Boehly and Clearlake have committed north of £300million in transfer fees on central midfielders alone in 2023 once deals for Lesley Ugochukwu and Andrey Santos are factored in. Overall, the numbers are even more staggering: Lavia will take the total transfer fee commitment past the £900million mark since Chelsea’s new American owners assumed control in June 2022 — and they are not done yet.
No other club in the world is operating this way, and it is
fair to say that Chelsea’s approach is ruffling feathers. There are growing
whispers of rival clubs complaining to the Premier League about their
spending, the manifestation of a broader disbelief inside and outside the game
that such outlay could possibly be compliant with UEFA’s financial fair play
(FFP) regulations, which allow clubs to lose around €90million over a
three-year period. What is more, last September they were placed on an FFP
watchlist by UEFA due to the size of their losses.
Yet Chelsea believe they have a strategy that will keep them
on the right side of club football’s financial controls.
Playing the
amortisation game
It has been widely documented that Chelsea have
exploited the legal limits of amortisation (the process of spreading a
transfer fee over the length of a player’s contract for accounting purposes) in
order to make their spending money go further. All of their January signings
were handed seven- or eight-year contracts, lowering their yearly cost on the
books.
Chelsea will not play in European competition this
season so do not have to worry about being within UEFA rules for now. They will
of course hope they return next season for many reasons, but the Premier League
give more leeway and therefore Chelsea more time to sort themselves out.
The majority of the players they have sold in this window
had either been at the club long enough to have relatively small remaining book
values (Havertz, Kovacic and Christian Pulisic) or are Cobham academy graduates
(Mount and Ruben Loftus-Cheek), who represent pure profit when sold.
Havertz, Mount and Kovacic alone netted Chelsea close to
£100million in accounting profit on player sales. That in theory could bankroll
as much as £500million in transfer fees amortised over five-year contracts,
without tipping the club into the red on player trading in the books.
In the course of the financial due diligence that preceded
their takeover last year, Boehly and Clearlake quickly identified that Roman
Abramovich had been happily paying what they regarded as a “Chelsea premium” in
terms of player salaries. Base wages
were well above the market rate across the board, with almost nothing tied to
performance-based incentives such as Champions League participation.
Since the restructuring of their football operation around
co-sporting directors Laurence Stewart and Paul Winstanley at the start of
2023, Chelsea have placed renewed emphasis on targeting players aged 23 or
younger, Younger players tend to be
more amenable to lower base salaries with performance incentives, which gives
Chelsea the opportunity to start them at a more affordable level and then
reward the best performers with pay rises as time goes by.
Boehly and Clearlake have essentially re-made Chelsea’s
squad as an investment portfolio: a collection of talented young footballers
committed to Stamford Bridge for what should be their prime years, but whose
transfer values could fall as well as rise depending on any number of variables
that can affect individual development.
Can you lift the Premier League or Champions League with
almost exclusively young players? Will assembling a group of players largely in
the same age bracket prove an impediment to developing the kind of dressing
room dynamic made possible by the best blends of youth and experience? Time will
tell. It’s a risk, but probably one
worth taking.
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