Chelsea FC's move for Michael Olise suffers huge blow

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Reports now indicate that Chelsea FC's move for Michael Olise in the June 2024 transfer window has suffered a huge blow as talks progress.

Following initial reports of Chelsea reaching an agreement on personal terms for Crystal Palace's Michael Olise in one of the most anticipated June 2024 transfer window moves, the bid to Olise's parent club Crystal Palace has suffered a huge blow.

According to media outlets, clubs like Newcastle, Manchester United, Bayern Munich and others have inquired on what it would take to sign the France international.

This however is not the only stumbling block in Chelsea's bid to sign Olise, the transfer fee set by Crystal Palace has also become a case of concern for the Blues looking to abide by FFP rules.

It has been revealed that Crystal Palace will be looking to fix a price tag of 60 to 70 million pounds for clubs interested in signing Olise, a new development enabled by his January 2024 contract extension.

READ ALSO: Why Michael Olise's transfer to Chelsea could be a bad move

How do FFP laws in the Premier League affect Chelsea's bid for Olise?

Todd Boehly and Egbali

Under the Premier League's Profit and Sustainability Rules (PSR), clubs are restricted to a maximum loss of £105 million over any three-year span. This could be a huge concern for Chelsea as a move for Olise will further increase what has been categorised as loss on paper.

Dave Powell, Reach Plc's Business of Football Writer, explained how Chelsea might address Profit and Sustainability Rules (PSR) concerns after significant spending in recent seasons. "Whenever Chelsea are linked with more transfer spending, questions about their compliance with profit and sustainability rules arise," he stated.

According to football finance expert Swiss Ramble, as of April, Chelsea needed to generate £36 million to stay within the PSR limits, even after selling the club's hotel to a related party. Chelsea's effective player trading has supported their continued transfer market activity, though they will eventually face a shortage of profitable assets.

For instance, signing Olise and spreading his cost over the five-year amortization period would result in a £12 million charge in the club’s audited accounts starting next year a move which was adopted in the signing of Enzo Fernandez, Mudryk and Caicedo. Chelsea's fiscal year ends in June, so his registration transfer would likely occur after this period if they cannot sell players.

Ensuring PSR compliance is crucial for Chelsea to improve their financial standing for the 2023/24 year and create room for the following year.

By selling assets like Conor Gallagher and Trevoh Chalobah at a pure profit, Chelsea can address PSR issues and fund new signings, as revenue from sales can be immediately accounted for, while player purchases are spread out over the contract duration through amortization.

Chelsea needs a return to the Champions League and its financial benefits and is unlikely to risk sanctions, with moves expected before the end of the month.

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