How CAN Chelsea afford all these signings?
Fofana, Aubameyang and Gordon would take summer spree to record £340m, but club are confident they are not breaking FFP rules
AS CHELSEA’S summer spending continues, some of their rivals will be watching on with envy as they flex their financial muscles.
The imminent arrival of Wesley Fofana from Leicester for approximately £70million will take the total for this window to a staggering £250m — and counting.
With head coach Thomas Tuchel confirming ‘we could need some more players in some positions’ and Barcelona’s Pierre-Emerick Aubameyang and Everton’s Anthony Gordon among those they have targeted, the final total could end up passing £300m. It would also blow past Chelsea’s own Premier League record for a single window — the £230m they spent in summer 2020.
With that in mind, others are also keeping an eye on the situation in the context of Financial Fair Play rules.
Football finance specialists suspect Chelsea’s situation will naturally be among those being monitored by UEFA. Meanwhile, some figures who pre- date the Todd Boehly-led regime have expressed private concerns they will be heading towards danger at this rate of spending.
From Chelsea’s side, it almost goes without saying that the new regime contains an experienced business team led by Boehly, Behdad Eghbali and Jose Feliciano, who are in no doubt about the regulations and have been working accordingly.
There is a confidence they will be compliant and there has also been an understanding of the need for outgoings such as Romelu Lukaku, Timo Werner and Emerson Palmieri to help balance the books. The picture will not be clear until Chelsea’s spending is finished and their financial results including this window’s business are released.
Even then, there will be factors that could blur that picture.
Football finance expert Dr Rob Wilson of Sheffield Hallam University said: ‘ In layman’s terms, the £4.25billion sale price of Chelsea could have wiped out the debt and losses that had been accumulated at the club over the last 20- odd years so essentially, Chelsea then start at zero base under the terms of FFP.
‘Whereas a club like Arsenal, for example, who are consistently owned, cannot write off that debt repayment and those losses in the same way so it frees up cash.’
Though normality returned to football last season, and there is a feeling such allowances should no longer be given, clubs may still argue their results continue to be impacted by Covid losses.
Player amortisation — the spreading and recording payment of a player’s fee over the duration of their contract rather than as one immediate lump sum — will also impact their balance sheets.
FFP will soon change, too. This is the last year before clubs will be restricted to spending a certain percentage of their revenue on transfers, agents and wages.
In 2023, they will be allowed to spend 90 per cent. That figure will drop to 80 per cent and then 70 per cent in the next two years. That change will create a grey area for the authorities.
‘Clubs could argue that they were preparing themselves for the new regulations,’ Dr Wilson explained. ‘ What UEFA will probably do is assess them based on the old guidelines and then have a look at how they might fit into the new. This is basically the last roll of the dice, so this year you probably get away with it, and then you will have to recover those positions next year.’
Chelsea can also argue that some spending has been pushed into this accounting period as a result of the sanctions on former owner Roman Abramovich preventing them doing any business towards the end of the last one.
In their 2020-21 results, Chelsea estimated they would have turned over £500m for the first time were it not for the pandemic.
Their stadium size limits what income Chelsea can bring in. But since arriving, Boehly has sought to improve commercial and corporate departments, which could yield immediate FFP benefits.
‘I think we are going to see a more Americanised approach to Chelsea, which is focused on revenue generation and profit maximisation,’ Dr Wilson explained.
‘So, happy to spend because they know they might improve sporting performance but that spending is done to achieve higher commercial revenues, better sponsorship deals and, ultimately, moving to a new stadium so they can maximise those revenues.
‘That is what it will be about, maximising revenues to generate profits for return on investment.’