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Originally Posted by MegaErtz
The money doesn't get charged to their account when it is spent. Rarely will a large transfer fee be paid in full up front, and even when it is, the accounting "charge" is spread out over the length of the contract. For example, if a player signs for a £50 million transfer fee and a salary of £5 million per year for five years, they would "charge" £15 million per year for five years to the accounts. Just divide the transfer fee by the amount of years a player is signing for, then add in the salary per year.
There are numerous legal loopholes you can exploit. Under normal FFF rules, a club is limited to a 71% spend on player and agent fees, meaning all transfer fees, salaries, bonuses, and player agent fees combined. However, if a club can show long term financial stability, they are allowed to exceed these numbers and stay within the rules. It was really interesting to see how Newcastle navigated the FFF system when it was obvious for years that they were trying to get bought by the Saudi pension fund. Their goal was to stay in the Premier League without spending any money, which allowed them to stay profitable for five straight years. This will allow the new owners to go nuts the way Manchester City and PSG did when they were taken over.
Chelsea are a bit of a special case because there were no rules when Ambramovich took the club over. All of those outstanding "loans" have been written off as he has forgiven them. I suspect a deal was cut to compensate him but this is a bit like the CFL, where it can be hard to prove salary cap violations. For example, the Stampeders could hook a player up with $2500 apartment and only charge him $500 to live there. Is that extra $2000 a month counted against the salary cap? No, but extremely hard to prove if everyone keeps their mouth shut.
I think Chelsea received £22 million for Werner and sold Emerson for £15 million to West Ham, but the salaries coming off the books are also taken into account. Ross Barkley just had his contract cancelled. Big earners like Rudiger, Christiansen, Miazga, and Danny Drinkwater all left the club this off season and due to the clauses in FFF that give credit for shedding salary, this is what has allowed them to spend so much this summer.
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Right, and I know that they can amortize the expenses through the years. But Newcastle couldn't spend as much as people would've thought because of FFP. There was a piece with Eddie Howe talking about that earlier this summer and how everyone thought they'd be able to running around cutting cheques and it wasn't the case.
And as far as Roman just forgiving the loan, that definitely isn't allowable. An owner can't just lend money to the club and then forgive it and everything is cool. Can you imagine the ramifications when you have countries owning these teams? I mean sure, we all know that City and Newcastle are going to spend wildly as it is, but if there was virtually no limit because they could just forgive the "loan" it would be much, much worse.