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The Premier League will limit the periods over which player’s transfer fee can be amortised after clubs voted to introduce fresh limitations.
At a shareholders’ meeting on Tuesday, 15 clubs voted in favour, two against and three abstentions.Surprisingly, Chelsea, who had exploited the previous regulations by tying players down to ridiculously long contracts of in the past 18 months, also voted in favor of the rule change.
Teams also voted in favour of enabling the Premier League board to stop clubs from registering more players in situations where they owe a transfer debt to another Premier League or English Football League (EFL) side until that outstanding payment has been made.
The offending club could also see the outstanding amount deducted from their share of the league’s prize money.
According to the new regulations, irrespective of the length of the players contract, the transfer fees have to be paid within a period not longer than five years. Despite its introduction, the new rules will not take retrospective effect.
This simply means it will not be backdated to include transfers that have already happened or contracts already signed.
The development synchronizes the Premier League’s player transfer fee and contract fulfilment regulations with that of UEFA after the European football giverning body introduced a five-year limit on transfer fee amortization in June.
Under the new regulations, Enzo Fernandes’ eight-year contract would not be permissible
Previously, clubs were allowed to infinitely spread the cost of a transfer, over the full length of any contract.
This made it possible to sign players on long contracts and potentially spread out the impact of transfer spending on theor finances, over a longer period.
Clubs who engaged in this practice did it ostensibly to be able to fulfil their financial obligations.
For example, a player signed for a £60million fee on a six-year contract would cost a team £10m ($7.52m) per year in their accounts.
However, due to the lack of legislation in this area concerns grew after several of Chelsea’s high-profile signings over the past 18 months were signed to lengthy deals.
Mykhailo Mudryk, for example, signed an eight-and-a-half-year contract — the longest in Premier League history — with Chelsea following his €70m (£62m) move from Shakhtar Donetsk in January.
Mudryk signed the longest contract in Premier League history for Chelsea
Enzo Fernandez also signed a deal until 2031 after his £106m January move from Benfica.
UEFA, which has a separate set of financial regulations from the Premier League, moved to close this loophole in the summer.
It also set a five-year limit on the amortisation of transfer fees, irrespective of contract length, and similarly did not backdate its new amendments.
Under the Premier League and UEFA’s legislation, contracts can still be any length but it is the period over which a transfer fee can be spread in accounts which is limited to five years.
Premier League clubs are permitted to lose a maximum of £105m over a three-year period to comply with the league’s Financial Fair Play regulations (FFP).
UEFA has recently changed its financial sustainability rules and introduced a squad cost control rule which restricts spending on player and coach wages, transfers, and agent fees to 70 per cent of club revenues.
This will be implemented gradually, first at 90 per cent in 2023-2024, 80 per cent in 2024-2025, and 70 per cent in 2025-2026 and from thereafter.
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Ghananewshome
