Chelsea have been sanctioned by UEFA already this summer, however are now facing a race against time to meet the guidelines and not be hit with more punishment.
Despite being firmly on the right side of the line when it comes to their Premier League finances, they were found guilty of breaking the rules that are set out by UEFA.
This came as a result of the European football body not recognising Chelsea selling hotels and the women’s team to balance the books.
It has been said that Chelsea need to sell players this summer in order to register their new signings for the upcoming Champions League campaign.
They have already completed some good sales. The money received for the likes of Joao Felix, Armando Broja and Lesley Ugochukwu has been praised as strong business.
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Chelsea face another UEFA punishment if they don’t balance books before Monday
However, with these players not being part of their ‘List A’ squad for the Conference League’s knockout stages, their sales will not impact the financial standing with UEFA.
Finance expert Adam Williams exclusively told The Chelsea Chronicle that the Blues still have to balance out the £120m in annual costs that they have added to their squad this summer.
He said: “The thing with the UEFA settlement is that it isn’t entirely clear whether the ‘cost savings’ to which it refers are straight-up sales or whether simply removing a player from their List A for the season would work too.
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“I think it’s more likely to be the former, and most of the people I’ve spoken to in football finance think the same. If that is the case, then Chelsea have still got work to do to get to the positive transfer balance that UEFA have asked for.
“The players they have signed so far this season have probably added over £120m in annual costs in terms of wages and amortisation.
“Not all of that is relevant here, because players like Liam Delap don’t need to be on List A because they are association-trained. Mamadou Sarr and Kendry Paez meanwhile have gone out on loan, so they won’t be on List A this season. Let’s say they needed to find about £80m in cost savings.
“On the flip side, several of the sales they have made this summer are players that weren’t on last season’s A List, so they don’t count towards the transfer balance either. With the sales they do make, they can remove their amortisation costs and register one-third of player sale profits – and ‘profit’ here is defined as the transfer fee minus their amortised book value.
“I think only Madueke, Dewsbury-Hall and Amougou count towards this calculation, as they are the only sales they have made who were on last season’s List A.
“Amougou is a break-even sale for FFP purposes, though they will save his wages. Dewsbury-Hall was a loss-making sale too. Again, they remove his wages. So that’s maybe £20m between them in wages and amortisation.
“Madueke was sold at an accounting profit of £31m and one-third of that goes towards the transfer balance. With the amortisation and wages, that will increase the balance by about £20m.
*“Mudryk and Guiu are no longer this season’s List A, so that reduces the balance by another £20m. Sancho too – that’s another £10m or so.*“
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Chelsea have two options to help facilitate more signings
While this may sound all doom and gloom, Chelsea still have two players whose exits can get them securely in UEFA’s good books for the upcoming season.
Williams went on to say that Nicolas Jackson and Christopher Nkunku represent opportunities for Chelsea to sell players from the previous season’s List A, and even the loan of one of them could end up being all they need.
He said: “So they still have work to do to break even. Of the players Chelsea have listed for sale, Chilwell, Disasi, Sterling etc weren’t on last year’s List A, so if they sell them, it won’t be relevant to this calculation.
“Jackson and Nkunku are their only real options. A loan for one or both might be enough to get them over the line, but it’s not certain. A permanent sale would do the trick. I think it would be very difficult to add any players who Chelsea plan to put on their List A this season without sales first.
“*These are very, very rough calculations that I’m doing, but even with a big margin for error and conservative estimates on the costs and savings of ins and outs, you can see the issue. I’d be surprised if there wasn’t more outbound movement before the deadline. If there isn’t, then they are at risk of a breach.*“
Reports have stated that Chelsea are still looking to make new signings before the end of the transfer window. Xavi Simons and Alejandro Garnacho have both been linked with a move before Monday’s deadline.
For this to be the case, it is likely that both players would have to be moved on, meaning it is going to be busy in the boardroom at Stamford Bridge.