Chelsea have spent £220m on two players – now financial trouble is on the horizon

Todd Boehly at Stamford Bridge before Chelsea's game against Liverpool - Chelsea have spent £220m on two players – now financial trouble is on the horizon
Chelsea have invested heavily in central midfield to strengthen Mauricio Pochettino’s squad – Reuters/Tony O’Brien

Chelsea’s £115 million British record deal for Moises Caicedo all-but-guarantees further player outgoings to ensure the club can qualify for Europe next season.

The club was already facing a projected £100m black hole in financial fair play financing from missed Champions League broadcasting and ticketing revenue this season.

So why are Chelsea doing the £115m deal?

Efforts to balance the books remain within reach, insiders maintain, largely due to Chelsea’s successful academy. Potential departures of homegrown players Trevoh Chalobah and Conor Gallagher would add to the pure £75 million profit the club can already record on Mason Mount and Ruben Loftus-Cheek.

However, the Caicedo signing remains a particularly expensive deal to offset against the Uefa bean counters despite his eight-year contract.

In June, the governing body closed a loophole that previously allowed Todd Boehly and Co to spread their big spending across long-term contracts handed to new signings.

Caicedo’s initial eight-year contract is just six months shy of the record eight-and-a-half year deal handed to Ukraine winger Mykhailo Mudryk in January, although it does have the option of an additional 12 months.

Under amortisation – the process of gradually writing off the initial cost of a player – Chelsea could list the £80 million Mudryk fee as £9.41 million per year.

But Caicedo is much more expensive under the new rules, which would be recorded at a minimum £23 million per year as amortisation is now limited at five years.

The Uefa rule only comes into effect should the club qualify for Europe, ensuring Chelsea – having finished 12th last season – have extra time to prepare.

More sales are needed – but meeting FFP is possible

However, after a summer where the club restored some balance on the previous season’s £585 million of investment, further departures will be needed on top of the current tally of 12, recouping an estimated £215 million in fees.

Kieran Maguire, a lecturer in football finance at Liverpool University, suggests a €60 million (£51.64 million) financial fair play loss over three years, as well as the new 70 per cent wages to income calculation, remains within reach.

“With all the concentration on the Chelsea in-door, people are ignoring the out-door which indicates player sales of £1.2 billion since 2013-14,” he calculates.

But further player outgoings are inevitable, experts add. Swift approval from the Premier League for a proposed £40 million-plus shirt sponsorship company with start-up company Infinite Management is also required.

Stephen Taylor Heath, head of sports law at JMW Solicitors, said: “Chelsea’s deal for Moises Caicedo may not necessarily fall foul of the new Uefa rules on amortisation as the contract length and period over which the transfer fee can be paid are two separate things. The new Uefa rule outlines that a fee can only be spread over a maximum of five years, so there would only be an FFP breach if Chelsea tried to apportion the cost across a period longer than the timeframe allowed in order to be on the right side of Uefa’s new financial sustainability regulations. These laws include a squad cost rule which incorporates the value of the player as part of the squad for the purpose of the regulations and needs to be assessed by reference to the new rule.”

Fifa has been pushing for contracts to be within five years, but the world governing body accepts longer contracts are permitted if domestic law allows it.

“A question may be asked as to why an eight-year deal is being agreed if amortisation is only possible over five seasons, but that may be due to market forces and other teams being interested in the player,” adds Taylor Heath

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