Premier League set to review transfers made on 'unofficial deadline day' | Premier League

For accountants in certain Premier league Clubs have not been able to go on holiday early this summer. Almost £250m was spent on players in the space of four days at the end of June (more than the entire January transfer window), leading to Sunday 30 June being described as an unofficial transfer deadline day as a scramble took place to balance the books and comply with profitability and sustainability rules (PSR).

The most eye-catching piece of business was undoubtedly the number of transfers that took place between six clubs thought to have been most in danger of exceeding their £105m loss allowance over a three-year period starting in July 2021. Aston Villa, Chelsea, Leicester and Newcastle, plus Everton and Nottingham Forest – who were awarded points deductions by the Premier League last season after breaching PSR rules – were particularly active in the transfer market ahead of the deadline marking the end of the accounting period in which clubs’ finances are assessed.

Academy products Tim Iroegbunam and Lewis Dobbin were swapped in separate deals between Everton and Villa for £9m each. Then Villa, who made a £119m loss last season, sold teenager Omari Kellyman to Chelsea for £19m, and Dutch defender Ian Maatsen went in the other direction for £37.5m. Meanwhile, Forest were spending more than £30m on Newcastle's 21-year-old midfielder Elliot Anderson, while Chelsea completed the signing of Kiernan Dewsbury-Hall for £30m from Leicester. There is no suggestion that any of the clubs involved have broken any rules, although Maheta Molango, the chief executive of the Professional Footballers' Association, has He called the loophole “absurd”.

“Clubs have been very clever in saying that these are not swap deals, but individual deals signed fairly quickly one after the other,” football finance expert Kieran Maguire tells the Guardian. “Generally, there’s nothing stopping them saying, ‘I’ve got a player you want and vice versa. We think your player is worth £5m more than mine, so we could agree the prices to be £10m and £15m or we could agree it to be £25m and £30m.’ Either way, you get that extra £5m.

“That seems to be a driving factor in relation to these signings. And there is no real price tag – Brighton have paid £32m for Yankuba Minteh from Newcastle and have no PSR issues. So if that is the price for a 19-year-old, you could argue that some of the other deals don’t seem over the top. But he has just had a spectacular season with Feyenoord.”

Just days before June ended, the Premier League sent a letter to all its clubs to explain its rules on the fair valuation of players involved in transfers after “a significant number of them requested clarification”. It is understood that more than one had expressed concerns about the loophole being exploited, and the letter warned that the selling club would have to pay back part of the transfer fee if it decided the fee had been inflated.

“Any transaction over £1m is potentially subject to a fair market value review,” Maguire adds. “But people trying to agree on what a fair price for a player is have an almost impossible task. There are no list prices for them because they are all unique – it’s not like buying an iPad.”

However, the Premier League’s director of governance is expected to investigate some of the recent transfers, warning that clubs could be “asked to provide information and evidence to assist in determining whether the transaction should be deemed to be made at arm’s length”. If not, “an assessment of the fair market value of the transfer will be undertaken to determine the value at which the transaction can be approved”.

However, while the current PSR rules are expected to be replaced next year by a new cap on spending on players that was voted unanimously by clubs in May, that does not necessarily mean the end of such transfers. With teams expected to be able to spend a maximum of 85% of their turnover on playing-related costs, which include transfer fees, wages and agent fees, Maguire believes the system could still be open to manipulation. “I think it is likely that PSR in its current form will expire in 12 months and then the Premier League will adopt the UEFA-style model that says you can’t spend more than x% of your total revenue plus profit on player sales,” he says.

“So again there is an incentive for clubs to exaggerate profits from player sales. UEFA rules say that 70% of revenue plus profits from player sales can be spent on salaries, agent fees, amortisation and depreciation of players, so there is still huge scope to make the figures fit with the number of unusual transactions.

“We saw it with both Barcelona and Juventus (in June 2020) when… They exchanged (Miralem) Pjanic and Arthur “So they seemed like hugely exaggerated deals. That could become more common in the future.”