What exactly is amortisation?
Amortisation is a creative accounting practice that can be used by clubs as a way of balancing the books. It is merely a process of gradually writing off the initial cost of a player over the course of their contract.
How have Chelsea used it to their advantage?
It explains why Chelsea, who are trying to ensure their wild spending does not breach financial fair play regulations, handed out eight-and-a-half year deals to Mykhailo Mudryk and Enzo Fernández. Mudryk joined for a potential £89m but that fee will be recorded at around £10m a year for Uefa’s FFP calculations.
Are Chelsea the only club using this method?
Chelsea have brought the idea into wider public consciousness but they are not reinventing the wheel. Clubs always use amortisation. Where Chelsea differ is in handing out eight-year deals. That is unusual.
Will it work in the long term?
The long deals are a risk. Clubs have always been able to hand them out, but what if a signing fails to produce? What if you are stuck with an underperforming player for eight years? Of course Chelsea will feel that putting their new signings on relatively modest wages will guard against them being lumbered with duds. They have also signed young players who should improve.
The immediate problem for Chelsea, however, is that Uefa has reacted by shutting the loophole. European football’s governing body has decided that, from this summer onwards, clubs will be able to offer long deals but will be limited to spreading out the cost of fees to a five-year period. Chelsea could need a new ploy.
Will they spend big again in the summer?
Chelsea have already spent more than £500m since being bought by Todd Boehly and Clearlake Capital last summer, so they will need to focus on trimming a bloated squad. But the message after the west Londoners had stolen Mudryk away from Arsenal? “We’re just getting started.”
Will it all end in tears?
Plenty of Chelsea’s rivals will hope it ends in financial ruin. The spending has been staggering and there has been plenty of criticism of Boehly and Clearlake. But while Chelsea could miss out on Champions League qualification this season, people close to the club say that finances are not an issue for Roman Abramovich’s successors. Chelsea broke the British transfer record to sign Fernández and it was said that money was no object when they went in for Mudryk. The question is whether Graham Potter can build a winning team from all the assorted parts he is forced to work with.