Premier League writes to clubs over ‘swap deal’ concerns

The Premier League has communicated with its clubs to clarify regulations concerning the fair valuation of players involved in transfers, prompted by “a significant number” seeking clarification following recent swap deals.

Earlier this week, BBC Sport disclosed that at least one club was planning to raise this issue with the Premier League.

Concerns have arisen that some clubs might be engaging in player exchanges to potentially exploit a loophole in Profit & Sustainability Rules (PSR), which restrict financial losses, ahead of an upcoming accounting deadline on Sunday.

In its correspondence, the Premier League cautioned that if it determines a transfer fee to be “inflated,” the selling club may be required to reimburse a portion of that fee.

Academy products Tim Iroegbunam and Lewis Dobbin were reportedly traded in separate transactions between Everton and Aston Villa for £9m each. Subsequently, BBC Sport reported that Villa was close to selling another academy prospect, teenager Omari Kellyman, to Chelsea for approximately £19m. Additionally, Chelsea’s homegrown Dutch defender Ian Maatsen was confirmed to move in the opposite direction for £37.5m in another separate deal.

It should be noted that there is no implication that any of the clubs involved have violated regulations.

When a club sells a player, any profit from the transfer is recorded entirely in that year’s financial accounts, particularly with homegrown academy players contributing to ‘pure’ profit. Conversely, the amount paid by the buying club is amortized over the contract’s duration, spreading the cost.

Therefore, if clubs agree to swap players, especially academy graduates, it could potentially yield a significant financial benefit.

In the letter – which has been seen by BBC Sport – clubs are warned by the league’s director of governance that if it identifies “a scenario where a selling club has received an inflated transfer fee for a player in a transaction not considered to be conducted at arm’s length, the selling club would be required to return the amount in excess of fair market value back to the buying club.”

Clubs are also reminded that they could also be “requested to provide information and evidence to assist determination of whether the transaction should be considered as being conducted at arm’s length”.

If it is not, “a fair market value assessment of the transfer to determine the value the transaction can be approved at will take place”, the letter explains.

It adds: “If the board concludes that the transfer is not at fair market value, it will require that the value be restated.”

Clubs are also told that “officials and directors should remain cognisant of their wider legal and regulatory obligations regarding financial practices and the implications of failing to meet these obligations.”