One of the hallmarks of Chelsea’s transfer business thus far under the ownership of Todd Boehly and Clearlake Capital has been the length of the deals being handed out to new signings.
The London side have spent more than £900m since Boehly and Clearlake acquired the club from former owner Roman Abramovich in May 2022, with the American owners pressing ahead with transfer spend the likes of which hasn’t been seen in English football before, Chelsea already breaking the British transfer record twice in 2023.
Adopting the tactic common in North American sport of offering long-term deals to athletes, Chelsea handed out seven, eight and nine-year contracts to most new signings, including Moises Caicedo, who rejected Liverpool’s £111m advances in order to ink an eight-year deal at Chelsea in a £115m switch, with Chelsea having the option on his final year to take it to nine years.
Chapter and verse has been written around Chelsea and amortisation in recent weeks. Amortisation, for those still unfamiliar with the term, is how the purchase of assets is accounted for on the balance sheet, in this case footballers. While transfer fees are not paid out on the same terms as they are amortised, for accounting purposes the cost of the guaranteed transfer fee is spread over the life of the contract. That means that there is an annual cost saving on the balance sheet by spreading a transfer fee over a longer period of time.
European football’s governing body, UEFA, took action over this particular way of doing business at the start of the summer, prompted by what was happening at Chelsea. Now, clubs can still offer players long contracts beyond the normal five years but can only amortise the cost of transfer fees over a maximum period of five years.
However, this only applies to clubs competing in European competition, and given Chelsea’s dismal 2022/23 campaign that saw them finish 12th and miss out on any European football this season, the Stamford Bridge outfit are bound only by the Premier League’s profit and sustainability regulations, which do not yet have limits on how long contracts can be or how long transfer fees can be amortised over.
Chelsea have broken the mould this year. If the transfer business works out and this is a side that goes on to dominance then Boehly and Clearlake will be seen as some kind of visionary geniuses. If they fail competitively then they face a lot of risk in terms of getting any underperforming players off their wage bill given they have effectively handed out contracts that cover the prime years of a player’s career.
Liverpool, for some time, have been one of the Premier League clubs to keep their players tied down for significant periods, something that is seen to aid the stability required to achieve competitive success on the pitch. Analysis by sports intelligence firm Twenty First Group revealed that the Reds, this season, sit third in terms of the length of time remaining on the contracts of their players, with the club seeing an average of 2.92 years remaining.
That figure has been aided by contract renewals over the last 12 to 18 months of the likes of Mohamed Salah, Alisson Becker and Trent Alexander-Arnold, as well as new signings such as Alexis Mac Allister and Dominik Szoboszlai, also factoring in the departure of a number of first-team players who came to the end of their deals.
That figure placed Liverpool third when it came to all 20 Premier League sides, with Manchester City second on the list with players having an average of 3.12 years left on their deals at the Etihad Stadium.
But, topping the pile is Chelsea whose average contract length now stands at 4.59 years, a figure 76% above the league average of 2.61 years. That is a figure likely to continue rising given Chelsea are still targeting more players and looking to offload some of their squad players in order to try and balance the books.
That represents a large commitment to the future from Chelsea’s point of view, but also one that comes with plenty of risk if they fail to make the plan work and get back into the top four and Champions League qualification regularly, as they have targeted.
