You don’t see much of Todd Boehly these days. In the first weeks after he fronted the Clearlake takeover of Chelsea, he was a regular presence, telling European football what it could learn from US sport, proudly announcing his disruptive intent. Which is a shame: it would be good to know exactly where spending $1bn to transform a Champions League-winning side into one that sits 11th in the Premier League fits into his master plan.
There had been a thought around the turn of the year that things might be falling into place for Chelsea. They reached the Carabao Cup final and won three league games in a row to haul themselves into the top half of the table. Maybe Mauricio Pochettino was at last starting to find some order amid a chaotic squad. The last two games have obliterated that idea.
Having let in four while being comprehensively outplayed at Liverpool in midweek, they leaked another four at home to Wolves on Sunday. The former may be understandable, the latter is not. This wasn’t a team having four chances and taking them all; Wolves were much the better side and could easily have won by more. Chelsea were a shambles, players arguing among themselves as sections of the crowd called for Pochettino to be sacked and wistfully sung about the Roman Abramovich era.
The problems go far deeper than results. In the short term, Chelsea’s activities since the Boehly/Clearlake takeover are not a problem. The football finance expert Swiss Ramble noted in August that the transfer activity since the takeover was exactly neutral, with £143m in wages plus £116m in amortisation from purchases offset by a £192m reduction in wages and £62m in amortisation from sales. Even better, there was a £215m profit in terms of player sales.
Which looks excellent – in the short term. But Chelsea’s signings have committed them to £1.9bn of future spending. And this is a club that has posted operating losses in each of the past 10 seasons, a picture that has been getting worse in the past four years. In 2021-22 operating losses were £224m, bringing total losses over the decade to £944m. That has to an extent been balanced by £706m in player sales.
Taking into account the reduction in wage bill, and projecting other income and outgoings for this season, Swiss Ramble calculated estimated losses of £131.6m for 2023-24 to go with £70.2m last season and £121.4m the season before that. There are allowable deductions for ‘healthy’ spending such as that on the academy and women’s team, which can be estimated at £40m or so a season. Which, when the extra allowances for losses in the Covid season are taken into account, kept Chelsea just above the threshold of £105m in losses for the three-year period up to 2022-23.
For 2023-24, though, they would appear to be in big trouble, with Swiss Ramble estimating their losses for the three-year assessment period at £201m – and that was on an assumption they would finish sixth, which now looks extremely optimistic.
Uefa’s regulations are not immediately relevant but it is changing its FFP model to a cost control ratio, by which player wages, transfers and agent fees will by 2025 be limited to 70% of revenue and profit on player sales. At the moment, Chelsea’s is around 90%.
Chelsea are already being investigated for possible historical breaches of FFP in the Abramovich era, which could lead to points deductions (or worse) that would make their job even harder going forward. And it is extremely hard already. They just about kept their heads above water in the three-year period to last June but that was with exceptional sales. They don’t have many academy products or fully amortised players left. Say they sold Moisés Caicedo next summer for the £100m they paid for him: yes, they would reduce costs from his amortisation and wages, but his eight-year contract means the profit would only be £100m minus his book value which, with seven of the eight years of his contract remaining would be £87.5m: that is, £12.5m.
To keep making the sort of profits that have sustained them over the past decade will be extremely difficult. Those academy products who remain, the likes of Conor Gallagher and Reece James, are likely to find the owners extremely eager to listen to offers. And of course this is the reverse of standard footballing wisdom, that clubs benefit from having a core of players brought up in the ways of club, the John Terry and Frank Lampard figures, totemic whether through education or longevity, who have an attachment to the institution that goes beyond salary.
Perhaps Chelsea will be granted additional dispensation for losses suffered after the imposition of sanctions on Abramovich, although there are no guarantees, but with the likelihood of no Champions League football, it’s hard to see how revenues will rise significantly next season. With 12 players on contracts of eight years or more, the amortisation trick looks increasingly like an albatross.
This is a club in a terrible mess and the only people who can really be blamed are the disruptive new owners.
This is an extract from Soccer with Jonathan Wilson, a weekly look from the Guardian US at the game in Europe and beyond. Subscribe for free here. Have a question for Jonathan? Email soccerwithjw@theguardian.com, and he’ll answer the best in a future edition
