Premier League introduces radical transfer fee rule change after Chelsea’s $1.12 billion spending frenzy

The new rule is brought in to curb the exploitation of a loophole.

Todd Boehly has spent over a billion dollars since taking over Chelsea FC (Image via Goal.com)

When Todd Boehly and his consortium purchased Chelsea in March 2022, many were unsure how their reign of the club would be. Would they be bringing out the big bucks like their previous owner, Roman Abramovic or would they now be conservative with it? Although they did continue the big spending like previously, they found a huge loophole that helped them avoid Financial Fair Play punishments.

Chelsea used to spend big on players and gave them long contracts, like Mykhailo Mudryk and Enzo Fernandez who have signed contracts till 2031, so that their transfer fee could be amortized to the length of their contract. Enzo was purchased for €121 Million and this fee was amortized to €14.24 Million a year on their accounts. This helped them avoid FFP sanctions and they currently have 16 players whose contracts run till minimum 2029.

According to The Athletic, a vote was made by the shareholders of the Premier League on 12th December to curb the exploitation of this loophole. With a majority vote, the PL decided to set a limit of 5 years for amortization. This means the transfer fee must be divided into 5 years irrespective of the contract length.

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If Enzo was purchased for €121 million under the current rules, the amortized amount Chelsea would need to put on their accounts would now be €24.2 million per year instead of €14.24 million per year. Previous signings before the introduction of this rule will not be affected by this rule. The signings with the long contracts can continue as they were, but Boehly will no longer be able to use this loophole.

Todd Boehly’s bizarre spending spree

When Todd Boehly first took over Chelsea, many were unsure how he would fare. The American had no previous experience managing a football club, previously working in Baseball and Basketball. But when it came to acquiring players, his previous experience came handy for Chelsea.

Todd Boehly Chelsea — Chelsea have spent €467.6 million in the 2023 summer window. (Image via Chelsea)

His first purchase was Raheem Sterling from Manchester City for €56.2 Million. Since then they have spent €225.7 million just in that transfer window. In the winter transfer window, they spent more €329 million, with Enzo Fernandez and Mykhailo Mudryk being their most expensive signing.

He went all out in the 2023 summer transfer window, spending €467.8 Million. Moises Caicedo was their most expensive signing that season with €116 million. With all these expensive signings, the team is struggling at 12th on the league table. Many reports suggest that Boehly might sack Mauricio Pochettino for their poor form as well.