Extremely long contracts are the norm in US sport but those contracts are constructed in a very complex way with multiple outs for player and franchise.
I wonder if Boehly is misunderstanding the game and trying to bring the US culture to football finance. Could go horribly wrong.
The other ruse is that he's using it as a way to circumvent FFP by recognising the transfer fee cost across 8 years but it seems a daft strategy given how unproven his signings are these days. You'd think he'd be in the perfect place to learn the error of that approach given that Chelsea are about to pay off Bakayoko's contract after years of failure.
It's so the amortisation is over a longer period. If he cost £80 million that's £10 million a year for FFP purposes. If they signed him on a 4 year contract it would "cost" double.
No matter how much of a "dud" he is they will get a lot of that back anyway. The 8 years isn't to protect the asset in the way smaller clubs give out 3 year contracts.
What will be interesting is if a few years down the line all these massive signings haven't worked out then Chelsea will have to go back to the transfer market, but with a huge dent already in their FFP allowance for that year from 5 or 6 players they signed three years ago . They can sign new players and do the same thing again, rolling their debt on for years but I wouldn't be surprised if this loophole is closed soon and then Chelsea might find they've got a team in need of a rebuild and no space to work in. They'll also definitely be getting less back on unsuccessful players now that Granovskaia has gone; she was the master of somehow convincing clubs to overpay for players who didn't work out and I doubt there's anyone filling her role to her level
Just asking as I don't know, wouldn't Chelsea just pay up his contract to get him off the books if he's a dud and can't be sold? Lets face it money not been an issue there in the last decade or probably for the next. Expect this will come up on the "price of Football" pod, Kieran Macguire, worth a listen
Possibly but if he's a dud they'll probably just loan him out for years and recoup some of the money in loan fees.
Bakayoko is still a Chelsea player and he hasn't kicked a ball for them since 2018.
Extremely long contracts are the norm in US sport but those contracts are constructed in a very complex way with multiple outs for player and franchise.
I wonder if Boehly is misunderstanding the game and trying to bring the US culture to football finance. Could go horribly wrong.
The other ruse is that he's using it as a way to circumvent FFP by recognising the transfer fee cost across 8 years but it seems a daft strategy given how unproven his signings are these days. You'd think he'd be in the perfect place to learn the error of that approach given that Chelsea are about to pay off Bakayoko's contract after years of failure.
Right, in the US it's used to circumvent salary caps and luxury Taxes. There was an article in The Athletic a few months ago about how that sort of thing is coming to football.
It's so the amortisation is over a longer period. If he cost £80 million that's £10 million a year for FFP purposes. If they signed him on a 4 year contract it would "cost" double.
No matter how much of a "dud" he is they will get a lot of that back anyway. The 8 years isn't to protect the asset in the way smaller clubs give out 3 year contracts.
What will be interesting is if a few years down the line all these massive signings haven't worked out then Chelsea will have to go back to the transfer market, but with a huge dent already in their FFP allowance for that year from 5 or 6 players they signed three years ago . They can sign new players and do the same thing again, rolling their debt on for years but I wouldn't be surprised if this loophole is closed soon and then Chelsea might find they've got a team in need of a rebuild and no space to work in. They'll also definitely be getting less back on unsuccessful players now that Granovskaia has gone; she was the master of somehow convincing clubs to overpay for players who didn't work out and I doubt there's anyone filling her role to her level
Just asking as I don't know, wouldn't Chelsea just pay up his contract to get him off the books if he's a dud and can't be sold? Lets face it money not been an issue there in the last decade or probably for the next. Expect this will come up on the "price of Football" pod, Kieran Macguire, worth a listen
Possibly but if he's a dud they'll probably just loan him out for years and recoup some of the money in loan fees.
Bakayoko is still a Chelsea player and he hasn't kicked a ball for them since 2018.
On 15 July 2017, Bakayoko signed for Premier League club Chelsea on a five-year contract for a fee around the margin of £40 million.
Doesn't that mean at some stage he has signed a new contract, or is it just wrong?
according to Simon Jordan this a.m. on talksport, very long contracts are designed to meet the requirements of F F P, all to do with the 'value write down and depreciation' of players over the contract length .. he also said that long contracts almost certainly will contain break clauses, review and performance clauses .. his analysis is quite complicated but as the one time owner and renowned hard headed negotiator at Palace, he should know that of what he speaks
Uefa is to change its Financial Fair Play rules in response to Chelsea's recent trend of signing players on long-term contracts.
Signing players on extended contracts enables Chelsea to spread the player's transfer fee over the life of that deal when submitting their annual accounts.
It's so the amortisation is over a longer period. If he cost £80 million that's £10 million a year for FFP purposes. If they signed him on a 4 year contract it would "cost" double.
No matter how much of a "dud" he is they will get a lot of that back anyway. The 8 years isn't to protect the asset in the way smaller clubs give out 3 year contracts.
What will be interesting is if a few years down the line all these massive signings haven't worked out then Chelsea will have to go back to the transfer market, but with a huge dent already in their FFP allowance for that year from 5 or 6 players they signed three years ago . They can sign new players and do the same thing again, rolling their debt on for years but I wouldn't be surprised if this loophole is closed soon and then Chelsea might find they've got a team in need of a rebuild and no space to work in. They'll also definitely be getting less back on unsuccessful players now that Granovskaia has gone; she was the master of somehow convincing clubs to overpay for players who didn't work out and I doubt there's anyone filling her role to her level
Just asking as I don't know, wouldn't Chelsea just pay up his contract to get him off the books if he's a dud and can't be sold? Lets face it money not been an issue there in the last decade or probably for the next. Expect this will come up on the "price of Football" pod, Kieran Macguire, worth a listen
Possibly but if he's a dud they'll probably just loan him out for years and recoup some of the money in loan fees.
Bakayoko is still a Chelsea player and he hasn't kicked a ball for them since 2018.
On 15 July 2017, Bakayoko signed for Premier League club Chelsea on a five-year contract for a fee around the margin of £40 million.
Doesn't that mean at some stage he has signed a new contract, or is it just wrong?
He signed an extension to 2024 in the summer of 2021.
Basically they didn't want to lose him on a free in 2022, so extended his contract so they could continue to get loan fees for him, but also in the hope that if he suddenly did really well on loan they could potentially get a transfer fee for him.
Comments
I wonder if Boehly is misunderstanding the game and trying to bring the US culture to football finance. Could go horribly wrong.
The other ruse is that he's using it as a way to circumvent FFP by recognising the transfer fee cost across 8 years but it seems a daft strategy given how unproven his signings are these days. You'd think he'd be in the perfect place to learn the error of that approach given that Chelsea are about to pay off Bakayoko's contract after years of failure.
Bakayoko is still a Chelsea player and he hasn't kicked a ball for them since 2018.
Doesn't that mean at some stage he has signed a new contract, or is it just wrong?
Uefa is to change its Financial Fair Play rules in response to Chelsea's recent trend of signing players on long-term contracts.
Signing players on extended contracts enables Chelsea to spread the player's transfer fee over the life of that deal when submitting their annual accounts.
That means £89m signing Mykhailo Mudryk will be valued at £11m a year over his eight-and-a-half-year deal.
Uefa is to set a five-year limit over which a transfer fee can be spread.
https://www.bbc.co.uk/sport/football/64383217
Basically they didn't want to lose him on a free in 2022, so extended his contract so they could continue to get loan fees for him, but also in the hope that if he suddenly did really well on loan they could potentially get a transfer fee for him.