Opinion: Why Chelsea's Transfer Spending May Not Be As Bad As You Think

By: Anthony Tazbaz

Image Credit: Simon Reza

Once again, Chelsea is having themselves quite a summer with a busy front office.

As of the end of this past week, Chelsea signed not one, not two, but nineteen players since January. The signing spree started with a record number of signings following last year's World Cup, where they sat below the top 10 in the Premier League table at the time.

A Deeper Look

Although many focus on the recent record signing of Ecuadorian midfielder Moises Caicedo from Brighton, Chelsea's 2023 transfer windows entailed mostly signings of young players. Excluding their three signings from the academy, the average age of Chelsea's Summer 2023 arrivals is 21.5 years old, which is incredibly young for a big club looking to get back to winning ways.

This offseason performance is consistent with the January window, where they signed players with an average age of 20.3 years old. Out of all of those players, only João Félix is no longer under contract at the club this season, with his loan spell ending and consequently returning to Atlético Madrid.

Overall, Chelsea spent £857.3m since Todd Boehly presided over ownership last Summer, which is well beyond double the amount spent by Manchester United (£374.4m), who rank second amongst the biggest spenders within the past year.

Financial Fair Play

While Chelsea is getting ridiculed for spending such amounts, how are they staying within the Financial Fair Play rules?

There are three simple answers to this.

First, while Financial Fair Play regulations stipulate that clubs cannot exceed losses of £105m over a three-year period, Chelsea's expenditures are offset by major sales.

For instance, Chelsea managed to sell Kai Havertz and Mason Mount for a total of €139.2m , which equates to around half of their total income from player sales. Due to Mount graduating from Chelsea's academy and Havertz's arrival costing the club £28.4m, Chelsea raked in a profit of approximately £91.6m. The only downside from this, however, is that they departed for direct rivals Arsenal and Manchester United, respectively.

Second, Chelsea is successfully shedding lucrative salaries given to players mostly during the Roman Abramovich era. Last season, we witnessed Chelsea selling Timo Werner back to RB Leipzig in the Summer and Jorginho to Arsenal in January. The downside? Chelsea had to sell them far below market price due to their expensive wages.

Romelu Lukaku's loan to Inter Milan (and his imminent loan to AS Roma for this season), the sale of Michy Batshuayi and the free departures of Antonio Rüdiger, Andreas Christensen, and Marcos Alonso also allowed Chelsea to reduce their wage bill ahead of the 2022-23 season.

In addition to Havertz and Mount, the Blues will no longer need to pay the expensive contracts of N'Golo Kanté, Cesar Azpilicueta, Pierre-Emerick Aubameyang, Tiémoué Bakayoko, Kalidou Koulibaly, Mateo Kovacić, Edouard Mendy, Hakim Ziyech, and Kepa Arrizabalaga (the final two still having a portion paid by Chelsea due to departing only on loan) for this upcoming season. On the flip side, the either sold the players well below their values or in some cases, could not generate an income from a sale due to their expiring contracts.

Finally, Chelsea is saving money due to 'amortization'. This means that clubs can spread the cost of their fee across the amount of years to which the player in question is under contract. For instance, the purchase of Mykhaylo Mudryk last January for £89m will be spread over a period of eight-and-a-half years. This ultimately means that his transfer will technically cost the club only around £10m per year on their books.

For a big club, this is the sole benefit of not being in Europe. While UEFA tightened its rules on spreading the transfer fee across the duration of one's contract, the Premier League has not. This means that as long as they are out of Europe they can still do this. Juventus FC, for example, were fined and expelled from competing in this year's UEFA Europa Conference League this season due to breaching FFP rules between 2012 and 2019. Although Chelsea breached FFP rules during the Abramovich era, Chelsea were fined only £8.57m.

This is the ultimate reason why Chelsea offered newcomers Nicolas Jackson and Moises Caicedo eight-year contracts. Other arrivals such as Roméo Lavia, Christopher Nkunku, and Axel Disasi - all of whom also arrived on hefty fees and boast long-term contracts - are investments worth making.

Given their age and massive potential that is already starting to unravel, their longer-term contracts not only allow them to have fewer annual expenses on their books, but the club can also generate massive sales and strong profits, should they develop and decide to leave. By then, fees which normally amount to £60m could hover around £80m due to inflation and players being in form.

One More Thing

Although we rationalized Chelsea's spending practices the London club should still to be ridiculed for their desperateness to sell some of its players to direct rivals. Should Arsenal have won the title last season, Chelsea would have been further mocked for selling Jorginho to their archrivals, especially considering his cheap €10m price tag and having been in the discussion for the 2021 Ballon d'Or after leading Chelsea to their second UCL title and Italy to their second UEFA Euro title.

Hakim Ziyech's loan, which will eventually convert to a free sale, is also ridiculous, especially after his failed moves to PSG on the January deadline day and Al-Nassr this summer, which would have at least generated some income.

Although many of the club's sales are definitely questionable, Boehly's practices are clear: shed wages and sell players who no longer fit into the identity Chelsea aims to develop.

Bottom Line

Chelsea still have some catching up to do. It boasts an overall balance of -€162.2m for this summer. Such losses can be recuperated on competition prize money, future player sales or merchandising such as jersey sales. With that being said, without results, the club will further sink deep into a sea of trouble.

If the Blues can ultimately continue reducing the annual loss season by season, Chelsea should be fine. In 2021-22, they posted a loss of £121m, whereas they posted £156m during the previous season, where they won the Champions League. Overall, they are on a decent pace for a big spender.

However, with Chelsea having high aspirations in reaching Europe and pursuing a third UCL (or UEL) title with their young squad, more sustainable investing practices and player sales will be required to remain compliant with FFP regulations.

This demonstrates that Boehly has an ambitious plan. However, he has so far failed to move past the failings of the club's past. Under their fourth manager since Boehly took over, Chelsea's performances will also need to improve. Otherwise, its major signings will further sink the club. Instead of achieving financial and title goals, the entire plan will result in a classic own goal.