Premier League 'pens letter to clubs to explain its rules regarding fair valuation' amid fears they are using swap deals to exploit loopholes in financial rules before June 30 deadline
- The Premier League's current assessment period for PSR ends on June 30
- At least one club raised concerns about 'swap' deals being used as a loophole
- Clubs have since been warned not to pay each other inflated transfer fees
Swap deals, or at least multiple transfers between the same teams, appear to be back in fashion among some Premier League clubs.
Everton signed Tim Iroegbunam from Aston Villa for £9m last week, while Lewis Dobbin headed the opposite way for an undisclosed fee.
Villa also agreed a £37.5m deal to sign Ian Maatsen from Chelsea, with Omari Kellyman heading in the other direction for £19m - though both deals have not yet gone through.
Although it is understood that none of the aforementioned clubs have breached any rules, at least one other club has raised concerns about 'exchange' deals potentially being used to exploit a potential loophole in the Premier League's Profit and Sustainability Rules (PSR).
According to BBC Sport, the Premier League has now written to all 20 member clubs to explain its rules regarding the fair valuation of players involved in transfers.
Everton recently signed Tim Iroegbunam from fellow Premier League side Aston Villa
Villa then signed striker Lewis Dobbin (centre) from Everton for a similarly-sized transfer fee
The letter apparently warns clubs that if transfer fees are found to have been 'inflated' then a proportion of said fee would need to be returned by the selling club.
The Premier League's letter comes just days before June 30 - which has been dubbed by some as 'deadline day lite'.
June 30 is the accounting end date for the most recent financial fair play period and multiple clubs are keen to complete deals before the deadline in order to guarantee compliance with PSR.
The reason 'swap' deals may be popular but also controversial is based on how transfers are inputted onto balance sheets relating to PSR and financial fair play.
If Club A signs a player for, say, £10m and sells another player for £10m, the money they paid can be amortised over the length of the contract but the amount received can be immediately put on to their balance sheet.
The Premier League has sent a letter to all clubs, warning them not to pay each other inflated transfer fees, but there is no suggestion of wrongdoing by Everton or Villa
In the case of academy players, this can be inputted as pure profit.
Therefore, two teams trading academy products for significant transfer fees and each placing them on lengthy contracts could potentially result in both clubs receiving a huge boost in terms of PSR compliance.
However, the Premier League's letter is said to warn that clubs could be 'requested to provide information and evidence to assist determination of whether the transaction should be considered as being conducted at arm's length'.
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