Kieran Maguire: Chelsea now ‘protected’ after three £10m-a-year deals struck
Three headline summer signings at Chelsea will be amortised at £10million per year – and the players’ extra-long contract lengths mean the club’s investment is now “protected”.
That is the view of finance guru Kieran Maguire, speaking exclusively to Football Insider about the Blues’ captures of Wesley Fofana, Marc Cucurella and Raheem Sterling.’
Chelsea announced the signing of centre-back Fofana, 21, from Leicester City on a seven-year deal last Wednesday (31 August).
Sky Sports reported the fee to be £70m, rising to £75m with add-ons.
Forward Raheem Sterling, 27, and left-back Marc Cucurella, 25, also penned five and six-year contracts when they joined from Man City and Brighton in £50m and £60m deals respectively.
The Daily Mail reported last month (16 August) that new owner Todd Boehly was looking to implement a US-style contract policy with players locked into ultra-long deals.
Maguire explains that this will help with amortisation, the practice of spreading a player’s transfer fee and wages over the course of their contract length for accounting purposes.
“The Fofana seven-year deal, which follows Curella on six years, indicates that Chelsea want to reduce the costs in the next two or three years with regards to amortisation,” he told Football Insider’s Adam Williams.
“For Fofana who signed for £70m, that works out at £10m per year. It’s the same for Cucurella and Raheem Sterling. This helps spread the cost in terms of financial sustainability and compliance perspective.
“This will be one of the considerations from the Chelsea board. The other is likely to be that it protects the club.
“The players they have signed in the main have been quite young. If they still have several years remaining on their contracts, Chelsea can extract maximum value.
“It is very different from what we see in the US, where the clubs are more in the driving seat. In football, the labour laws are slightly more protective to the individual.”
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