Chelsea have become the envy of every other Premier League club due to their excessive spending under Todd Boehly.
The Blues have made over a dozen new signings in the summer window alone and show no signs of slowing down.
Boehly clearly means business as he continues to build a young and talented team in west LondonRex
Since the Boehly-led takeover of the Premier League club in May 2022, the London outfit have laid out well over £900million.
In 2023, Chelsea have broken the British transfer record twice, with the £106m capture of Enzo Fernandez in January, seven months before the club splashed out £115m for Moises Caicedo from Brighton.
With that in mind, many rival fans are left wondering how Chelsea are able to spend such huge sums while still complying with Financial Fair Play regulations.
How are Chelsea not breaking FFP?
The first and primary reason Chelsea are not falling foul of FPP is that they have found financial workarounds for their incoming players.
The club have handed many new stars extremely long-term contracts rather than the the traditional four or five year deals.
Record arrival Caicedo, for example, has penned an eight-year deal with an option of a ninth to join.
This process is called amortisation, which spreads out the cost of transfer fees over a longer period so that the annual cost is reduced.
UEFA closed this loophole this summer by including a five year maximum on contract length, but the Premier League has not yet followed suit.
Chelsea’s 12th placed finish last season also means that they do not have to adhere to UEFA regulations as they did not qualify for Europe.
Simon Jordan has outlined how that approach under Boehly has helped the Blues to stay within the laws of FFP, albeit with a loophole.
Liverpool lost out on Caicedo who opted to join Chelsea insteadGetty
The former Crystal Palace owner explained on talkSPORT: “Here’s what’s happening with their transfers. I think they’ll struggle to do it in a longer game, until they start getting some achievements on the pitch, but here’s where they really are.
“They’ve spent £800million on players, they’ve spent £600million last year and capitalised that over eight years because all of those players were on eight-year contracts, so all of a sudden that £600million spend is averaging at £75million per year because you’re dividing £600million by eight.
“He’s now had that change because the football fraternity has said ‘you can’t do that over eight years’, so they’ve rolled it back to five years.”
The second reason is more straight forward in that Chelsea have offloaded high earners such as Pierre-Emerick Aubameyang and Kalidou Koulibaly and replaced them with young stars on considerably lower wages regardless of club transfer fees.
Third, the Blues have then recouped over £200m in player sales this summer alone, with Kai Havertz fetching an accounting profit with his £65m with his move to Arsenal.
The German had two years left to run on the contract he signed at Chelsea following his £71m move in 2020 – meaning his remaining amortised book value was over £28m and his Gunners transfer resulted in over £36m profit.
The departures of Mason Mount and Ruben Loftus-Cheek for a combined £75m count as pure profit on the books as they came from the academy and didn’t command a fee – as would be the same for Trevoh Chalobah and Tottenham target Conor Gallagher.
Chelsea’s 2023 summer recruits:
Moises Caicedo [Brighton] £115m
Christopher Nkunku [RB Leipzig] £52m
Nicolas Jackson [Villarreal] £32m
Axel Disasi [Monaco] £38m
Robert Sanchez [Brighton] £25m
Lesley Ugochukwu [Rennes] Undisclosed
Kendry Paez [Independiente del Valle] Undisclosed
Dujuan Richards [Phoenix All Stars Academy] Undisclosed
Angelo Gabriel [Santos] Undisclosed
Alex Matos [Norwich] Undisclosed
Diego Moreira [Benfica] Undisclosed
Ishe Samuels-Smith [Everton] Undisclosed
Mount endured a tough first Premier League outing for UnitedGetty
Could Chelsea break FFP in the future?
This is where it gets trickier!
Should Chelsea fail to recoup Champions League money next season then they would need further player sales to avoid falling off the tightrope they are on.
Jordan told talkSPORT: “Now eventually, if Chelsea don’t pull up revenue and start to get back in the Champions League or generate other revenue streams, this is going to catch up with them sooner rather than later, but right now £800million worth of spend equates to £135million a year worth of transfer losses, then you’ve got £200million worth of transfer gains on Havertz, Mason Mount, Ruben Loftus-Cheek and on and on we go.”
Jordan added: “It’s a gamble in terms of the consequence of Financial Fair Play, so let’s have a look at what the consequence is.
“The consequence in Financial Fair Play is a financial consequence. Are we suggesting that people who have paid £2.5billion for a business and are funding £800million worth of transfers won’t take a smack on the knuckles like other clubs are getting right now? £10million here or £20million there.
Havertz could shine in midfield for ArsenalGetty
Olise looks like he could be the next young star heading to Stamford BridgeGetty
“I’m not suggesting that he’s aiming for that but right now people are saying how the hell can you spend £800million on transfer fees and not be breaching Financial Fair Play? Well, I’ve just told you.
“If you’re depreciating that at £135million a year and you’ve just sold £250-£260million worth of players over three transfer windows with most of those players – with the exception of Timo Werner who was sold at break even – are booking you a profit, you’ve just covered the last 18 months worth of potential losses and going into next year as well.
“In 18 months’ time if Chelsea are still spending at this level and are still carrying that level of depreciation and haven’t balanced the books by selling more players and haven’t got into the Champions League, then they’re going to get caught.”