Romeo Lavia - another bullet dodged. Code thinks he's bang average too

[Barrington Womble]

20 minutes ago, CapeRed said:

It’s fuckin laughable, apparently they are in for Olise now . Chelsea doing more damage to the transfer market than those Saudi clubs.

Olise is a good player. He has a release clause too doesn't he? I'm surprised nobody got there earlier. 

 

All this is very reminiscent of early abramovich and early city. 

[CapeRed]

3 minutes ago, Barrington Womble said:

Olise is a good player. He has a release clause too doesn't he? I'm surprised nobody got there earlier. 

 

All this is very reminiscent of early abramovich and early city. 

It is and I’m pretty sure Chelsea let him go as a youngster.

[Pidge]

Big upgrade on Mudryk, at the very least.

[Barrington Womble]

1 minute ago, Pidge said:

Big upgrade on Mudryk, at the very least.

Shite that lad isn't he? 

[BeefStroganoff]

Two weeks and if no improvement im walking away. I was hoping they would pull me back in this summer but I should have known better.

 

Bitterly, bitterly disappointing where we are and devastating how far we have fallen from a few years ago. Football never stands still and our owners have fallen into the age old trap.

[Baresi]

10 hours ago, lifetime fan said:

So as I said, they were buying Caicedo and spending money on top of that. 
 

And as I said FFP had fuck all to do with the spending plans. 

 

Apologies for the formatting - This is from The Athletic....

 

For the third transfer window running, Chelsea’s spending is the talk of football.

More specifically, it is Todd Boehly and Clearlake Capital’s seemingly insatiable appetite for large transfer fees that is dominating the conversation.

A deal worth £115million ($146m) for Brighton midfielder Moises Caicedo has ensured that Enzo Fernandez held the British transfer record for just six months following his £106million move to Stamford Bridge. Liverpool, edged out in that pursuit, now appear to have been deprived of their secondary midfield target after Southampton’s Romeo Lavia also made his preference Chelsea in a move that will be worth £50million plus add-ons.

That means 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.

Caicedo celebrates his move alongside his mother (Photo: Darren Walsh/Chelsea FC via Getty Images)

A new goalkeeper should replace the loan departure of Kepa Arrizabalaga to Real Madrid, and the club would like to add two more attackers — and all this without the revenue from a primary shirt sponsor (yet), or Champions League participation in 2023-24.

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 €90m 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.

The Athletic will endeavour to explain. You — and eventually football’s governing bodies — can then make your own mind up.

Transfer fees are overrated

A big obstacle to understanding what Chelsea are doing is that the way most people routinely think about football transactions — namely, by focusing almost entirely on the transfer fee — is often not the way that most football clubs think about them. And certainly not Chelsea.

Here is an example: Club A signs a player for £50million and gives him a five-year contract worth £100,000 a week. Club B signs a player on a free transfer and agrees to pay him around £400,000 a week. Which player do you think is more expensive on a yearly basis?

If your answer was Club B’s signing, you are on the right track. A weekly wage of £400,000 equates to an annual salary of a little more than £20million, while the total cost of an amortised £50million transfer fee over a five-year contract with a £100,000-a-week salary on the accounts is around £15million.

Viewed within this context, it is very possible that the most expensive player acquisition in English football history might actually have been Erling Haaland’s move to Manchester City in the summer of 2022, once the Norwegian’s massive salary, signing-on bonus and agent fees are added to his nominally cheap £51million release fee from Borussia Dortmund.

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.

Fernandez’s deal broke the British transfer record (Photo: Darren Walsh/Chelsea FC via Getty Images)

UEFA ruled that, from this summer, transfer fees can only be amortised over a maximum of five years regardless of contract length, and the Premier League is likely to follow suit sooner rather than later. But even with the closure of these “FFP loopholes”, amortisation remains a powerful tool to help power Chelsea’s spending. And they’d already used the rule to good effect before the rule change came in.

What is more, 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.

So they believe they are all right. Others are less sure…

Chelsea are selling, not just buying. But is it enough?

Boehly and Clearlake have generated more than £250million from player sales in the past three transfer windows. Around £200million of that has been made this summer, primarily through the departures of Kai Havertz to Arsenal, Mason Mount to Manchester United, Mateo Kovacic to Manchester City and Kalidou Koulibaly and Edouard Mendy to Saudi Pro League clubs.

That figure comes nowhere near to balancing Chelsea’s outlay on transfer fees, but for accounting purposes it does not need to. Transfer fees for player sales are registered in full on the books immediately, minus the player’s remaining amortised cost.

The good news for Boehly and Clearlake is that 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. It would of course mean that income needs to consistently come in over the five years in order to keep ‘paying off’ the fees for incoming transfers.

Chelsea’s estimated amortised spending in the past three windows under Boehly and Clearlake, using initial transfer figures reported by The Athletic, comes to £157.2million; this significantly lower number is almost entirely offset by an accounting profit from player sales of £149.6million over the same period.

Mount was sold with all the profit banked immediately (Photo: Mike Hewitt/Getty Images)

It is clear to see, then, that big clubs have more room than it might first appear to manoeuvre in the transfer market without falling foul of FFP — and the restrictions themselves are loosening; from the 2023-24 season, clubs judged to be in good financial health could be permitted to lose as much as €90million over a three-year monitoring period, triple the old limit of €30million.

Because a club’s accounts are published almost a year after the relevant deals take place, it is currently too early to know if Chelsea’s current spending will see them post a loss or profit. But in terms of hitting that number over three years of about €90million loss, it is worth bearing in mind that last year’s accounts saw Chelsea post a £121million loss (€140m). The season before that saw a £156m loss (€181m), which was the second biggest in Premier League history, so the club will need to start turning a profit soon, whether that be through increased player sales, improved commercial deals or a return to the Champions League (where you’d expect to make about £3-4m per home game).

Time will tell, but time is exactly what the amortisation of these transfer fees is buying the ownership.

Boehly and Clearlake identified on arrival that Chelsea were ripe for a massive rebuild, with a combination of expensive players almost fully amortised on the books and an academy that produces a steady conveyer belt of saleable young footballers, as well as a handful of elite prospects good enough to become first-team contributors.

But there is another key aspect to what Chelsea are trying to do…

The wage bill is coming down

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.

The massive squad turnover at Stamford Bridge over the past year has been as much about shedding contracts as players. Boehly and Clearlake have been determined to bring the club’s salary commitments down to a competitive market level, and they are well aware that the earning expectations of footballers tend to rise as they get older.

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, with Christopher Nkunku (whose transfer was agreed almost a year ago), Axel Disasi and goalkeeper Robert Sanchez the only exceptions.

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. Lavia will almost certainly be on a lower wage as he begins his career at Stamford Bridge than former Southampton team-mate James Ward-Prowse is on at West Ham.

Behdad Eghbali (left) and Boehly are leaving rivals confused and concerned (Photo: Nick Potts/PA Images via Getty Images)

Chelsea also remain committed to longer contracts even as amortisation benefits are reduced; Boehly and Clearlake believe they give players greater security and the club more protection on the value of their assets. It is hoped that lower salaries across the board will mean players who disappoint at Stamford Bridge will not be as difficult to offload as Romelu Lukaku and Hakim Ziyech, two of the last lavishly paid survivors of the Abramovich era.

There are still some high earners on Chelsea’s books, Raheem Sterling and Nkunku chief among them. But overall Boehly and Clearlake believe they have saved tens of millions of pounds in annual salary commitments for the first-team squad — money they are re-deploying to spend on transfer fees.

Chelsea’s strategy is not without risk

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.

Not all of the signings are expected to flourish, but the talent identification and development skills of the staff led by Stewart and Winstanley are being backed to ensure the successes outweigh the failures. If they do not, Chelsea will likely under-achieve on the pitch and these amortised fees will add up, limiting their options for correcting course.

One of the Premier League’s oldest squads has been transformed into the youngest by owners attempting to scale up something akin to the recruitment models of Monaco, RB Leipzig and Brighton to power an elite European club. Chelsea must now balance an economic requirement to develop the young talent they have assembled for themselves and for others, with the more immediate football demands of competing at the very top of the sport.

This particular tightrope has never been walked, or arguably even attempted, by a club of such size and recent winning pedigree. 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?

Boehly and Clearlake are betting the answers to these questions favour them, and that their approach to transfers and squad building puts Chelsea on a path to sustained sporting success as well as financial growth. Everyone else in football will be watching closely to see what happens next.

 

 

 

[Barrington Womble]

17 minutes ago, Baresi said:

Apologies for the formatting - This is from The Athletic....

 

For the third transfer window running, Chelsea’s spending is the talk of football.

More specifically, it is Todd Boehly and Clearlake Capital’s seemingly insatiable appetite for large transfer fees that is dominating the conversation.

A deal worth £115million ($146m) for Brighton midfielder Moises Caicedo has ensured that Enzo Fernandez held the British transfer record for just six months following his £106million move to Stamford Bridge. Liverpool, edged out in that pursuit, now appear to have been deprived of their secondary midfield target after Southampton’s Romeo Lavia also made his preference Chelsea in a move that will be worth £50million plus add-ons.

That means 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.

Caicedo celebrates his move alongside his mother (Photo: Darren Walsh/Chelsea FC via Getty Images)

A new goalkeeper should replace the loan departure of Kepa Arrizabalaga to Real Madrid, and the club would like to add two more attackers — and all this without the revenue from a primary shirt sponsor (yet), or Champions League participation in 2023-24.

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 €90m 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.

The Athletic will endeavour to explain. You — and eventually football’s governing bodies — can then make your own mind up.

Transfer fees are overrated

A big obstacle to understanding what Chelsea are doing is that the way most people routinely think about football transactions — namely, by focusing almost entirely on the transfer fee — is often not the way that most football clubs think about them. And certainly not Chelsea.

Here is an example: Club A signs a player for £50million and gives him a five-year contract worth £100,000 a week. Club B signs a player on a free transfer and agrees to pay him around £400,000 a week. Which player do you think is more expensive on a yearly basis?

If your answer was Club B’s signing, you are on the right track. A weekly wage of £400,000 equates to an annual salary of a little more than £20million, while the total cost of an amortised £50million transfer fee over a five-year contract with a £100,000-a-week salary on the accounts is around £15million.

Viewed within this context, it is very possible that the most expensive player acquisition in English football history might actually have been Erling Haaland’s move to Manchester City in the summer of 2022, once the Norwegian’s massive salary, signing-on bonus and agent fees are added to his nominally cheap £51million release fee from Borussia Dortmund.

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.

Fernandez’s deal broke the British transfer record (Photo: Darren Walsh/Chelsea FC via Getty Images)

UEFA ruled that, from this summer, transfer fees can only be amortised over a maximum of five years regardless of contract length, and the Premier League is likely to follow suit sooner rather than later. But even with the closure of these “FFP loopholes”, amortisation remains a powerful tool to help power Chelsea’s spending. And they’d already used the rule to good effect before the rule change came in.

What is more, 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.

So they believe they are all right. Others are less sure…

Chelsea are selling, not just buying. But is it enough?

Boehly and Clearlake have generated more than £250million from player sales in the past three transfer windows. Around £200million of that has been made this summer, primarily through the departures of Kai Havertz to Arsenal, Mason Mount to Manchester United, Mateo Kovacic to Manchester City and Kalidou Koulibaly and Edouard Mendy to Saudi Pro League clubs.

That figure comes nowhere near to balancing Chelsea’s outlay on transfer fees, but for accounting purposes it does not need to. Transfer fees for player sales are registered in full on the books immediately, minus the player’s remaining amortised cost.

The good news for Boehly and Clearlake is that 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. It would of course mean that income needs to consistently come in over the five years in order to keep ‘paying off’ the fees for incoming transfers.

Chelsea’s estimated amortised spending in the past three windows under Boehly and Clearlake, using initial transfer figures reported by The Athletic, comes to £157.2million; this significantly lower number is almost entirely offset by an accounting profit from player sales of £149.6million over the same period.

Mount was sold with all the profit banked immediately (Photo: Mike Hewitt/Getty Images)

It is clear to see, then, that big clubs have more room than it might first appear to manoeuvre in the transfer market without falling foul of FFP — and the restrictions themselves are loosening; from the 2023-24 season, clubs judged to be in good financial health could be permitted to lose as much as €90million over a three-year monitoring period, triple the old limit of €30million.

Because a club’s accounts are published almost a year after the relevant deals take place, it is currently too early to know if Chelsea’s current spending will see them post a loss or profit. But in terms of hitting that number over three years of about €90million loss, it is worth bearing in mind that last year’s accounts saw Chelsea post a £121million loss (€140m). The season before that saw a £156m loss (€181m), which was the second biggest in Premier League history, so the club will need to start turning a profit soon, whether that be through increased player sales, improved commercial deals or a return to the Champions League (where you’d expect to make about £3-4m per home game).

Time will tell, but time is exactly what the amortisation of these transfer fees is buying the ownership.

Boehly and Clearlake identified on arrival that Chelsea were ripe for a massive rebuild, with a combination of expensive players almost fully amortised on the books and an academy that produces a steady conveyer belt of saleable young footballers, as well as a handful of elite prospects good enough to become first-team contributors.

But there is another key aspect to what Chelsea are trying to do…

The wage bill is coming down

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.

The massive squad turnover at Stamford Bridge over the past year has been as much about shedding contracts as players. Boehly and Clearlake have been determined to bring the club’s salary commitments down to a competitive market level, and they are well aware that the earning expectations of footballers tend to rise as they get older.

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, with Christopher Nkunku (whose transfer was agreed almost a year ago), Axel Disasi and goalkeeper Robert Sanchez the only exceptions.

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. Lavia will almost certainly be on a lower wage as he begins his career at Stamford Bridge than former Southampton team-mate James Ward-Prowse is on at West Ham.

Behdad Eghbali (left) and Boehly are leaving rivals confused and concerned (Photo: Nick Potts/PA Images via Getty Images)

Chelsea also remain committed to longer contracts even as amortisation benefits are reduced; Boehly and Clearlake believe they give players greater security and the club more protection on the value of their assets. It is hoped that lower salaries across the board will mean players who disappoint at Stamford Bridge will not be as difficult to offload as Romelu Lukaku and Hakim Ziyech, two of the last lavishly paid survivors of the Abramovich era.

There are still some high earners on Chelsea’s books, Raheem Sterling and Nkunku chief among them. But overall Boehly and Clearlake believe they have saved tens of millions of pounds in annual salary commitments for the first-team squad — money they are re-deploying to spend on transfer fees.

Chelsea’s strategy is not without risk

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.

Not all of the signings are expected to flourish, but the talent identification and development skills of the staff led by Stewart and Winstanley are being backed to ensure the successes outweigh the failures. If they do not, Chelsea will likely under-achieve on the pitch and these amortised fees will add up, limiting their options for correcting course.

One of the Premier League’s oldest squads has been transformed into the youngest by owners attempting to scale up something akin to the recruitment models of Monaco, RB Leipzig and Brighton to power an elite European club. Chelsea must now balance an economic requirement to develop the young talent they have assembled for themselves and for others, with the more immediate football demands of competing at the very top of the sport.

This particular tightrope has never been walked, or arguably even attempted, by a club of such size and recent winning pedigree. 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?

Boehly and Clearlake are betting the answers to these questions favour them, and that their approach to transfers and squad building puts Chelsea on a path to sustained sporting success as well as financial growth. Everyone else in football will be watching closely to see what happens next.

 

 

 

When you read that it basically seems like an easy win for Chelsea! Which probably means it was 90% written by someone at Chelsea and someone in the athletic just got to put their name to the PR exercise. Much of what they say makes sense....until you think about their singings. There's talk they're paying caicedo anything from 220k to 300k. And do they seriously think if he establishes himself over the next 2 years as a world class performer, he won't want a pay rise to match the market rate? Caciedo has secured his future with with this move. It feels pretty unlikely if he's shit he will be quite so easy to move on. 

[3 Stacks]

20 minutes ago, Barrington Womble said:

When you read that it basically seems like an easy win for Chelsea! Which probably means it was 90% written by someone at Chelsea and someone in the athletic just got to put their name to the PR exercise. Much of what they say makes sense....until you think about their singings. There's talk they're paying caicedo anything from 220k to 300k. And do they seriously think if he establishes himself over the next 2 years as a world class performer, he won't want a pay rise to match the market rate? Caciedo has secured his future with with this move. It feels pretty unlikely if he's shit he will be quite so easy to move on. 

Theres probably a few things that can happen that could make it all go wrong, but Id find it completely unsurprising if Boehly looked at FFP and figured out a bunch of successful loopholes and ways to get around it. We know its a useless mechanism and although he is a complete dumbass in a football sense, he definitely knows what he is doing financially. 

 

But yeah, the big caveat seems like its that players surely will want to improve their contracts at some point, and so then what. 

[Barrington Womble]

1 minute ago, 3 Stacks said:

Theres probably a few things that can happen that could make it all go wrong, but Id find it completely unsurprising if Boehly looked at FFP and figured out a bunch of successful loopholes and ways to get around it. We know its a useless mechanism and although he is a complete dumbass in a football sense, he definitely knows what he is doing financially. 

 

But yeah, the big caveat seems like its that players surely will want to improve their contracts at some point, and so then what. 

I've no doubt he'll try that. And I would think PL and UEFA regs you can probably drive a bus through them. 

[dave u]

I hope half of their new signings turn out to be shit and then just Winston Bogarde the shit out of them.

[dave u]

2 hours ago, Barrington Womble said:

Shite that lad isn't he? 

 

He'll always have that debut cameo at Anfield though.

[Barrington Womble]

8 minutes ago, dave u said:

 

He'll always have that debut cameo at Anfield though.

Oh yeah, when sky creamed their kecks because he could run quicker than milner. 

[Manny]

I read that article this morning and I think there are two major issues with it. One is that it basically suggests that they'll need £100m - £150m more than they have coming through the club at the moment consistently every year for the next 5-10 years. That's quite a fucking big gap - CL football alone won't do it and that's not reliable income as it's competitive. There's lots of fluff about making up a commercial gap as that was something that wasn't properly exploited by the old regime but we've been on a long journey to raise that. They need to do it for next season - ideally for this one.

 

And that's just to pay for these signings so far. The assumption seems to be that this is it - a big spree and then spend the next 5-10 years paying it off. Except that not all of these signings will come off, and they'll need to buy more players (whilst potentially carrying the cost of the signings that have failed as they sit and collect their wages for the better part of a decade) and therefore find even more than the £150m extra they need per season. In fact such do they seem to be hooked on the transfer market from boardroom to stand, I can't see how they don't continue. They solve their problems in the transfer market and not on the training field - it's culturally endemic to the club.

 

It honestly feels like the Leeds Ponzi Trap in terms of the attitude of "increase costs now and then hope revenue follows in its wake, and then further increase costs and hope revenue follows even more in that wake, then increase costs...", except they're probably being bankrolled by the Saudis and therefore there's no danger of loans being called in. So the only other barrier is FFP, and their attitude to FFP blatantly seems to be "it'll be years down the line, it'll take years to make the charges stick, we'll tie you up in court and ride out the punishment because it won't fit the crime."

 

They're a fucking cunt club, as I said on another thread, a perfect standard bearer for the modern cunt fan and that loadsamoney part of the world.

[CapeRed]

6 minutes ago, dave u said:

I hope half of their new signings turn out to be shit and then just Winston Bogarde the shit out of them.

I doubt any of their signings is on less than R150k a week.

[Bobby Hundreds]

A season or two down the line how are Chelsea going to buy the next big things. Players aren't going to want to walk away from those 8 year contracts.

[CapeRed]

One of the Premier League’s oldest squads has been transformed into the youngest by owners attempting to scale up something akin to the recruitment models of Monaco, RB Leipzig and Brighton to power an elite European club

 

Is it fuck the same model. Which one of those clubs has spent 900M over 2 windows . Fuckin load of shite.

[El Dangerous]

8 minutes ago, Bobby Hundreds said:

A season or two down the line how are Chelsea going to buy the next big things. Players aren't going to want to walk away from those 8 year contracts.

They’ll sell them to Saudi Arabian clubs that definitely have no ties to Chelsea.

[Barrington Womble]

12 minutes ago, Bobby Hundreds said:

A season or two down the line how are Chelsea going to buy the next big things. Players aren't going to want to walk away from those 8 year contracts.

 

 

This is the thing isn't it. And it's working now because they've sold 200m or whatever worth of talent with relatively low book values. As an example, mudryk is looking shite. He's on a 8 year deal. If they sell him this summer, they'll have knocked 20m off his book value max, so they'll still need 60m just to break even and that's assuming someone will take on the remaining 6 years of his 100k per week deal. 

 

5 minutes ago, CapeRed said:

One of the Premier League’s oldest squads has been transformed into the youngest by owners attempting to scale up something akin to the recruitment models of Monaco, RB Leipzig and Brighton to power an elite European club

 

Is it fuck the same model. Which one of those clubs has spent 900M over 2 windows . Fuckin load of shite.

Like I said before, it looks like it was written by Chelsea's PR team. 

[CapeRed]

1 minute ago, Barrington Womble said:

 

 

This is the thing isn't it. And it's working now because they've sold 200m or whatever worth of talent with relatively low book values. As an example, mudryk is looking shite. He's on a 8 year deal. If they sell him this summer, they'll have knocked 20m off his book value max, so they'll still need 60m just to break even and that's assuming someone will take on the remaining 6 years of his 100k per week deal. 

 

Like I said before, it looks like it was written by Chelsea's PR team. 

Like I said before, it looks like it was written by Chelsea's PR team. 
 

yip 100%

[aws]

They’re mortgaging their future and gambling that things will work out for them . 

[CapeRed]

1 hour ago, Baresi said:

Apologies for the formatting - This is from The Athletic....

 

For the third transfer window running, Chelsea’s spending is the talk of football.

More specifically, it is Todd Boehly and Clearlake Capital’s seemingly insatiable appetite for large transfer fees that is dominating the conversation.

A deal worth £115million ($146m) for Brighton midfielder Moises Caicedo has ensured that Enzo Fernandez held the British transfer record for just six months following his £106million move to Stamford Bridge. Liverpool, edged out in that pursuit, now appear to have been deprived of their secondary midfield target after Southampton’s Romeo Lavia also made his preference Chelsea in a move that will be worth £50million plus add-ons.

That means 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.

Caicedo celebrates his move alongside his mother (Photo: Darren Walsh/Chelsea FC via Getty Images)

A new goalkeeper should replace the loan departure of Kepa Arrizabalaga to Real Madrid, and the club would like to add two more attackers — and all this without the revenue from a primary shirt sponsor (yet), or Champions League participation in 2023-24.

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 €90m 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.

The Athletic will endeavour to explain. You — and eventually football’s governing bodies — can then make your own mind up.

Transfer fees are overrated

A big obstacle to understanding what Chelsea are doing is that the way most people routinely think about football transactions — namely, by focusing almost entirely on the transfer fee — is often not the way that most football clubs think about them. And certainly not Chelsea.

Here is an example: Club A signs a player for £50million and gives him a five-year contract worth £100,000 a week. Club B signs a player on a free transfer and agrees to pay him around £400,000 a week. Which player do you think is more expensive on a yearly basis?

If your answer was Club B’s signing, you are on the right track. A weekly wage of £400,000 equates to an annual salary of a little more than £20million, while the total cost of an amortised £50million transfer fee over a five-year contract with a £100,000-a-week salary on the accounts is around £15million.

Viewed within this context, it is very possible that the most expensive player acquisition in English football history might actually have been Erling Haaland’s move to Manchester City in the summer of 2022, once the Norwegian’s massive salary, signing-on bonus and agent fees are added to his nominally cheap £51million release fee from Borussia Dortmund.

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.

Fernandez’s deal broke the British transfer record (Photo: Darren Walsh/Chelsea FC via Getty Images)

UEFA ruled that, from this summer, transfer fees can only be amortised over a maximum of five years regardless of contract length, and the Premier League is likely to follow suit sooner rather than later. But even with the closure of these “FFP loopholes”, amortisation remains a powerful tool to help power Chelsea’s spending. And they’d already used the rule to good effect before the rule change came in.

What is more, 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.

So they believe they are all right. Others are less sure…

Chelsea are selling, not just buying. But is it enough?

Boehly and Clearlake have generated more than £250million from player sales in the past three transfer windows. Around £200million of that has been made this summer, primarily through the departures of Kai Havertz to Arsenal, Mason Mount to Manchester United, Mateo Kovacic to Manchester City and Kalidou Koulibaly and Edouard Mendy to Saudi Pro League clubs.

That figure comes nowhere near to balancing Chelsea’s outlay on transfer fees, but for accounting purposes it does not need to. Transfer fees for player sales are registered in full on the books immediately, minus the player’s remaining amortised cost.

The good news for Boehly and Clearlake is that 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. It would of course mean that income needs to consistently come in over the five years in order to keep ‘paying off’ the fees for incoming transfers.

Chelsea’s estimated amortised spending in the past three windows under Boehly and Clearlake, using initial transfer figures reported by The Athletic, comes to £157.2million; this significantly lower number is almost entirely offset by an accounting profit from player sales of £149.6million over the same period.

Mount was sold with all the profit banked immediately (Photo: Mike Hewitt/Getty Images)

It is clear to see, then, that big clubs have more room than it might first appear to manoeuvre in the transfer market without falling foul of FFP — and the restrictions themselves are loosening; from the 2023-24 season, clubs judged to be in good financial health could be permitted to lose as much as €90million over a three-year monitoring period, triple the old limit of €30million.

Because a club’s accounts are published almost a year after the relevant deals take place, it is currently too early to know if Chelsea’s current spending will see them post a loss or profit. But in terms of hitting that number over three years of about €90million loss, it is worth bearing in mind that last year’s accounts saw Chelsea post a £121million loss (€140m). The season before that saw a £156m loss (€181m), which was the second biggest in Premier League history, so the club will need to start turning a profit soon, whether that be through increased player sales, improved commercial deals or a return to the Champions League (where you’d expect to make about £3-4m per home game).

Time will tell, but time is exactly what the amortisation of these transfer fees is buying the ownership.

Boehly and Clearlake identified on arrival that Chelsea were ripe for a massive rebuild, with a combination of expensive players almost fully amortised on the books and an academy that produces a steady conveyer belt of saleable young footballers, as well as a handful of elite prospects good enough to become first-team contributors.

But there is another key aspect to what Chelsea are trying to do…

The wage bill is coming down

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.

The massive squad turnover at Stamford Bridge over the past year has been as much about shedding contracts as players. Boehly and Clearlake have been determined to bring the club’s salary commitments down to a competitive market level, and they are well aware that the earning expectations of footballers tend to rise as they get older.

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, with Christopher Nkunku (whose transfer was agreed almost a year ago), Axel Disasi and goalkeeper Robert Sanchez the only exceptions.

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. Lavia will almost certainly be on a lower wage as he begins his career at Stamford Bridge than former Southampton team-mate James Ward-Prowse is on at West Ham.

Behdad Eghbali (left) and Boehly are leaving rivals confused and concerned (Photo: Nick Potts/PA Images via Getty Images)

Chelsea also remain committed to longer contracts even as amortisation benefits are reduced; Boehly and Clearlake believe they give players greater security and the club more protection on the value of their assets. It is hoped that lower salaries across the board will mean players who disappoint at Stamford Bridge will not be as difficult to offload as Romelu Lukaku and Hakim Ziyech, two of the last lavishly paid survivors of the Abramovich era.

There are still some high earners on Chelsea’s books, Raheem Sterling and Nkunku chief among them. But overall Boehly and Clearlake believe they have saved tens of millions of pounds in annual salary commitments for the first-team squad — money they are re-deploying to spend on transfer fees.

Chelsea’s strategy is not without risk

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.

Not all of the signings are expected to flourish, but the talent identification and development skills of the staff led by Stewart and Winstanley are being backed to ensure the successes outweigh the failures. If they do not, Chelsea will likely under-achieve on the pitch and these amortised fees will add up, limiting their options for correcting course.

One of the Premier League’s oldest squads has been transformed into the youngest by owners attempting to scale up something akin to the recruitment models of Monaco, RB Leipzig and Brighton to power an elite European club. Chelsea must now balance an economic requirement to develop the young talent they have assembled for themselves and for others, with the more immediate football demands of competing at the very top of the sport.

This particular tightrope has never been walked, or arguably even attempted, by a club of such size and recent winning pedigree. 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?

Boehly and Clearlake are betting the answers to these questions favour them, and that their approach to transfers and squad building puts Chelsea on a path to sustained sporting success as well as financial growth. Everyone else in football will be watching closely to see what happens next.

 

 

 

Had a squiz at that article and some of the comments are laughable.

[Manny]

30 minutes ago, Barrington Womble said:

 

 

This is the thing isn't it. And it's working now because they've sold 200m or whatever worth of talent with relatively low book values. As an example, mudryk is looking shite. He's on a 8 year deal. If they sell him this summer, they'll have knocked 20m off his book value max, so they'll still need 60m just to break even and that's assuming someone will take on the remaining 6 years of his 100k per week deal. 

 

Like I said before, it looks like it was written by Chelsea's PR team. 

Yeah this window is a bit of a standalone one for them as they've offloaded players like Havertz and Kovacic, who had very little book value as they'd been around for a few years and don't have long left on original contracts, and Mount who they got a whopping fee for who was pure profit as a youth teamer. But those kinds of 'assets' are pretty rare for them - OK they've got some youth players they can sell (they got decent money for Loftus-Cheek and will likely do reasonably well with Hudson-Odoi and Chalobah etc.) but without >150 Chelsea appearances they won't represent the same kind of return as Mount did. And they won't get many more Havertz's because it'll be six years before this summer's crop of players are in a similar place on the balance sheet - as you say, trying to offload one flop next year for some kind of return will be next to impossible (legally anyway).

 

I just don't see where the (legal) money comes from to make them sustainable - commercial revenue takes ages, CL revenue is insufficient and subject to competition, and player trading - which they've been pretty good at in fairness - is of limited return for them now, ironically because of the same accounting tricks they've pulled to sign them in the first place.

[Jose Jones]

Just further proves my theory that accountants and financial instruments are 90% of what’s wrong with the world.

Fire them all off into space.

[El Rojo]

2 minutes ago, aws said:

They’re mortgaging their future and gambling that things will work out for them . 

 

Given that they were just bailed out by the UK government - or taxpayers, to be more accurate -  when things last went to shit, why wouldn't they?

[TheHowieLama]

17 minutes ago, El Rojo said:

 

Given that they were just bailed out by the UK government - or taxpayers, to be more accurate -  when things last went to shit, why wouldn't they?

 

Is right - the only thing that could go wrong would be a substantial points deduction and that ain't happening.