Premier League clubs are gearing up for what has been called the ‘unofficial transfer deadline day’ on Sunday, June 30th. This date is crucial because it marks the end of the financial year for Premier League clubs, and they must ensure compliance with the profit and sustainability rules (PSR) as they submit their accounts. The PSR states that clubs cannot lose more than £105 million over a three-year period, with additional restrictions if they have spent time in the Championship.
To avoid potential charges and points deductions, clubs need to finalize any necessary deals before the deadline. However, transfers cannot be processed on June 30th itself as it is not a working day, so some transfers may not be confirmed and registered until Monday. Last weekend, around £75 million in deals were agreed upon, surpassing the £30 million spent on the January transfer deadline day and approaching the £100 million spent across the Premier League in the entire January 2024 transfer window.
One strategy clubs are employing to boost their finances is selling academy players. When academy players are sold, clubs receive 100% profit to put into their accounts, while the buying club spreads out the payment over the length of the player’s contract using an accounting practice called amortization. This practice provides a significant financial boost for both clubs involved in the transfer.
Several clubs have already been active in the transfer market since it opened on June 14th. Aston Villa, Everton, and Chelsea have been particularly busy. Aston Villa recorded a loss of £119 million in their last accounts and needed to make moves quickly to avoid breaching PSR regulations. Everton faced a six-point deduction last season for two separate breaches, while Chelsea has spent approximately £1 billion since a takeover in 2023.
Villa and Everton have already completed deals with each other, with Lewis Dobbin moving to Villa Park and Tim Iroegbunam joining Everton, both for reported fees of around £9 million. Villa is also selling Omari Kellyman to Chelsea for £19 million, just two years after signing him for £600,000. Chelsea has made most of their signings on long-term contracts, spreading out payments to meet PSR requirements.
The Premier League has recently written to every club following concerns about potential loophole exploitation through swap deals. While there is no suggestion that clubs have broken any rules, the league’s director of governance has clarified that part of a transfer fee may need to be returned by the selling club if it is deemed inflated. This clarification aims to address any concerns about rivals selling players to each other to limit losses and exploit PSR regulations.
Looking ahead, there are several potential transfers on the horizon. Douglas Luiz’s transfer from Aston Villa to Juventus, which includes players and cash, is expected to be completed soon. Leicester City, who are already facing a charge for a PSR breach, could potentially sell midfielder Kiernan Dewsbury-Hall, who represents their best sellable asset. Chelsea has had a bid rejected for a player, and talks are ongoing, while Brighton & Hove Albion also has an interest. Everton rejected a bid from Manchester United for defender Jarrad Branthwaite, and Aston Villa reportedly turned down an offer from Tottenham for Jacob Ramsey.
As the ‘unofficial transfer deadline day’ approaches, Premier League clubs are working hard to ensure compliance with PSR regulations while making necessary deals to strengthen their squads. It remains to be seen which transfers will be confirmed this weekend and how clubs will navigate the financial landscape in the coming weeks.