New EPL rules will affect Chelsea, Liverpool and Man City in January

A player’s transfer fee can only be spread out over five years in Premier League clubs’ accounts, according to a vote.

It also prevents a practice noticeably used by Chelsea to strengthen their squad during recent transfer windows.

In an effort to follow financial regulations, The Blues granted new signings lengthy contracts.

According to the Premier League, all new or extended player contracts will be subject to a five-year maximum going forward.

A rule change was also approved by clubs, allowing the league’s board to prevent clubs from signing up new players until they have settled a transfer debt with another Premier League or English Football League (EFL) team.

The meaning of the new transfer rule

Amortization, the accounting practice of gradually deducting a player’s initial cost during their contract, has been used by some Premier League clubs in the past to circumvent Financial Fair Play (FFP) regulations, which currently allow for losses of up to £105 million over the course of three years.

Despite having arguably benefited the most, Chelsea was one of 15 clubs to vote in favor of changing the amortisation rule.

Since the summer of 2022, the six-time English champions have signed a number of players on lengthy contracts.

When they joined Chelsea in major financial deals, Moises Caicedo, Mykhailo Mudryk, and Enzo Fernandez signed contracts for at least eight years, whereas Cole Palmer and Romeo Lavia signed seven-year contracts when they arrived at Stamford Bridge in the summer.

Despite the new regulation, it is anticipated that Chelsea will keep using that model.

The annual payments recorded on the club’s accounts are smaller over longer periods if transfer fees are distributed evenly throughout a contract.

If the agreement lasted eight years, the £100m fee would be amortized at £20m per year with a five-year contract, but £12.5m annually.