UEFA limits transfer fees’ allocations with long-term contracts

UEFA has announced changes to the Financial Fair Play rules that will have a direct impact on clubs like Chelsea and Juventus.

In the future, clubs will no longer be able to allocate the transfer amount for a football player for a period of more than five years as an accounting expense. In the past season, we witnessed how Chelsea signed their players for with 7 or 8-year-long contracts, thereby distributing the so-called competitor depreciation, which is the gradual loss in value of the asset that is recognized as an expense in finance.

However, the already signed contracts remain valid, and the rule will apply only to those that will be concluded in the future. This measure is expected to limit the practice of signing long-term contracts altogether.

UEFA has just confirmed decision that for FFP a player’s transfer fee can be spread out for a maximum of five years even if the player’s contract is longer.
(Will not be backdated so Chelsea’s longer-term player contracts are ok) https://t.co/5aBw7t9ulw pic.twitter.com/RbYvhzbSeM

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— Martyn Ziegler (@martynziegler) June 28, 2023

In addition, UEFA imposes another important restriction: clubs cannot spend more than 70% of their income on transfers, wages and commissions. However, this change will be imposed gradually and will not be a reality until the 2025/26 season. Before that, there will be a gradual reduction of 90% in the coming campaign and then to 80% in 2024/25.