Yeah I do understand the principles if FFP if not the minute detail.
My point was that I don't think they would be breaking those rules and wouldn't risk doing so, but that is not based on anything concrete. Are you that familiar with Chelsea's finances that you know they will break the rules if they splash an extra 50m on Gordon? If so, fair do's.
At 50 million pounds, Gordon adds an extra ten million per year to the amortization bill (on a five year contract) plus whatever the wages are. Let me explain why they don't want to do that.
UEFA's new rule is simpler and far more transparent than how the Prem does things. I could probably get under the hood of the last three years of financials and give you a decent estimate of their position (I've done that with ours) with respect to the Prem, but I'm going to stick with the simpler problem. This means ignoring a lot of detail, which I'm going to summarize as 'fairly irrelevant'. Also, I was able to confirm that there are no loopholes on the amortization problem due to the rules transition.
Starting next season, Chelsea's total outlay on wages and their transfer dealings needs to be under 90% of their revenue, as will that of all participants in UEFA competitions. They're already upside down a couple hundred million in the transfer market coming into this season, between 20-21 and the Lukaku-shaped albatross around their necks. They've added about 250 million more in outlay so far. Let's call all the contracts in question five years long to keep the math easy. That leaves them 90 million or so that they're amortizing each year as of now.
Last season revenue was 437 million pounds and wages were 334 million pounds. This is fine until you add in the 90 million in player amortization. Now they're at 424 million pounds. The situation is likely worse than that, because they added six players while shifting Werner's wages and part of Lukaku's, but let's ignore that to keep the math easy. This leaves a shortfall of 25 million pounds. This is probably fine, since the 2021-22 financials will add back ticket sales that weren't in the previous year's revenue.
The problem is that in the next season the threshold goes to 80% of revenue, and in the season after to 70%. This means that, as things stand, they have to do some combination of shift an extra 43.7 million pounds of wages or book that kind of profit in the transfer market two years out, and twice that three years out. If they sell academy players, all of the sale price counts as profit. If the player has been around a while, most of it does. If they flip a player for considerably less than what they paid a year later, it actually counts as a loss and makes matters worse. They can offset some of that with revenue growth, but they've been fairly flat for a while now.
This situation is uncomfortable, but manageable. It's probably going to cost them a prospect or two like Gallagher and Broja to solve. Now, if you tack on another quarter million in player purchases this math completely blows up. That's another fifty million in amortization costs, plus whatever wages they pay out. Let's generously call the extra wages on 250 million pounds worth of players forty million a year, for another ninety million in costs. They're going to have to sell players just to comply next season, and they're going to have to have a giant fire sale in each of the next two seasons in order to get under the cap, because they have to offset every dime of the increased costs.
TL;DR : if they buy Gordon right now, they're committing to selling an in-demand player in a couple of years to pay for it. Are you doing that? I'm not. Fofana taps them out, for all practical purposes. They want to give Auba a one-year contract because they don't want to have to offset the wages and half of the transfer fee somehow next season under UEFA's new rules. If you were wondering why they're being difficult about this, now you know.
Have you not realised yet? Every man and his dog on football fan forums are experts on other clubs finances.
If I can understand things like the byzantine NBA and NFL salary cap rules, I can understand this. It's child's play by comparison, because the rules are simple and the relevant club financial data is literally published on every football club's website. The data on transfermarkt on fees is at least decent, and takes a couple of clicks to access. If I want to know where a club stands, it's literally a thirty minute project. The rest of the time spent was on writing it up clearly.
