How are Chelsea Getting Around FFP?

Since his take-over of Chelsea in May, Todd Boehly has proven that he’s not afraid to spend the big money. In the six months that he’s been at the club Boehly has spent up to £445 million just on new signings.

These signings include:

Raheem Sterling from Manchester City for £47.5 million.

Marc Cucurella from Brighton for £60 million.

Wesley Fofana from Leicester for £75 million.

Kalidou Koulibaly from Napoli for £33 million.

Carney Chukwuemeka from Aston Villa for £20 million.

Denis Zakaria on loan from Juventus.

Pierre-Emerick Aubameyang from Barcelona for £10.3 million.

Joao Felix from Atletico Madrid for a £9.7 million loan.

David Datro Fofano from Molde for £8 million.

Benoit Badiashile from Monaco for £35 million.

Andrey Santos from Vasco de Gama for £18 million

Mykhailo Mudryk for £88.5 million.

With the sheer number of signings and money spent, how are Chelsea dodging the Financial Fair Play - FFP rules?

The first thing to consider with FFP is how much teams are allowed to lose under FFP rules. The rules state that a club is allowed to lose £105 million over a rolling three-year period. In their most recent accounts (June 2021), Chelsea reported an operating loss of £387 million in three years, an egregious breach of FFP, a breach that was not recognised due to clubs being given allowances on losses due to the impacts of Covid-19.

Another aspect of Chelsea’s ability to avoid an FFP breach is the fact that Roman Abramovich did not charge interest on his loans to Chelsea and supposedly left the club completely debt free during the ownership transition.

Along with this, the success of the club has also aided their financial standing. For example, winning the Champions League in 2021 meant that Chelsea earnt £106 million in prize money alone.

However, there are no longer any Covid-19 circumstances, so how are Chelsea avoiding an FFP breach?

Amortisation is another strategy being used by Chelsea in order to navigate FFP rules. Amortisation is a process in which transfer fees will be spread over the period of their contract in the club accounts.

This process is being exploited by Boehly handing out seven and eight-year contracts to Chelsea’s new signings, with the shortest contract being a two-year contract for Aubameyang.

One way to ensure the club is staying within the FFP spend is player departures. In the summer following the 2021/22 season Chelsea made £56 million in player sales. The sale of Timo Werner back to RB Leipzig for £20 million and Emerson to West Ham for £15.4 million were the biggest sales, with most of their notable losses being free transfers.

The year before Chelsea made an estimated £124 million in player sales with the big departures of Tammy Abraham to Roma for £40 million, Kurt Zouma to West Ham for £35 million and Fikayo Tomori to AC Milan for £31 million.

Overall Chelsea have been able to turn a big profit when it comes to player sales in the last ten years, therefore mostly offsetting their sometimes wild spending habits. The Blues have made approximately £688 million in transfer sales in ten years, £331 million more than the second-highest earners Liverpool.

These player sales contribute to a lower net spend which helps keep them within FFP. However, in order for the new signings to be neutralised, Boehly and Graham Potter must have a clean-out of the Chelsea squad. This leads to the need to both free up room in the squad as well as make back some of the investment.

Rumours allege that the likes of Kai Havertz, Hakim Ziyech, Conor Gallagher and Ruben Loftus-Cheek could leave the club, with many suitors including Roma, Newcastle and Crystal Palace. Sales for players such as Loftus-Cheek, who do not currently make the starting XI could directly contribute to a FFP-friendly net spend.

For Chelsea and their fans, this level of spending must result in something. The Blues have stuttered in the first few months under Potter, playing poor football and churning out even poorer results. But with this solid investment in talent, Chelsea look to be building a potential future dream team.

The likes of Mudryk, Badiashile and both Fofanas added to the existing talent of Thiago Silva, Reece James, Ben Chilwell and Mateo Kovacic could combine to create a Chelsea team that could finally challenge for titles again.

Another big aspect of the new signings is their ages. Mudryk is 22 years old, Badiashile is 23 years old while James is 23 years old. The core of this new Chelsea team is young, meaning there is a potential for a long period of challenging for titles and trophies should the new arrivals all hit the potential that they are expected to.

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