Chelsea paid Enzo Fernandez’s €120 million release clause and signed him last month using a factoring company
They found a way to make a deal without breaking the rules for Financial Fair Play. For the deal to go through, Chelsea would “hire a factoring company.”
Explained how did Chelsea use a factoring company to sign Enzo Fernandez and avoid FFP violations this season
This has led many to wonder how Chelsea are doing this as after all, Financial Fair Play exists, and the club do not have a bottomless pit of money. Chelsea are using some interesting techniques to keep things legal, including reportedly using a factoring company.
To begin with, it is worth noticing that Chelsea are signing players on long contracts and this is good for numerous reasons, especially for accounting purposes.
Chelsea’s signing of Mudryk from Shaktar Donetsk cost approximately £80million. However, Chelsea will be sending this payment over an 10-year period, meaning in essence they are spending around £10million per year and a similar plan is in place with Badiashile, who is on a 7-year contract.
Therefore, using this approach for several different signings means that for accounting purposes, a much lower expenditure happens each year and this is how Chelsea can make it look as if they aren’t paying huge fees, as the money is split up year-on-year.
Even with the fees being channelled in an effective way for accounting purposes, Chelsea have also used a tool called “factoring”, to help fund their enormous spending.
Factoring is the practice of a business buying another business’ unpaid invoices and a third-party company is effectively buying Chelsea’s unpaid invoices from them. For example, if a club is due to pay Chelsea £10million per year for the next five years, the factoring company may pay Chelsea £45million upfront, in exchange for then receiving the five £10million annual payment.
Chelsea receives short-term money, at a loss of a small amount over five years, while the factoring company takes the short-term hit, but knows that in the long-term, they will be rewarded handsomely.
If Chelsea were to use a factoring company for a £100million purchase, the factoring company would pay the £100million to the football club that is selling the player that Chelsea are buying. Then Chelsea will pay the company back over a long period of time – often 10 years – with a small rate of interest.
Enzo Fernandez didn’t make his senior international debut until September 2022. In just a few months, he became a starter for Argentina and helped them win the World Cup.
Enzo Fernandez becomes the most ever paid player in Premier League
The 22-year-old midfielder’s rise to the top has been quick, even by the standards of modern football. Benfica only bought him from River Plate for about €14 million last summer. Now, Chelsea has bought him for €121 million, which is the most ever paid for a player in the Premier League and one of the most in the world.
The effects of Fernandez have been nothing short of amazing. In 2019, he played his first game for River Plate. A year later, he went on loan to Defensa y Justicia. In 2022, he played for River again under manager Marcelo Gallardo and scored 10 goals in 28 games.
Enzo Fernández to Chelsea… HERE WE GO! Agreement reached right now between Chelsea & Benfica 🚨🔵🇦🇷 #CFC #DeadlineDay
Important: clubs running to get the documents signed before end of the window, it’s finally agreed.
Boarding set to be completed — London ✈️ @TurkishAirlines pic.twitter.com/YGwY4QGseQ
— Fabrizio Romano (@FabrizioRomano) January 31, 2023
During the summer of 2022, Benfica bought him and gave him the No. 13 shirt that club legend Eusebio had worn. In 29 games, he scored four goals and set up seven more. The Liga BWIN head coaches named him the best midfielder in Portugal’s top league in August, October, and November. He also helped the team win their group in the UEFA Champions League, beating out Paris Saint-Germain and Juventus to get to the next round.
But Fernandez made the biggest splash with Argentina. The midfielder had played for the under-18 team before making his senior debut in a 3-0 win over Honduras in September 2022. In November 2022, he was named to Lionel Scaloni’s 26-man World Cup squad.
Unbelievably, he got used to international soccer so quickly that he was in the starting lineup by the last group-stage game against Poland. Fernandez went on to win the tournament and take home the trophy. He also won the FIFA Young Player Award for the tournament.
What about Enzo Fernandez’s position?
As a right-footed central midfielder, he was used as part of a “double-pivot” in Roger Schmidt’s 4-2-3-1 formation for Benfica, but he has played many different roles in his career.
When you look at the skills of a central midfielder, there’s usually one thing that stands out. Fernandez has only played 10 senior international games so far, but he was a big reason why Argentina won the World Cup in 2022 and had more total touches than Lionel Messi.
❗️Chelsea is contacting a factoring company so they can pay the release clause, can avoid FFP, and pay through time the money. @SICNoticias 💰🔵 from chelseafc
#Chelsea is contacting a factoring company so they can pay the release clause for Enzo Fernandez, can avoid FFP, and pay through time the money.
[@SICNoticias via @AlbicelesteTalk]
— Absolute Chelsea (@AbsoluteChelsea) January 31, 2023
What about Enzo Fernandez’s strengths?
Fernandez is so popular with Europe’s top clubs because he has a wide range of skills and knows how to use them well. One thing about his game that stands out right away is how fast he moves. He’s very eager to get the ball; he’s always moving, so he’s always ready to receive a pass.
And once he has it, he keeps moving it sideways to keep the game going and speed it up. Then, when there’s a more complicated way to pass, he’s happy to take the next step by picking line-breaking balls in the centre of the attack.
To know more about Enzo Fernandez, do follow The SportsGrail on a regular and frequent basis.
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