By Manuel Sánchez Gómez
London, Feb 3 (EFE).- Chelsea FC forked out 356 million euros for eight players during the January transfer window, more than what was spent by Spain’s LaLiga, France’s Ligue 1, Germany’s Bundesliga and Italy’s Serie A combined.
Since American investor Todd Boehly took over as chairman six months ago, the London club has spent 680 million euros on transfers, more than any other in the world. It begs a simple question – how?
The arrival of Enzo Fernández from Benfica for a Premier League record fee of 120 million euros, Ukrainian star Mykhaylo Mudric for 100 million, Joao Félix on loan for 11 million as well as Noni Madueke and Benoit Badiashile for 34 and 40 million respectively, raised eyebrows over how Chelsea will square its operations with Financial Fair Play rules.
The first key to understanding Chelsea’s extravagant spending spree is the duration of the contracts offered by the club, Kieran Maguire, an specialist in the economics of football, tells Efe.
Enzo and Mudryk both put pen to paper for eight and a half years, allowing the club to divide their fee and salary by eight. With Enzo, then, Chelsea will not have to suffer a 120-million-euro blow to their books on top of his salary this year, but can spread it out over the next eight seasons.
It’s a risky bet. If something goes awry with the new signings in the future, the Chelsea could be counting some hefty losses. Then again, Chelsea has drafted these contracts with some very young players, as is the case with Malo Gusto, Andrey Santos and David Datro Fofana. This way, a future sale at a higher price could boost the club’s finances.
“This is the strategy used by Chelsea,” Maguire says.
THE WATCHFUL PREMIER LEAGUE
The potential dangers for Chelsea come from the Premier League and Uefa, both of which have implemented spending rules in a bid to level the playing field to an extent.
In the case of the Premier League, a club cannot take on losses of over 35 million pounds (roughly $42m) per season for a period of three years. For example, from 2020/21 to 2023/24, Chelsea can present losses of 120 million in total.
There is a caveat. The Covid-19 pandemic prompted a loosening of financial restrictions for Premier League clubs. In 2020/21, Chelsea reported losses of 170 million euros but avoided sanctions due to the situation.
To boost their accounts, Premier League clubs also have the option of presenting developments in their training centers, youth and women’s teams, as well as through community work.
FINANCIAL FAIR PLAY
In Europe, Chelsea has even less leeway, since Uefa allows a three-year loss of 30 million euros. Yet Chelsea still has a flex, since it can compensate its losses with its financial muscle if the European body deems the club to be financially stable.
Furthermore, Uefa’s sanctions are relatively light. The last club to be fined for financial breaches was Paris Saint-Germain, who were required to pay just 65 million euros in instalments.
Upcoming changes in the Financial Fair Play rules from the 2023/24 season means Chelsea will have to be cautious with its amortization approach. With the juicy contracts offered to their brand new signings, Chelsea risks having too hefty a payroll, when Uefa will only allow 90% of the income directed to footballers, agents and signings. This percentage will drop to 70% in 2025/2026.
CHAMPIONS LEAGUE, THE KEY
Chelsea’s best hopes this year is to qualify for the Champions League, given the Premier League is out of reach. It’s not an easy feat, though. The London club, sitting in 10th, needs to scrape back a 10 point divide to make 4th.
“If Chelsea fail to qualify for the Champions League for one season, it will make things more challenging for the club going forward,” Maguire says, adding that winning the Champions League two years ago brought in 120 million euros to the club, on top of the earnings drummed up through sponsorship.
“For every euro you generate in the Champions League, you generate around 22 cents in Europa League. One season (without Champions League) is challenging, but four seasons, as we’ve seen with Arsenal, then the amount of money that Chelsea spent in the transfer market in the last 12 months would make things quite difficult for them.”EFE