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How is Todd Boehly’s Chelsea spending so much money?

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I’m sure everyone’s equally as baffled by new owner Todd Boehly’s spending at Chelsea, now reaching £436 million since he took over from Roman Abramovic back in May. There’s also still Leipzig’s Christopher Nkunku’s £52.7 million fee confirmed for the summer, a reportedly rejected offer on the table of £55 million for Brighton’s Moises Caicedo and strong interest in Inter Milan’s Denzel Dumfries.

That’s 16 signings already which kicked off with Raheem Sterling’s £47.5 million from Man City to the most recent announcements of Mykhaylo Mudryk and Noni Madueke for well over £100 million combined. All three are wingers.

I’ve seen a lot of comments questioning why Financial Fair Play isn’t being triggered; and I can’t say I didn’t have the same intrigue; so, I’ve done some digging as to how on earth Boehly can spend so much.

long-term “baseball-style” contracts

In simple, it’s down to his long-term “American baseball-style” contracts and spreading transfer payments over the same period. The club writes off the cost of the transfer over the length of the players contract, and so the annual payments are reduced. I’m told it’s called amortisation. It appears to be a trend that other clubs are slow to catch on to, although the same principle has been used for contract extensions – Lionel Messi’s nine-year Barcelona contract in 2005 and Cesc Fabregas’ eight-year Arsenal contract the following year are early examples.

That’s why the likes of Benoit Badiashile’s deal from Monaco is penned to a seven-and-a-half-year contract, and Mudryk’s sees him through to 2031. That means for the Ukrainian, Chelsea are paying as little as £7 million a year to Shaktar Donetsk for the next 8 years.

Financial Fair Play

So why does that avoid Financial Fair Play? The FFP rules, simply put, don’t allow a team in UEFA competitions to spend £5 million more than they earned over a three-year period. The Premier League is more lenient; a team can make up to £105 million in losses over those three years. Given Chelsea’s income from winning the Champions League and the royalties of Premier League status, they certainly have cash to splash, and spreading their payments across the next decade help them avoid breaking financial regulations.

There are of course risks and rewards here. Long term contracts will prevent players leaving for free – think of Antonio Rudiger and Andreas Christensen to Real Madrid and Barcelona respectively. Any interest in these newly signed players will now need a hefty figure to buy them out of their contract.

However, players who lose their place in the side can be paid for eight-or-so years without making an impact or return on investment. Look at Arsenal with Pierre-Emerick Aubameyang. They looked to spare their wage book of the Gabonese striker’s £350,000 a week salary last January as he lost his place in the team for disciplinary reasons. That saved the club £27 million in just the second half of last season. Aubameyang now spends much of his time sitting on the Chelsea bench.

Another risk is if there isn’t success in Chelsea’s future. It’s like racking up a hefty monthly payment on Klarna trusting you’ll have enough future income coming in. What happens now if you lose your job, or you don’t get that Christmas bonus you were hoping for?

Is Todd Boehly’s Spending Good Value?

As a Chelsea fan though, it’s hard not to be optimistic about this massive overhaul and seeing Arsenal fans weep over stealing Mudryk gave me great satisfaction. If he lives up to his value he can honestly be world class, but the figure is crazy for a 22-year-old player who has played just 44 professional games for Shaktar Donetsk.

So that’s another area I’d like to delve into, do I think that Boehly’s transfers are good value?

Let’s start off where it began. Raheem Sterling. 4 goals and 2 assists in 15 Premier League outings. 2 goals and an assist in 6 Champions League runouts. Considering his £47.5 million transfer fee and Chelsea sitting in 10th, I can’t see that as amazing value.

Marc Cucurella for £57.5 million, Joao Felix for £9.7 million for a loan (and getting sent off on his debut), even Wesley Fofana – despite his potential – getting injured after his £70 million transfer all seem like tough sells to me.

But on the other hand, £52.7 million for arguably the Bundesliga’s best player outside of Munich in Christopher Nkunku could be cracking value. Lining up with him, Mudryk, Madueke. It could be a sight to behold, especially with so many injured players coming back into contention.

The Future of Chelsea

No football fan can seriously say they don’t think Chelsea will be fighting for trophies across Europe in no time with the strength in depth Todd Boehly is building.

Some of those least valuable transfers in Sterling and Fofana were Thomas Tuchel’s marquee signings, and now with full faith and a seemingly bottomless pocket for Graham Potter there seems to be a rebuilding process in place.

There is method to the madness. Invest heavily now on talented young players, save spending in the future with even higher inflated prices, build a highly successful and sustainable model in the long term.

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