When you're building a soccer team, there are three main principles to keep in mind.
The first: How good are your players and how good are the players you're trying to sign? The second: What do these players do and how do they fit together? The third: Given all of that, how much are all of these players worth to your team?
Two years into the era of Todd Boehly and Clearlake Capital owning Chelsea, it has become quite clear that the people running the club only have a tenuous grasp of the first one, are pretty much completely ignoring the second one and have totally misunderstood the third one.
Although I've been quite critical of the new processes -- if you can even call them that -- at Chelsea, I've at least been holding a little space in my mind for the possibility that there is some sensical grand plan. It's not like the rest of European soccer is particularly well-run. Perhaps the never-ending churn of player transfers would eventually form into a superteam of young players with impossible depth that no one else in the world would be able to match. Maybe the financial rules of the sport would suddenly change or maybe the rules were both too byzantine and too subjective to say for sure that Chelsea could not, in fact, keep getting away with this.
But rather than cohering things into an identifiable plan, the club's decisions this summer have left me even more confused. With each successive maneuver, it looks more and more likely the people running Chelsea really don't know what they're doing.
Chelsea's better bet: Gallagher or Dewsbury-Hall?
While there is no evident plan, there do seem to be three distinct phases of Chelsea's recruitment approach.
In the first summer, they basically tried to sign any big-name player who was available or any player they saw linked with another big club. This led to nearly €100 million combined in transfer fees being spent on Raheem Sterling and Kalidou Koulibaly, who were a combined 58 years old in the summer of 2022.
To their credit, Boehly and Clearlake seemed to learn from that mistake by last summer. Instead, they shifted toward high-upside youngsters. See: Moisés Caicedo, Cole Palmer, Nicolas Jackson, and Romeo Lavia.
And now, this summer, they seem to be aiming at established players in their prime who theoretically don't have high ceilings but also have high floors. See: Pedro Neto, Kiernan Dewsbury-Hall, Tosin Adarabioyo, and João Félix.
If you squint hard enough, you can look at this summer's business and see it as an attempt to add some ready-made contributors to a pretty good team that was also the youngest in the league last year. But I really can't shake the feeling that this club is just acquiring players in order to have more players. To put it more coldly: Chelsea are just hoarding assets.
How else to explain the acquisition of Villarreal goalkeeper Filip Jørgensen? He's the third goalkeeper Chelsea have signed since last summer, in a position where ideally the same player plays every minute of all 38 games. At just 22 years old and for a fee of €24.5 million, Jørgensen's value could easily rise over the next couple years -- but he also has to play for that to happen. And his middling statistical track record thus far isn't much different from what we've seen from Chelsea's other goalkeepers, Robert Sánchez and Djordje Petrovic.
Or what about Neto? In a vacuum, he's a 24-year-old Portugal international at arguably the sport's most premium position: right wing. And you could convince yourself that he's the kind of player who would be undervalued: if we could find a way to keep him healthy and if playing for a near-relegation team such as Wolves suppressed his production, then this guy could be a steal. In reality, Chelsea acquired a player who has started 36 games and scored three goals over the past three seasons for a reported fee (€60 million, per Transfermarkt) eclipsed by only three transfers this summer.
With Dewsbury-Hall and Felix, we start to see another theme: that the new ownership at Chelsea doesn't seem to value the players who were already there. In his new book, "How to Win the Premier League," Liverpool's former head of research Ian Graham, talks about how club's tend to undervalue their own players and overvalue the players they could theoretically acquire because the clubs see their own players' faults every day at training.
How else to explain what happened this week and this past weekend? Kai Havertz, a former Chelsea player, scored the opening goal for Arsenal, who finished 26 points ahead of Chelsea last season. Then, on Sunday, former Chelsea midfielder Mateo Kovacic drove straight through Chelsea's €170 million midfield pairing of Caicedo and Lavia to score the match sealer in Manchester City's 2-0 win over Chelsea.
No lessons were learned, of course. After Sunday's loss, Chelsea confirmed the long-awaited transfer of Conor Gallagher to Atletico Madrid for €42 million.
The 24-year-old Gallagher was one of Chelsea's stars last season, playing more than 3,000 high-intensity minutes and a little bit of everything you could want from a midfielder. He fits the profile of the player the club has shifted toward acquiring this summer, and yet he had to leave either (1) because the team decided they preferred Dewsbury-Hall, a former player, for their new manager, or because (2) since Gallagher is a homegrown player, the transfer fee can be accounted for as a full profit, which Chelsea badly needs to balance out all of the other transfers and seven-year contracts they've handed out.
Ian Darke breaks down how he thinks Chelsea signing João Félix will fare in the coming seasons.
For Atletico to acquire Gallagher, too, they're sending Felix back to Chelsea so they can use the same kind of accounting tricks to book an immediate profit. Transfer fees paid are accounted for over the length of the contract, but transfer fees received are accounted for in one lump sum. So, if two teams send players in opposite directions for the same exact amount of money, both teams will record a profit on their books for this year. Money!
A year ago, you could've made a joke about how Chelsea were so desperate to sign new players that they'd make offers to sign players whom they'd let go of that same summer. Now, the joke has almost become reality. After flopping on loan at Chelsea in winter 2023, Felix signed a six-year contract with Chelsea earlier this week.
Chelsea as proof that "soccer isn't played on a spreadsheet"
Amid all of the chaos, there is this: Chelsea have a lot of good players. According to the estimated market values from Transfermarkt, Chelsea's squad is worth €1.1 billion -- the fourth most in the world, after Real Madrid, Manchester City, and Arsenal.
Of course, part of the reason that number is so high is because Chelsea have a lot of players, full stop. Of the 10 most valuable clubs not named Chelsea, their current average squad size is 28 players. Chelsea, per Transfermarkt, currently have a 42-man squad. If we look at the market value for just the 18 most valuable players, Chelsea drop down to eighth.
Even still, that would be the fourth-highest total in the Premier League, after the presumed top three in Man City, Arsenal and Liverpool. If we use transfer value as an imperfect proxy for talent, then Chelsea should be the favorites to grab the fourth Champions League place in England. Again, this is all in a vacuum.
In reality, Chelsea's squad hasn't been constructed with any clear playing style or approach in mind. And I can't discern any thought being given to how these players might actually fit together on the field. It might be a midfield they use only against big teams, but the trio of Enzo Fernández, Caicedo and Lavia that manager Enzo Maresca started Sunday included three holding midfielders.
Perhaps the biggest value provided by a holding midfielder is what it means for the rest of the team: it lets your fullbacks be more aggressive and allows for more attack-oriented players to fit into the midfield. In other words: A great holding midfielder makes it so you have to play only one holding midfielder! Instead, Chelsea have poured a ton of resources into three players who play the same, or a similar, position.
Enzo Maresca addresses Raheem Sterling and Ben Chilwell's situations at Chelsea as they could be set to leave the club.
Similar issues arise with the way the attack functions. Cole Palmer is Chelsea's best player, and his main skill is his ability to see and complete high-value dangerous passes. He's not a great athlete -- he's not necessarily someone you want running in space, but rather someone who plays the pass to allow a teammate to run into space. But none of the other attackers on Chelsea's squad specializes in running into space. Well, one of them does: Raheem Sterling, but he didn't even make the matchday squad against Man City.
On top of all this: Not all of these players can play. And the main way young players get better is by playing more soccer. On Sunday, Mykhailo Mudryk, Benoît Badiashile, Noni Madueke and Jorgensen didn't leave the bench. Petrovic didn't even make the bench. These players are all 24 and under, were all acquired for sizable transfer fees and are under contract until at least 2030.
The problem with Chelsea's seven-year player contracts
If you wanted to defend Chelsea, at this point in the piece you might say: "But Cole Palmer and Enzo Fernandez and Moises Caicedo and Nico Jackson and Christopher Nkunku are all signed through 2030, too. These are good players, and Chelsea has them locked up long term."
As I wrote about last year, Chelsea have way more players on six- and seven-year deals than the rest of Europe combined. The first "benefit" to these deals was supposed to be accounting one. Sign a player for €70 million but get him on a seven-year deal, and that fee only gets accounted for at a rate of €10 million per year. This is the main way Chelsea have managed to sign so many players for so much money.
However, there was supposed to be a second benefit, too: Sure, they might swing and miss on a couple guys, but when you sign, say, Cole Palmer to a seven-year contract and he becomes a star, you've locked him up, long term, on a deal that pays him well below his market value.
Again, this might have worked -- in theory. The logic is sound on the surface. But once you tug at it just a tiny bit, the best case here was that Chelsea would build a team of young superstars and then just assume they'd all be happy together for a half-decade, making way less money than they could at Manchester City or Real Madrid? Really?
Sure enough, just a year after his breakout season, Palmer signed a newer, much more lucrative contract this summer. So much for that.
Meanwhile, all of the players on six- and seven-year deals who don't hit? You might be stuck with them. Even on the extended deals, Chelsea are still paying competitive annual wages to most clubs in Europe.
The bet here, it seems, is that some of the players who don't work out can be loaned to Strasbourg, the other club owned by Chelsea's ownership group. While others will still retain transfer value because they're young, and I guess, they'll get frustrated by the lack of playing time and eventually agree to terminate the long-term security of their massive deals in order to go get playing time somewhere else? Whatever the answer, no one who has signed one of these long-term deals has left the club.
On top of the logical issues with these strategies, there's the bigger issue: money. While these long-term contracts and player swaps allow Chelsea to clean up their books in the short term, they still have to account for the entirety of the transfer fees at some point.
Rather than booking it all up front, they're stacking a ton of amortized fees on top of one another, year after year, all the way through to 2031. While Chelsea continue to scrape by via the accounting tricks of the transfer market, they continue to spend way more on transfers than they bring back in transfer fees. And their annual revenue has declined significantly after consecutive seasons of missing out on the Champions League.
Per analysis by Kieron O'Connor at his newsletter, The Swiss Ramble:
"My estimate is that Chelsea's pre-tax loss will widen from £90m in 2022/23 to £111m in 2023/24, mainly due to revenue falling by £52m from £512m to £460m after the failure to qualify for Europe.
Champions League participation was worth £83m TV money in 2022/23, but broadcasting was boosted by a higher Premier League TV distribution, after the Blues improved their league position from 12th to 6th."
It's unclear how Chelsea will comply with UEFA's financial regulations -- essentially no losses bigger than €90 million over a three-year period -- now that they're back in the Conference League. And it's unclear what, if they don't comply, the punishment will be. If it's just a fine, then Boehly & Co. likely won't be deterred. It's just the cost of building whatever it is they think they're building.
The same applies to the Premier League's Profit and Sustainability regulations -- roughly no more than a £105 million loss over a three-year period. Chelsea have already sold a hotel to themselves in order to claw back some "revenue" -- maybe they can sell themselves the locker room, the corner flags, the scoreboar, and the white endline paint at Stamford Bridge, too. If not, then we've seen the league take a pretty strict stance; a point deduction could be on the way.
Whether Chelsea can wriggle their way out of the harsher regulatory environment taking over European soccer post-COVID-19 remains to be seen. But two-plus years into the club's new ownership era, one thing is becoming clearer with each day: they still have no clue how to build a successful soccer team.