The dust has settled, and the numbers are in. Since June 10, when the summer transfer window opened, Chelsea has spent more than €600 million on new signings ($650m): 14 permanent signings and two on loan. In that time frame, covering the past two transfer windows, they released players to other clubs for a total of just over €65m ($70m), putting their net spend for 2022-23 at a number approaching $600m. During that time, they also changed owners, manager, chairman, scouting director and recruitment staff.
There may be other examples, but what springs to my mind was what happened at Real Madrid in the summer of 2009. There was a new president -- Florentino Perez, back for his second stint -- a new coach (Manuel Pellegrini) and eight new signings that revolutionised the club, among them Kaka, Karim Benzema, Xabi Alonso, Raul Albiol and somebody named Cristiano Ronaldo. The total spend was €258.5m -- around $370m at the time -- and the net spend came to €170m ($243m).
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Chelsea's spend dwarfs those numbers, but you have to remember that this was nearly 14 years ago, when the revenue of most top clubs was less than half what it is now. If you look at it as a percentage of revenue, you're in a similar ballpark.
Remember the old tech motto attributed to Mark Zuckerberg: "Move fast and break things"? Todd Boehly and Behdad Eghbali, who lead the club's ownership group, are doing just that in West London. Eghbali said in December that the Chelsea he took over from Roman Abramovich was "not terribly well-managed on the football side, sporting side or promotional side" and that European sports were some 20 years behind the U.S. in terms of "sophistication" on the commercial side, as well as the data side. Hence, the opportunity to disrupt and to grow for his clients.
(Lest we forget, while Eghbali and Boehly are very wealthy, they don't own the club themselves. Not only are there other investors, they themselves have clients who have chosen to invest with them and to whom they have to answer.)
There are two vantage points from which to consider Chelsea's transfer spending: on the pitch and financially. They're obviously related because resources, for even the wealthiest clubs, are finite and if you spend on one thing, you can't spend on another that may have been a better option. Plus UEFA's new financial sustainability rules -- which replace financial fair play from next season -- mean that you have to somehow move towards balanced books fairly quickly. But it also makes sense to view them separately as an indicator of where the club are.
Chelsea's summer transfer window was marked by a mix of highly priced (whether in terms of transfer fee or wages) established players -- Raheem Sterling, Kalidou Koulibaly, Pierre-Emerick Aubameyang -- and youngsters with an upside like Wesley Fofana, Carney Chukwuemeka and Gabriel Slonina. That part shouldn't be surprising: the recruitment department inherited from Roman Abramovich was let go, Boehly was forced to act as a de facto sporting director and the manager, Thomas Tuchel, played a huge role in calling the shots.
Managers tend to think short-term because their job depends on it, and that's how you ended up with the trio of supposed "instant impact" players mentioned above. As it turned out, it didn't help Tuchel much, as he was fired just a few days after the window closed, which frankly made little sense.
This window is entirely different. Each of the eight new arrivals is 22 or younger (other than on loan Joao Felix, who is 23). Five of them have less than 50 top-flight starts to their name. These are guys who you bring in more for what you think they can become rather than what they are now, simply because their body of work thus far is limited.
Chelsea are currently 10th in the table, a function partly of injuries, partly of the difficult transition from Tuchel to his successor, Graham Potter. Of the January intake, you can expect Benoit Badiashile to be part of the center-back corps and you imagine Enzo Fernandez will go straight into midfield. Mikhaylo Mudryk is also penciled in as a starter while Joao Felix, you presume, will compete with Raheem Sterling and Christian Pulisic for playing time once they return.
Do they move the needle enough -- and bear in mind these are youngsters adjusting to a new league -- to help Chelsea make up 10 points and seven places over 18 games to get into the Champions League? Probably not.
Does the team now feel complete and ready for a title run next season? From where I sit, unless some of the other youngsters suddenly turn into world-beaters, most likely you'll still need a defensive midfielder -- N'Golo Kante has been injured most of the season and is out of contract in the summer -- and a center-forward, unless they decide to deploy Christopher Nkunku, who is joining in June, in that latter role and he proves to be productive. Clearly then, on the pitch at least, this is still part of a process.
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Then there's the money aspect and bear in mind, it's twofold.
It's not just the financial sustainability regulations; there's also the fact that, Chelsea's owners want to see a return, whether in terms of profitability or in seeing the value of their asset rise. They spent £2.5 billion ($3.1bn) to buy the club while promising to invest another £1.75bn ($2.1bn) over the next decade.
Never mind that last part -- nobody's going to check to see if they actually spend that £1.75bn, and if they don't, it's not as if they're going to give the club back to Abramovich -- focus instead on the £2.5bn.
Chelsea have made operating losses in each of the past 10 years and even with player trading -- where they did very well -- they still lost money in five of the last 10 years. The new owners will probably redevelop the stadium, which will bring more revenue (though not for a while) and maybe Eghbali is correct -- maybe he'll find "sophisticated" new ways to "monetize" his asset (ones the many American owners haven't yet thought of), but it's still a huge ask.
As for the value of the asset appreciating over time and selling for many times what they paid for it (and what they spent to cover losses)... sure, maybe. But remember too that the asking price for Liverpool -- who don't need to build a new stadium, have a bigger global fan base and a more historic brand -- is $3bn and nobody is biting ... for now at least. The risk -- especially with so many different ownership stakes, many of them answering in turn to many different investors -- is that folks may pull their money out if targets aren't being hit.
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The other obvious money aspect is financial sustainability regulation. Kieran O'Connor, who writes the football finance newsletter Swiss Ramble, did a deep dive on this issue. He concluded that Chelsea would likely meet the Premier League requirements, but would likely struggle with two of UEFA's regulations: the "squad cost ratio" (spending on wages, amortisation and agent fees can't be more than 90% of revenue plus profit on player sales, going down to 80% and 70% in subsequent years), and the new FFP break-even regulations that are more generous than the current ones.
Of course, he wrote his piece before Chelsea went and spent an additional €180m-plus ($196m) on Noni Madueke, Malo Gusto and Fernandez. Based on reported transfer fees and estimated salaries, this would add another €35-40m to their annual squad cost, putting them well over the limit, which means they'd need to recoup money through players sales and expiring contracts this summer.
And this is where things get tricky, because it's where you need to find savings, either by selling players or loaning them out.
Chelsea already have eight senior players out on loan -- including some blasts from the past like Baba Rahman and Tiemoue Bakayoko -- who are contracted beyond next season. In most of the cases, they are subsidizing part of their salaries and, of course, they are taking a hit on their amortization, which ranges from very little for a player like Ethan Ampadu to more than €20m a year in Romelu Lukaku's case.
Moving them on would allow Chelsea to save on their wages and make some money back in transfer fees, but it's very difficult to do, because they're on the sort of wages that Chelsea pay but few clubs can afford.
Take Lukaku. He turns 30 in May, he's been hampered by injuries -- he made just four league starts on loan at Inter this season -- and he's scheduled to make nearly €50m in wages between now and 2026. For Chelsea to make a profit off his sale, they would need to shift him for more than €60m. Frankly, it's not looking likely.
Player trading to improve the books is easiest to do with guys who are on moderate wages or who have a low residual amortization either because they're Academy products, or because they've been there long enough that you've amortised most of the cost. (Jorginho, who moved to Arsenal for £10m, plus £2m in bonuses, was a master stroke: As a high earner with six months left on his contract, Chelsea actually made money on him and saved on his wages for half a year.)
The good news is that Chelsea have a ton of young homegrown talent on modest salaries who, if they moved on to new clubs, would represent pure profit because they cost "nothing" and were developed in-house. It's not just first-team figures like Reece James, Mason Mount, Ruben Loftus-Cheek, Conor Gallagher or Trevoh Chalobah -- some of whom you wouldn't want to move because they can be key contributors -- but it's the next level down, too, like youth internationals like Dujon Sterling, Lewis Hall, Armando Broja, Levi Colwill, Tino Anjorin and Xavier Simons.
On the flip side, it's a bit trickier with the youngsters who were brought in since last summer: Madueke, Gusto, Cesare Casadei, Carney Chukwuemeka and David Datro Fofana. They cost money and while they're not huge earners, they're going to be on substantially more wages than their homegrown peers, plus their amortized transfer fee stays on the books. Some may make it and become first-team regulars, some may flame out, and some may be just good enough to fetch a fee, but because you paid a substantial amount to sign them, you'll need to get a certain amount back.
Take Gusto, who was signed for a €30m transfer and has a contract through 2029. Given the presence of James down the right flank, he may well be loaned out again next season or be a reserve for a couple of seasons. If, in 2½ years, he hasn't shown enough progress or he gets hurt, or if the manager simply doesn't like him and Chelsea attempt to move him out, they'd need to get at least €14m for him or they've lost money.
Probable? Possible? Who knows?
I'd hazard a guess that there are not more than 30 clubs in the world that could afford to spend that much on a right back on Chelsea-type wages. And sure, if transfer fees and revenues continue to increase, then it won't matter as much.
It's a bit like a mortgage. If you were 30 in 2010, then paying $1,000 bucks a month on your mortgage might have felt like a lot, whereas today that same payment may not feel like such a struggle since you probably earn more money, and inflation means a thousand bucks doesn't buy what it used to.
And no, there's no real loophole or work around here. You can diminish Gusto's amortization by extending his contract, but that simply pushes the costs down the road and you're on the hook for more years. (Baba Rahman, who joined Chelsea for a fee of around €18m in 2015, but hasn't actually played for them since May 2016, is the perfect case study.) And before you bring up multi-club ownership -- something Boehly and Eghbali have referenced numerous times -- it may be of use in terms of developing your youngsters, but you won't be able to use them to "cook the books." UEFA's regulations are pretty clear that they will assess transactions between related parties at "fair market value."
It feels like Chelsea are rolling the dice and gambling. They're gambling on being able to meet financial sustainability requirements, and maybe that UEFA won't be as strict or zealous in enforcing them as some would like. Gambling on being able to grow revenue (most likely without Champions League income next year). Gambling that their recruitment gurus -- who thus far did very well elsewhere, albeit shopping in a different category of store -- will get more right than they get wrong. Gambling that their investors will stay the course for the long haul.
That's not a bad thing, per se. Folks who succeed in business -- and yes, this is a business to them -- often do so by being bold and daring and taking risks. Heck, that's what Real Madrid did with their spending spree back in 2009.
How did it work out for them? They changed managers after a year, bringing in Jose Mourinho. Cristiano Ronaldo rewrote the record books, Karim Benzema was a valiant sidekick who turned into the main man and won a Ballon d'Or of his own last year. Xabi Alonso was exceptional and Alvaro Arbeloa gave them seven years of reliable service, four of them as a starter. On the other hand, Kaka was hampered by injuries and never lived up to his fee, while Raul Albiol had a year as a regular, was also slowed by injuries and left to join Napoli.
Real Madrid's spending, understandably, diminished substantially in subsequent seasons. What did they win in the next four years? One LaLiga title and one Spanish Cup, though to be fair, this was at the time that Pep Guardiola's Barcelona were dominant, so it was a high bar to clear. But there's a lesson in that too: for all your plans and careful consideration, this is sport and, even though you might do everything right, you can't control what your competition does.
And that's another layer of risk to the Great Chelsea Spree of 2022-23. We all have different appetites for risk and, as the saying goes: No risk, no reward. Just be aware of what's at stake when you do roll the dice.