TA: Chelsea are not expected to breach the settlement agreement, but the financial situation remains very tight

Hupu reported on October 13 that TheAthleticUK sports and finance reporter Chris Weatherspoon answered fans’ questions.

Any insights into Chelsea's settlement with UEFA and how it will impact their transfer business in the coming years? After this summer's huge net transfer spend, are any Premier League teams facing a similar fate?

At the risk of being led astray, TheAthletic has reported on this story several times in recent weeks, delving into UEFA's overall rules and covering the restrictions Chelsea (and Aston Villa) are placed on when registering new players for European competitions.

Then, the situation of nine English clubs participating in European competitions this season in terms of UEFA financial rules is analyzed, which involves a lot of Chelsea's situation.

In short: The Settlement Agreement (SA) sets limits on Chelsea's losses under football revenue rules over the next three seasons, with losses for each season to be assessed individually rather than on a three-year cycle as is normally the case under the rules.

The 2028-29 season is the final year of the Settlement Agreement and Chelsea must comply with the standard three-year rolling restrictions that other clubs must adhere to.

In terms of the impact on the transfer business, we have already seen Chelsea sell players in large numbers this summer - although Chelsea do so every year.

This is directly related to following the rules: the club has suffered huge operating losses in recent years, and although revenue has increased due to winning the Club World Cup and returning to the Champions League, Chelsea still needs profits from player sales to prop up its bottom line. They will most likely continue to aggressively sell players over the next few seasons.

As for other clubs at risk, again (sorry), the second linked article above should be helpful. Newcastle and Nottingham Forest are expected to break UEFA rules this season, according to predictions from TheAthletic.

How effective is Chelsea's strategy? This seemed crazy at first, but now it seems like their potential is huge. I say "potential" because they invested a lot of money in the players they are selling now. So, how much did they spend on these players? Are they really doing a smart thing and making a profit from it?

This question is difficult to answer, because a reasonable assessment of Chelsea's recent performance would have to admit that they broke two of UEFA's major financial rules last season and had to resort to some rather - or rather "creative" methods to avoid making the same mistake in their domestic league.

I have no doubt that accepting some form of punishment was part of the plan (and with all the money they spent, it's no small oversight), but it's hard to argue that it's a strategy that deserves extra credit.

As for whether this strategy is effective now, I think there are two answers: effective currently; effective long-term? Let's wait and see.

They are basically adopting an enhanced version of the player trading model, and this summer's transfer fee of approximately 300 million pounds - which to a large extent ensures that they comply with the settlement agreement with UEFA. As we reported last month, sources familiar with the matter expect Chelsea to comply with the terms of the settlement until the 2025-26 season.

The club is currently operating at a huge loss and needs the transfer of these players to make up for the overall loss.

This is particularly important in the near future, as the £76.5m profit from the sale of hotels and car parks for the 2022-23 season will be excluded from the PSR calculations (UEFA did not allow them to do this, so they were never included in the calculation), while the £198.7m profit from the sale of the women's team will also be reduced next year.

To be fair, Chelsea's plan appears to be to continue high player turnover and use transfer revenue as an additional source of income, as Chelsea have done for many years. Whether they can live up to expectations remains to be seen.