Newcastle United has typically awarded five-year contracts to players, but a recent change in Premier League rules will prevent them, along with other clubs, from spreading the cost of a transfer fee over more than five years if longer contracts are given.
The Premier League clubs, including Newcastle United, have voted to align the rule on amortization of player registration costs with UEFA regulations. Previously, teams could extend the cost of a transfer over the entire duration of a player’s contract for Financial Fair Play compliance.
While Newcastle traditionally adheres to five-year contracts, other clubs, such as Chelsea, have taken advantage of the previous rule by offering extended contracts, like Enzo Fernandez and Mykhailo Mudryk for eight years, Benoit Badiashile for seven-and-a-half years, and Wesley Fofana for seven years. Although Chelsea can still propose such lengthy deals, the crucial change is that a transfer fee cannot be amortized beyond the fifth year.
A statement from the Premier League explained the amendment: “Premier League shareholders agreed to amend the rule on amortization of player registration costs to bring in line with UEFA’s regulations. Going forward, a five-year maximum will apply to all new or extended player contracts. Clubs also approved a rule amendment to enable the Premier League board, in circumstances where a club owes a transfer debt to another Premier League or EFL club, to stop the club registering more players until the outstanding payment has been made. The board can also have the option to deduct the amount from the club’s entitlement to the league’s central funds.”
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