Premier League takes on Chelsea contracts, introducing new 5-year limit

The EPL closed a potential financial fair play loophole this week by banning player contracts that are longer than five years long. 

Premier League club owners have voted to ban player contracts longer than five years long. This vote, which was announced on Wednesday morning, came about following concerns about Chelsea’s transfer strategy.  
 
The Blues have signed multiple players, including Moisés Caicedo who was signed for a British transfer record, to 8-year long contracts. The reason for this is to minimise the impacts of the transfer fees and to get around the EPL’s Financial Fair Play (FFP) regulations. 
 
Chelsea’s tactic will no longer work. However, it does not apply to past contracts.  

EPL owners amend FFP rules

The Premier League’s latest owners meetings have resulted in a number of changes to the EPL’s FFP rules. The most notable of these changes is a ban on player contract amortisation. EPL contracts are now limited to a maximum of five years. 
 
In soccer, amortisation refers to the process of spreading a transfer fee over the length of a contract. So basically, the longer the contract, the smaller the hit on a club’s annual book. 
 
Previously, a Premier League club could offer a player any length of contract. This resulted in many clubs, like Chelsea, offering very long contracts to players in order to amortise the player’s transfer fee over a longer period of time. Now, Premier League clubs can only amortise contracts over a maximum of five years.  

Ruling a major blow to Chelsea plans

A number of clubs have been known to offer very long contracts. In England, no club has offered more long contracts in recent years than Chelsea.  
 
Players like Moisés Caicedo, Noni Madueke, Nicolas Jackson, and many others who’ve been signed in the past three transfer windows are all on 8-year contracts. 6 and 7-year contracts are scattered throughout their squad. Enzo Fernandez is reportedly on a 9-year deal after signing a contract extension.  
 
Even with these long-term deals, Chelsea are reportedly having a hard time staying on the right side of the Premier League’s FFP regulations. The main reason for this is because Chelsea have missed out on European soccer.  
 
They are in 12th now and most soccer betting sites have them as big outsiders to qualify for Europe this season, so the Blues’ FFP problems will not be going away any time soon. 
 
Thankfully for Chelsea, the Premier League vote is not retroactive. “Going forward, a five-year maximum will apply to all new or extended player contracts,” the Premier League Shareholders board explained in their statement.  

EPL adopts UEFA rules

The EPL’s new rules bring them closer to Europe’s rules for contracts and FFP more generally. UEFA already had a 5-year contract limit on the books. This was something that was emphasised by the EPL.  
 
“Premier League Shareholders today agreed to amend the rule on amortisation of player registration costs to bring in line with UEFA's regulations,” said the Shareholders board in a statement released on Wednesday.  

This vote is also a sign that the Premier League has gotten serious about cracking down on clubs trying to circumvent the league’s FFP rules. If reports are true, Everton’s 10-point deduction could the first of many points deductions levelled against Premier League clubs.