$370 Million in One Month: What Chelsea’s Record-Breaking Transfer Window Means for the Future of the Sport
Some people think that football is a matter of life and death. I don’t like that attitude. I can assure them it is much more serious than that.” - Bill Shankly
In the Premier League’s January transfer window, football club Chelsea spent close to $370 million in their hunt for talent under new owner Todd Boehly. It is the most that any football club has ever spent in a single transfer window–also more than every team in the top division of France, Spain, Germany, and Italy combined (Panja and Smith 2023). A large chunk of this spending spree went towards a $131 million deal to sign Enzo Fernández, the 21-year-old Argentine sensation, making him the most expensive player ever signed by an English football club.
Only a year ago, Enzo Fernàndez was playing for River Plate, a club sitting 3rd place in Argentina’s Primera Division. Now he’s pulling in $125k per week, sporting the iconic blue kit of Chelsea Football Club. How is this possible? Is Enzo Fernandez’s hefty price tag a sign of greatness to come, or merely another example of corporate greed infiltrating the world’s most beautiful game?
Here are the facts.
Over the last 10 years, the English Premier League has essentially accepted that on-field dominance can now only be achieved by the wealthiest clubs. This is largely due to massive injections of foreign investment, a source of funding that the league can no longer ignore. One of the most recent and pertinent examples is the meteoric rise of Newcastle United after being taken over by Saudi Arabia’s Public Investment Fund for around $305 million in 2021 (Panja and Smith 2021). Almost immediately, Newcastle hired former AFC Bournemouth manager Eddie Howe, who took over a team that was in disarray and threatened with relegation. The club went on to smash their previous transfer record with the $60 million purchase of forward Alexander Isak and triggered the $25 million release clause of Chris Wood at Burnley, essentially operating without a ceiling (Caulkin 2022). Once a place where despair and anger hung in the air, Newcastle’s stadium St. James Park is now bursting at the seams with excited fans who are beside themselves, watching their beloved team now compete in cup championships and for Champions League football, having climbed to 6th place in the table. In the blink of an eye, Newcastle’s rise to a top contender in the league is a prime example of how injections of cash impact the game.
As a result of this investment, the disparity between the Premier League and the other major leagues has grown exponentially further apart. This may soon prove detrimental to the sport as a whole if this rate of spending does not go unchecked. As Premier League clubs continue to raise the bar for what a player’s value should be, the greater the inflationary risk is for clubs across the world, regardless of their size or status. Less wealthy clubs are now faced with a dilemma–accept that the highest level of talent is no longer available to them, or jeopardize their entire future for a slim chance to compete (Smith 2023). FC Barcelona and Juventus F.C., two of the most renowned footballing giants in the world, chose the latter route. It led to financial ruin and public disgrace.
Today, Premier League clubs identify the players they want, the players that everyone wants, and without hesitation throw exorbitant sums of money their way until they strike a deal. Take Chelsea as an example. In June of 2022, American business tycoon and billionaire Todd Boehly purchased Chelsea football club from longtime owner and Russian oligarch Roman Abramovich for $3 billion. In less than nine months, he has spent roughly $500 million on players, a feat once thought impossible by the footballing world. Outrage has spread far and wide amongst league executives. Javier Tebas, the president of LaLiga, Spain’s top division, has even gone as far as to accuse Chelsea of cheating (Smith 2023).
How did Chelsea spend that much money?
Technically, Chelsea hasn’t broken any rules. Instead they have exploited a loophole that allows them to circumvent the UEFA and Premier League Financial Fair Play (FFP) rules. The premise of the FFP regulations are to ensure that clubs do not spend more than they earn, and in doing so, prevent them from falling into financial turbulence that could threaten their existence. Simply put, clubs are required to break even. In the wake of the Covid-19 pandemic, UEFA altered their rules to allow clubs to incur losses of around $64 million over three years (compared to the previous $30 million) and capped spending at 70% of a club's total revenue by 2025/2026 (Cormack, 2023).
Chelsea have employed a technique known as amortization–where the value of the contract is distributed over a longer period of time than usual–in order to bypass these regulations, bringing down their yearly spending (Panja and Smith, 2023). Therefore, a club agreeing to a 5-year contract for $100 million would see them allotting $20 million per year, for the duration of said contract. Enzo Ferndández has a contract worth north of $100 million, but he and Chelsea agreed to a lengthy 8 ½ year contract. Thus, Chelsea only has to pay $12.5 million per year. Boehly’s spending at Chelsea has been prolific, unsurprisingly garnering the attention of FIFA and UEFA’s regulatory boards. There are already numerous reports that FIFA and UEFA are planning to implement stricter regulations to block clubs from abusing the market by limiting a contract duration to five years and imposing harsher penalties in the near future (Moore 2023).
What about Manchester City?
Chelsea is not the only offender in English football. Manchester City was purchased by Sheikh Mansour for $212 million in 2008, instantly propelling City into relevancy and earning them the title of the “richest club in the world” (Pollard 2016). Since 2008, financial records show that Mansour has invested a staggering $1.8 billion into the club, taking Manchester City from a mid-table team to an omnipotent footballing giant, and one of the greatest teams the game has ever seen (Thomas-Humphreys 2023).
Manchester City’s rise to the throne is being challenged by recent allegations made by the Premier League, accusing the club of around 100 serious violations over a nine-year span, from 2009 to 2018 (Panja and Das 2023). The Premier League has asserted that Manchester City has repeatedly failed to provide accurate financial information over the last decade. More specifically, City has been accused of being deceitful about their reporting of player and manager contracts to avoid breaching FFP rules (Panja and Das 2023). By manipulating their earnings, Manchester City may have been able to hide how much they are earning/spending, effectively rendering FFP laws obsolete. The accusations also allege that the club has not fully cooperated with the Premier League’s investigation. In 2020, the club received a ban by UEFA from European competition for two seasons and was fined $30 million for similar violations. Manchester City subsequently took the case to the Court of Arbitration for Sport (CAS), and the ban was overturned when the panel found that most of the breaches happened too long ago for UEFA to confront (Solhekol 2023).
However, a critical difference between UEFA and Premier League rules is that the Premier League does not have a statute of limitations. Therefore, if found guilty, Manchester City would not be able to take the Premier League to court, as they did with UEFA, on grounds that their violations were outside the statute of limitations. Thus, the consequences could be drastic. The Premier League has already laid out sanctions that range from fines to point deductions, and even potential expulsion from the Premier League itself. Manchester City “robustly” denies any wrongdoing and is confident that it will be able to clear its name in court (Panja and Das 2023).
What is the impact of all this money in the game?
It is first important to make a distinction between Chelsea’s (and other club's) legitimate exploitation of a loophole and the allegations of Manchester City’s illegal activity.
If the violations against Manchester City are found to be true, that means that the club was not operating under the same rules as everybody else in their dominant run which resulted in numerous trophies (Smith 2023). There is no way to restore what has been lost by every other club defeated by Manchester City–no way to make it up to the thousands of fans who watched their teams suffer a defeat at the hands of cheaters. The injustice falls heavily on the smaller clubs, from Stoke City to Sunderland to Watford, already fighting an uphill battle and oblivious to the fact that they may have been unfairly outmatched and out-funded this whole time.
However, it is difficult to pinpoint the true victim of this overspending frenzy on promising new talent. If you accept the concept that sports should be governed by the free market, then you have to accept that these players will get paid increasingly higher salaries, and that teams will be owned only by the richest in the world.
Yet it is fair to argue that the quality of the sport globally suffers under the weight of the deep pockets of many Premier League clubs. The future of football is bright, but talent seems to be increasingly concentrated in the Premier League. The disparity between the Premier League and other major leagues is now so vast that executives have been forced to admit their leagues are becoming “feeder” competitions (Smith 2023). A football season has historically been defined as a test to each club’s institutional strength–composed of a cohesive ideology that encompasses the vision of the manager, the commitment of the players, the marketing team, recruiting systems, and of course, the fans. The sheer saturation of wealth in the Premier League distorts this institutional strength as money has now become the prevailing determinant for success. There is no sport in an arbitrary distribution of wealth.
There may be some benefits however…
It is important to note that while being a fan of a less wealthy club can be a demoralizing existence at times, the influx of wealth can also be very beneficial for small market clubs. For example, Portuguese club Benfica now gets to reap their $100 million reward for the sale of Enzo Fernandez, a player who they helped develop. Furthermore, smaller national team programs are also flourishing as their star players are getting more opportunities to grow while playing amongst the world’s best at the highest level. More and more clubs are going to once over-looked nations as a source for young talent. A prime example is Morocco's dream run in the FIFA World Cup, led by rising star Hakim Ziyech.
Finally, it is crucial to evaluate the addition of these multi-million dollar footballers to the Chelsea squad. Chelsea has two draws and two losses to show for since the January transfer window closed. Their most recent loss was to Southampton, who currently sit dead last in the English Premier League table. Pundits and fans have been understandably critical, asserting that Todd Boehly has somehow managed to assemble the most expensive non-scoring team in the history of football, perhaps proving that it takes more than a check to run a successful football club.
It is also notable that England’s financial superiority has not led to Champions League dominance as has been feared. There has been one English side in every final since 2018, but a wholesale takeover of the tournament has yet to materialize. The format of a knockout competition may work to explain this, as the financial advantage in a game restrained to 90 min (or 180 min for 2 games) disappears and what is left is the difference in the technical and psychological capacity of two sets of Europe’s best players (Smith 2023).
Ultimately, football is a sport driven by a desire not just for success now, but for success in perpetuity (Smith 2021).
Fans demand and expect the absolute best, leading many clubs down a desperate, often reckless path to obtain success. Football is more popular than it has ever been–more fans, more talent, more money exchanging hands–but it could soon be a victim of its own success. If football is a religion, as it is often described, then money is God. Thus, money may be God, but it is not and should not be everything.
It is up to football’s governing bodies, UEFA and FIFA, to create and enforce fair and reliable regulations. Perhaps the Premier League should take a lesson from the Bundesliga, who have a 50+1 rule that states that in order to obtain a license to compete in the Bundesliga, a club must at the minimum majority own its association (51%) football team. This rule works to make sure that the club’s members retain majority control and works as a mechanism to protect against the influence of external investors.
Ultimately, it is important that everyone from fans to club management work together to prevent the sport from becoming a rich man’s game and allow it to remain the world’s most beautiful game. A game the whole world may enjoy.
References
Caulkin, George. “Newcastle Are Rich but This Season's Success Is down to More than Just Money.” The Athletic. The Athletic, October 27, 2022. https://theathletic.com/3731981/2022/10/27/newcastle-money-klopp/?redirected=1.
Cormack, James. “Financial Fair Play Rules: Explained.” 90min.com. 90min.com, February 6, 2023. https://www.90min.com/posts/financial-fair-play-rules-explained.
“Man City Premier League Charges Explained: What Are They? What Could Punishment Be? What's the Timescale?” Sky Sports. Accessed March 9, 2023. https://www.skysports.com/football/news/11661/12804623/man-city-premier-league-charges-explained-what-are-they-what-could-punishment-be-whats-the-timescale.
Moore, Chris. “UEFA to Close FFP Loophole Due to Chelsea Long-Term Deals.” World Soccer Talk. World Soccer Talk, January 24, 2023. https://worldsoccertalk.com/news/uefa-to-close-ffp-loophole-due-to-chelsea-long-term-deals-20230124-WST-416652.html.
Panja, Tariq, and Rory Smith. “Saudi-Led Group Completes Purchase of Newcastle United.” The New York Times. The New York Times, October 7, 2021. https://www.nytimes.com/2021/10/07/sports/soccer/newcastle-saudi-premier-league.html.
Panja, Tariq, and Rory Smith. “Is Chelsea Setting the Market, or Breaking It?” The New York Times. The New York Times, February 2, 2023. https://www.nytimes.com/2023/02/02/sports/soccer/chelsea-transfers.html.
Pollard, Rob. “The Remarkable Story of Manchester City's Rise under Sheikh Mansour.” Bleacher Report. Bleacher Report, October 3, 2017. https://bleacherreport.com/articles/2670212-the-remarkable-story-of-manchester-citys-rise-under-sheikh-mansour.
Thomas-Humphreys, Harry. “Manchester City Owners - Net Worth and How Much They Have Spent.” Metro. Metro.co.uk, February 6, 2023. https://metro.co.uk/2023/02/06/who-owns-manchester-city-and-how-much-have-they-spent-on-signings-18232877/.
Smith, Rory. “It's Not Just What Manchester City Won. It's What Others Lost.” The New York Times. The New York Times, February 7, 2023. https://www.nytimes.com/2023/02/07/sports/soccer/manchester-city-premier-league-rules.html?action=click&module=RelatedLinks&pgtype=Article.
Smith, Rory. “The Danger Lurking behind the Premier League's Wealth.” The New York Times. The New York Times, February 3, 2023. https://www.nytimes.com/2023/02/03/sports/soccer/chelsea-transfer-window.html?searchResultPosition=1.
Smith, Rory. “The Super League Is Gone. What Now?” The New York Times. The New York Times, April 23, 2021. https://www.nytimes.com/2021/04/23/sports/soccer/super-league-europe-soccer.html.