“Chelsea has done nothing wrong because they have kept within the rules, but they certainly haven’t kept within the spirit of the rules,” says football financial specialist on PSR concerns.

Chelsea has taken advantage of the Premier League’s rules that aren’t ‘fit for purpose’.

Chelsea’s boardroom and on-field decisions have appeared chaotic in recent years, with Todd Boehly’s takeover exacerbating the club’s financial woes for years.

Since Boehly became owner in mid-2022, Chelsea has spent approximately £1.2 billion on player transfers alone. While that figure has been derided due to the influx of new players at Stamford Bridge, Chelsea has still managed to stay within the Premier League’s Profit and Sustainability guidelines (PSR).

In short, the PSR allows for a maximum loss of £105 million over three seasons. Chelsea has managed to keep inside that sum thanks to cunning accounting and transfer decisions, despite spending an exorbitant amount on new acquisitions since the start of the 2022/23 season.

Chelsea exploits Premier League rules gaps.

That’s because the club discovered a loophole in the rules that allowed them to amortize transfer fees over the course of the long contracts they were handing out to new signings, while also selling off assets like hotels, parking lots, and the women’s team to sister companies for a tidy profit. The Premier League just approved the hotel contract after conducting an investigation to ensure that they are following the rules.

One definite strategy to keep within the rules is to maintain a consistent stream of player sales in addition to incomings. The present version of PSR permits clubs to bank the full sum of a player sale in the current accounting period, but only part of a paid transfer fee is included in the same.

Selling academy talent – Conor Gallagher, Mason Mount, Ruben Loftus-Cheek, Callum Hudson-Odoi, and Lewis Hall – all add to pure profit on the books because no payments are required to another club for those players.

Chelsea manager Maresca (Image Credit: Getty Images))
Kieran Maguire from the Price of Football podcast discusses this. It has established the basis for an informal transfer window for clubs on the verge of a PSR breach, with various transactions agreed upon – particularly trades involving indigenous players, who guarantee the highest revenues – to relieve pressure on the profit and loss statement.

“Every other club is doing that, as we saw with all of those unusual transfers just before June 30 – Chelsea, Nottingham Forest, Aston Villa, Newcastle and Everton all involved in something broadly similar that shows the weakness of the rules,” Maguire told FourFourTwo. “Chelsea have done nothing wrong, and this must be emphasized because they have followed the regulations, but they have not followed the spirit of the rules.

“The regulations just aren’t fit for purpose, and the Premier League keeps using the word ‘unintended consequences’ when referring to the independent regulator. The unintended implications of PSR are that clubs are essentially focusing on selling academy players because it makes financial sense.

“That sense of a bond between fans, players and the club is being taken apart to please accountants, and that can’t be right.”