after Caicedo expressed his desire to join them via Liverpool.

The acquisition of the Ecuador international and the likely signing of another Reds transfer target in Southampton’s Romeo Lavia for £50m plus add-ons will take Chelsea’s spending to over £900m since Todd Boehly and the Clearlake club Capital have recaptured.

May 2022. Chelsea’s spending, which has seen them break the UK transfer record twice this year, is not without risk, despite the high number of players they have sold this summer, as they are likely to be carefully monitored for potential infractions. of the Premier League profit and sustainability rules.

Chelsea had adopted the tactic of offering new signings seven-, eight- and nine-year contracts, the longest terms allowing them to amortize the cost of the transfer fee over a longer period of time. Guaranteed transfer fees, regardless of how they are paid, are amortized for accounting purposes over the life of a deal, the longer the deal lasts, the lower the annual cost on the balance sheet.

That practice was eradicated earlier this summer by UEFA, European football’s governing body, with clubs participating in European competitions now only allowed to write off transfer fees for up to five years, although the offer of contracts longer than this period will continue to be permitted.

But after finishing 12th last season following a poor season which saw them sack both Thomas Tuchel and Graham Potter and end the season with Frank Lampard in charge, Chelsea are out of European competition this season which means the rules viability criteria do not apply. at least for them for now.

Premier League profit and sustainability rules apply to all member clubs and still allow amortization over periods longer than five years, although European clubs must be bound by the new five-year limit to be able to compete.

Chelsea have offered Caicedo an eight-year deal with an option for a ninth, meaning they could write off the £100m guarantee to £12.5m-a-year, while Liverpool would have him got to £20m a year.

This has given Chelsea a financial advantage, at least for now, due to their poor performance last season, although they will be forced to adjust their accounting practices to match those of UEFA if they qualify. for European competition next season, with retrospective measures for Caicedo a possibility.

According to the Daily Mail, the Premier League will align its transfer fee amortization accounting rules with those of UEFA by next summer in response to pressure from some clubs unhappy with Chelsea’s approach to the transfer market. transfers.

By introducing longer contracts and allowing transfer costs to be amortized over time, Chelsea have given themselves some leeway in the market for the time being, although they are likely to face restrictions significant spending in the coming seasons, compared to the gigantic spending of the last 12 months.

The gamble Boehly and Clearlake are making is based on the belief that the young talent now gathering will take Chelsea to the top and lead them back to Champions League riches, enabling the club to maximize revenue opportunities.

The proposals, says the Mail, will be discussed at a Premier League shareholders’ meeting later this season, where they are likely to receive backing from many member clubs.