The Premier League’s ‘swap’ transfers that may expose a PSR loophole

The unusual flurry of transfer activity over the past few days has not gone unnoticed at Premier League headquarters.

Over the weekend, Everton and Aston Villa exchanged Lewis Dobbin and Tim Iroegbunam in separate transfers reported to be worth around £9m each.

This week, Chelsea are set to sell Dutch defender Ian Maatsen to Villa and buy Villa’s unproven teenager Omari Kellyman in separate deals worth a reported £37.5m and £19m respectively. Maatsen is said to be signing a six-year contract. So is Kellyman.

The figure exchanged for Kellyman is particularly eye-catching. The 18-year-old midfielder was bought by Villa in 2022 for £600,000 and has since made two Premier League appearances. Chelsea may rate Kellyman at £19m, but the website transfermarkt values their new signing at only £800,000.

The transfers have all come only days before the next accountancy deadline for the Premier League’s profit and sustainability rules (PSR), on 30 June. And while no one has been accused of breaking any regulations, The Independent understands that making transfers in order to circumvent PSR is in itself a breach of the league’s rules around acting in good faith.

What is PSR?

Profit and sustainability regulations permit teams to lose a maximum of £105m over a three-year period. Investments in infrastructure, academies, charity foundations and women’s football can be deducted so teams are compliant with PSR rules.

Clubs who have breached the rules, such as Everton and Nottingham Forest, have been hit with points deductions.

How do transfers help meet the rules?

Chelsea, Everton and Aston Villa are all acutely aware of their financial positions with regards to PSR.

Chelsea’s lavish transfer spending has seen the club become at risk of breaching the rules; Everton were docked a total of eight points last season for breaching the Premier League’s PSR regulations; and in March, Aston Villa confirmed a £119.6m loss in their end-of-year accounts, despite a season that saw their return to European football after more than a decade.

But an accountancy loophole can help to avoid a rule breach. This is because while the money received from a sold player can be immediately included in a club’s books, money spent on a transfer is allowed to be spread out across many years’ accounts, over the length of the player’s contract. This practice is called amortisation.

So, theoretically, Chelsea could book £19m profit in selling academy product Maatsen, while spreading out the cost of £37.5m Kellyman over his six-year deal. That would be a nice boost to the club’s numbers ahead of the PSR deadline.

Could the Premier League investigate?

Again, there is no allegation of wrongdoing by the clubs involved. But the league could look into a transfer to ensure it has been conducted on an arm’s length basis – so without collusion around ulterior motives like avoiding PSR rules.

If a transfer is found to have been conducted with the intention of circumventing rules then that deal could be subject to an independent assessment of whether it represents fair market value.