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Chelsea transfer news: How can the Blues keep spending and stay within financial rules?

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Chelsea’s latest signing of Romeo Lavia for £53m from Southampton puts their total spending under owner Todd Boehly at more than £850m.

With an average age of 20 years and eight months, their all-new midfield three of Lavia, Moises Caicedo and Enzo Fernandez cost more than £260m and follows the new owners trend of lavish spending on young players over long contracts.

According to Transfermarkt, Chelsea have spent about £430m more than the next-highest spenders Manchester United since the Boehly-led takeover in summer 2022.

That figure could even rise to £900m or beyond by the end of the transfer window on 1 September.

Many fans, both of the Blues and of rivals, are asking how the club can afford to keep buying new players without falling foul of Financial Fair Play rules.

BBC Sport has looked at the money spent and the rules in place in order to find out what exactly is going on.

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How much have Chelsea spent during Todd Boehly’s ownership?

Highest total transfer spend in world football, from summer 2022 to 15 August 2023
Chelsea £857.3m
Manchester United £374.4m
Arsenal £372.2
Tottenham £319.7m
Paris St-Germain £307.2m
Newcastle £291.3m
Bayern Munich £255.1m
Manchester City £233.2m
West Ham £223.1m
Liverpool £214.5m
Source: Transfermarkt

Chelsea have spent about £323m on eight players so far this transfer window, more than any other side in Europe, and have broken the record for the highest summer spend by any club in the world – eclipsing Real Madrid’s £292m in 2019.

That figure eclipses the £260m they spent last summer and the £288m spent in January 2023.

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They have spent about £175m on Brighton players alone, not including the reported £21m compensation paid to the Seagulls for manager Graham Potter and his coaching staff in September 2022, or the cost of sacking him seven months later.

The expense for new players has been offset to some degree by income made from sales, with about £280m brought in across the three most recent transfer windows.

A significant number of older players earning high wages, such as Kalidou Koulibaly, Mateo Kovacic and Cesar Azpilicueta, are among the squad members to have moved on, while the players who have been signed by the Blues have an average age of just over 21.

Summer 2022

Incomings: Marc Cucurella (Brighton, £60m), Raheem Sterling (Man City, £50m) Kalidou Koulibaly (Napoli, £33m), Carney Chukwuemeka (Aston Villa, £20m), Cesare Casadei (Inter Milan, £12m), Wesley Fofana (Leicester, £70m), Pierre-Emerick Aubameyang (Barcelona, £10.3m), Gabriel Slonina (Chicago Fire, £8m), Denis Zakaria (Juventus, loan).

chelsea

Outgoings: Timo Werner (RB Leipzig, 25m), Emerson Palmieri (West Ham, £13m), Billy Gilmour (Brighton, £7.5m), Michy Batshuayi (Fenerbahce, £2.5m), Kenedy (Real Valladolid, undisclosed), Andreas Christensen (Barcelona, free), Antonio Rudiger (Real Madrid, free) Marcos Alonso (Barcelona, free).

Total ‘net’ spend: £215.3m

Winter 2023

Incomings: Enzo Fernandez (Benfica, £107m), Benoit Badiashile (Monaco, £35m) Andrey Santos (Vasco da Gama, £10m), Joao Felix (Atletico Madrid, £9.7m loan fee), Mykhailo Mudryk (Shakhtar Donetsk, £89m), Noni Madueke (PSV Eindhoven, £30.7m), Malo Gusto (Lyon, £30.7m).

Outgoings: Jorginho (Arsenal, £12m)

Total ‘net’ spend: £301.1m

Summer 2023 (up to 15 August)

Incomings: Moises Caicedo (Brighton, £100m), Romeo Lavia (Southampton, £53m), Christopher Nkunku (RB Leipzig, £52m), Axel Disasi (Monaco, £35.8m), Nicolas Jackson (Villarreal, £32m), Robert Sanchez (Brighton, £25m), Lesley Ugochukwu (Rennes, £23.2m), Angelo (Santos, £13m).

chelsea

Outgoings: Kai Havertz (Arsenal, £65m), Mason Mount (Man Utd, £55m), Mateo Kovacic (Man City, £25m), Christian Pulisic (AC Milan, £20m), Kalidou Koulibaly (Al-Hilal, £19.8m), Edouard Mendy (Al-Ahli, £15.9m), Ruben Loftus-Cheek (AC Milan, £15m), Ethan Ampadu (Leeds, £7m), N’Golo Kante (Al-Ittihad, free), Cesar Azpilicueta (Atletico Madrid, free), Pierre-Emerick Aubameyang (Marseille, free), Abdul Rahman (PAOK Salonika, free).

Total ‘net’ spend: £101.3m

Summer 2022

Incomings: Marc Cucurella (Brighton, £60m), Raheem Sterling (Man City, £50m) Kalidou Koulibaly (Napoli, £33m), Carney Chukwuemeka (Aston Villa, £20m), Cesare Casadei (Inter Milan, £12m), Wesley Fofana (Leicester, £70m), Pierre-Emerick Aubameyang (Barcelona, £10.3m), Gabriel Slonina (Chicago Fire, £8m), Denis Zakaria (Juventus, loan).

Outgoings: Timo Werner (RB Leipzig, 25m), Emerson Palmieri (West Ham, £13m), Billy Gilmour (Brighton, £7.5m), Michy Batshuayi (Fenerbahce, £2.5m), Kenedy (Real Valladolid, undisclosed), Andreas Christensen (Barcelona, free), Antonio Rudiger (Real Madrid, free) Marcos Alonso (Barcelona, free).

Total ‘net’ spend: £215.3m

chelsea

Winter 2023

Incomings: Enzo Fernandez (Benfica, £107m), Benoit Badiashile (Monaco, £35m) Andrey Santos (Vasco da Gama, £10m), Joao Felix (Atletico Madrid, £9.7m loan fee), Mykhailo Mudryk (Shakhtar Donetsk, £89m), Noni Madueke (PSV Eindhoven, £30.7m), Malo Gusto (Lyon, £30.7m).

Outgoings: Jorginho (Arsenal, £12m)

Total ‘net’ spend: £301.1m

Summer 2023 (up to 15 August)

Incomings: Moises Caicedo (Brighton, £100m), Romeo Lavia (Southampton, £53m), Christopher Nkunku (RB Leipzig, £52m), Axel Disasi (Monaco, £35.8m), Nicolas Jackson (Villarreal, £32m), Robert Sanchez (Brighton, £25m), Lesley Ugochukwu (Rennes, £23.2m), Angelo (Santos, £13m).

Outgoings: Kai Havertz (Arsenal, £65m), Mason Mount (Man Utd, £55m), Mateo Kovacic (Man City, £25m), Christian Pulisic (AC Milan, £20m), Kalidou Koulibaly (Al-Hilal, £19.8m), Edouard Mendy (Al-Ahli, £15.9m), Ruben Loftus-Cheek (AC Milan, £15m), Ethan Ampadu (Leeds, £7m), N’Golo Kante (Al-Ittihad, free), Cesar Azpilicueta (Atletico Madrid, free), Pierre-Emerick Aubameyang (Marseille, free), Abdul Rahman (PAOK Salonika, free).

Total ‘net’ spend: £101.3m

What are the rules on spending?

Chelsea have to adhere to the Premier League’s profit and sustainability rules, which allow for total losses of £105m over a three-year period. Any club that posts losses in excess of that figure could face penalties, including large fines or even a points deduction.

If Chelsea qualify for Europe this season, then they will also have to meet Uefa’s sustainability rules, which limit clubs’ spending on wages, transfers and agents’ fees to 70% of their revenue over a three-year period, with permitted losses of 60m euros (£51.6m).

The new rules replaced Uefa’s Financial Fair Play (FFP) regulations in June 2022 and clubs will have three years to implement them.

Uefa has a wide-ranging list of potential punishments for clubs which break these rules, including warnings, fines, removal from competitions or even the loss of European titles.

Juventus were kicked out of this season’s Europa Conference League for breaching FFP rules between 2012 and 2019, while Chelsea were fined £8.57m for breaches that took place during previous owner Roman Abramovich’s time at the club. Manchester United were also fined 300,000 euros (£257,000) by Uefa for a “minor” breach of its rules in July.

chelsea

How are Chelsea trying to avoid breaking the rules?

Heard of the term ‘amortisation’? The transfer of Mykhailo Mudryk is often used as the example to explain that.

Chelsea have signed many of their players under the Boehly era on long contracts, with Mudryk’s £89m fee spread across an eight-and-a-half-year contract, meaning he only costs about £10m a year on the club’s annual accounts.

While Uefa tightened its rules this summer to limit spreading a transfer fee across a maximum five years, Chelsea are not in Europe this season, so don’t have to worry about it yet. The Premier League does not yet have the same limits.

When a team sell a player, all of the profits go on to the accounts straight away.

To use another example, Kai Havertz cost Chelsea £71m in 2020, which equates to £14m a year over his five-year contract. But when he was sold to Arsenal this summer for about £65m he had about £28.4m of value left on the books for the final two years of his contract, meaning the Blues could bank about 36.6m of ‘profit’.

When you sell an academy graduate, the entire amount can go on the books as they did not cost a fee. So when Chelsea sold Mason Mount to Manchester United for £55m this summer, that entire amount goes down as pure profit in the accounts.

chelsea

Will it work?

Clubs’ accounts are published almost a year after the relevant deals take place, meaning up to date figures are an estimation. But we do know that last year’s accounts saw Chelsea post a £121m loss for season 2021-22, before Boehly took over. The season before that was a £156m loss.

Chelsea will need to keep raising funds, either through player sales, increased commercial deals or prize money, to keep balancing the books over the length of their new signings’ long contracts.

“I can see how they are doing it in terms of accountancy, I don’t see how they are doing it in terms of cash flow,” journalist Rory Smith told BBC Radio 5’s Monday Night Club.

“They have found this ingenious loophole by offering players long-term contracts. That’s a brilliant accounting trick. But that is not how they pay the clubs.

“They are not paying Brighton in nine instalments for Moises Caicedo, they will probably pay them in three, maybe two.

“That’s real money and my guess is there is some sort of loan facility that they have access to. That is not a great way to run things long term.”

Moises Caicedo posing in a Chelsea shirt
Moises Caicedo could become the most expensive signing in British football history

There is also the risk of tying players down to long-term deals who may sustain serious injury or loss of form, but will prove hard to sell because they still have several years left on their contracts.

The return of European football, particularly the more lucrative Champions League, is also likely to be important to Chelsea’s strategy – as is lowering their wage structure.

“Chelsea as of this moment think they are compliant with the financial regulations that are placed on them,” said BBC Sport football reporter Alex Howell.

“When the new owners took over it is believed that there was a ‘Chelsea wage’ where players’ salaries were inflated and that was something the new owners were looking to tackle.

“A lot of the new signings are younger players and it can be assumed that their wages are lower than the experienced players who have left the club.

“They have sold academy players such as Mason Mount and Ruben Loftus-Cheek, and that is a significant way to balance the books. There’s also been interest in Conor Gallagher, another academy graduate, so if he was to be sold that would also greatly help Chelsea stay within the stipulated rules.”

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