Inside the new Chelsea model: How the 'billion-pound bottle jobs' silenced their critics
There is a view within Chelsea that when the club moved to sign Cole Palmer at the end of last year’s summer transfer window the man who would become the new star of English football had just two alternatives: a move to West Ham United or a loan to newly-promoted Burnley.
West Ham first had to sell Lucas Paquetá to Palmer’s then club Manchester City, a transfer that may have happened but for the discovery of the Football Association charges against Paquetá, which he is fighting. History can pivot on such details. Chelsea’s first choice, Michael Olise, according to sources close to that prospective deal before Palmer arrived, was not prepared to accept the newly structured contracts being offered to young talent at Chelsea.
That snapshot of arguably the most successful chapter in a very long tale of trading and reinvention at Chelsea raises the question that most ask about the club in its current late 2024 state: is this working? And if so, how is this working? More than £1 billion spent on players under the new ownership which, bruised by Gary Neville’s “billion-pound bottle-jobs” comment during the League Cup final defeat last February, also point out that around £450 million has been recouped in sales. Come Sunday, Chelsea could go top of the Premier League, even if for only a couple of hours.
This time last year they were on the kind of bad run that sealed the fate of Mauricio Pochettino, whose end of season sacking demonstrated the fundamental disagreements at the heart of the new Chelsea. It is understood that Behdad Eghbali, whose Clearlake Capital fund holds the majority stake in the ownership consortium, advocated sacking the Argentine. He did so on the recommendation of his co-sporting directors Paul Winstanley and Laurence Stewart, and also one suspects, the Californian private equity billionaire’s own dissatisfaction. The club chairman Todd Boehly, the other principal owner, is understood to have wanted to keep Pochettino. Both sides declined to comment on this issue.
Now under Enzo Maresca, the team’s performances are transformed. One might expect that since May 2022 there have been vast investment in players, three sacked managers – as well as Frank Lampard’s doomed spell as interim – and a remarkable turnover of staff. Throughout the club, those from the Roman Abramovich regime have been all but expunged and some of the first round of appointments from the early days of the Eghbali-Boehly regime have already gone. That includes a chief executive and a technical director.
Chelsea model creating intrigue among rivals
How much has it cost? Is it sustainable? Chelsea will publish their financial results for the year ending June 2023 in March, the equivalent of which last year saw operating losses of £90.1 million. Those followed losses of £121.4 million the previous year. Yet this season, the club have complied with Premier League financial controls again.
Those profit and sustainability rules (PSR) allow for certain add-backs which might be booked as losses in the club’s accounts. Chelsea’s PSR compliancy has been achieved by player trading and also the sale within the consortium’s ownership group of the women’s football operation. As an asset that has been valued at considerably more than the £76 million which the two Stamford Bridge hotels were valued at in a similar transaction.
Rival clubs do not like that sleight of hand but they are also intrigued by Chelsea’s position in the market. That is to say, massive outlay on young players with contracts with smaller basic elements that are heavily incentivised. Club sources believe that the March financial results will see operating losses much reduced from previous years, although not wiped out. It was a good summer for sales. Conor Gallagher, Ian Maatsen, Lewis Hall and Omari Hutchinson generated around £120 million in fees between them. The sale of those academy players dismayed some, but the club will claim that it was driven principally by the requirements of Maresca. Chelsea turned down interest from Bayern Munich in another academy graduate Levi Colwill.
What next? As well as a squad Chelsea hope that the investment has amassed a portfolio of players who can be moved on relatively easily as some careers progress under Maresca and others stall. Chelsea are moving into the phase where they will have to trim some of those young players from the squad. That is the key test of the long contract model. Could the likes of Cesare Casadei, 21, contracted until 2028, or Axel Disasi, 26, contracted until 2029, be moved on at a premium with their current contractual expectations?
The club believes that its contract model is flexible enough – with a significant enough share of any deal variable according to performance that it will be possible to sell at value. For the likes of Palmer and Nicolas Jackson the judgment is different again. Both have signed deals of a length hitherto unseen in English football: until 2033. Premier League clubs just do not agree deals of that kind but Chelsea also think it gives them a decade’s worth of value secured for relatively small transfer fees. The salaries might yet rise over time according to performance.
Cole Palmer 🥶 pic.twitter.com/p6NlgCWZpu
— Premier League (@premierleague) December 11, 2024
Whether it works in practice remains to be seen – but if the players are successful, it is the club in control. The doping case against Mykhailo Mudryk this week has demonstrated that however impressive this portfolio of assets might be on a spreadsheet – Mudryk’s performances perhaps less so – they remain fallible. This trade in expensive humans is not a precise science. There have been accusations of PSR swaps – mutually beneficial players trades for PSR compliancy. What matters for Chelsea is whether this works on the pitch and whether the club passes the Premier League PSR. Leicester City have approached that challenge by reinterpreting the rules. Manchester City continue trying to rewrite them.
Scepticism about the effectiveness of Chelsea’s approach is a consequence of the unpredictability of much of the two and a half years since the sale of the club by Roman Abramovich. Eghbali and Boehly are no longer aligned, as Telegraph Sport revealed in September, and a parting of the ways feels inevitable although how that plays out is uncertain. Boehly is a seasoned investor who became the face of the consortium in its early days, and briefly the club’s sporting director. But it is Eghbali who is now most often in London and calling the shots.
The view from the Boehly side is very different. He is the chairman and his commitment to the job and his influence has not waned. Boehly’s approach to the club is to allow the management team to run the day-to-day operation. Eghbali, by contrast, is in the building and hands-on. Along with the investors Hansjorg Wyss and Mark Walter, the Boehly camp controls 38.5 per cent of the consortium. The remaining 61.5 per cent is under Eghbali and Clearlake control. Both men have sign-off over major decisions – like the sacking and appointment of managers.
One suspects that a compromise will be found and both men will be wary that in the world of private equity billions they may yet do deals again. It has been suggested Boehly may be interested in buying Telegraph Media Group. Again his camp declined to comment.
Chelsea unrecognisable from Abramovich era
The wholesale change of staff at the club makes it virtually unrecognisable from the Abramovich days when Marina Granovskaia was in charge of all she surveyed. The new ownership believes it inherited an under-developed staff profile, both on the sporting and commercial sides. It says it has increased investment by seven times although not all have stayed around for long. The search for the new front-of-shirt sponsor continues with the club unwilling to offer a discount on the remainder of this season.
In the academy the loss of Neil Bath after 28 years, as a consequence of the departure of his long-term colleague Jimmy Fraser was arguably the biggest upheaval of all. In their place has come, among others, Glenn van der Kraan, a young Dutch academy expert recruited from Manchester City. The club have signed its latest academy breakout star Josh Acheampong on a new long-term deal this month. All parts of the business are under pressure to generate greater revenue. The oft-repeated academy mission statement is to get players into the first team without long loan spells away. Not many of them, of course, will become long-term Chelsea first-team players.
There is no arguing with the success of the women’s team under new manager Sonia Bompastor. They were undefeated in 10 games in the Women’s Super League and top going into the weekend having won all six of their Champions League group games. There is discussion about new facilities being built for them at some part of the expanded site at Cobham which now encompasses land on both sides of the Stoke Road in the village of Stoke D’Abernon.
The valuation of that women’s team has played a crucial role in meeting PSR compliancy. That has been driven by the expansion of the sport in the US, with rising valuations of women’s football franchises. Although many of those in the National Women’s Soccer League, like Angel City, popular with investors, are standalones rather than part of clubs more famous for their men’s teams. It is not clear how that value might be separated in the case of English clubs with men’s and women’s professional teams but thus far it appears to have been done to Chelsea’s advantage.
Strasbourg, the Ligue 1 club bought by the consortium’s holding company BlueCo in 2023, is faring less well. Under Liam Rosenior, appointed in the summer, they have 17 points from 15 games which is precisely where they were at the same stage of last season with Patrick Vieira, who was sacked. Three of the Chelsea squad are on loan there and the Portuguese forward Diego Moreira moved on a permanent deal.
The club still faces a Premier League investigation into financial irregularities it discovered in the weeks before the deal to buy from Abramovich was completed in May 2022. The club believe that it is principally a tax issue. It has settled with HMRC and also with Uefa in this regard and believe any punishment from the Premier League will not be punitive.
As ever the question of the future of Stamford Bridge and the epic quest to build a new stadium on the Fulham Broadway site, home for 120 years, or acquire parts of the Earls Court development for a new build, remains open. It is arguably the defining question over the club’s long-term future, bigger than Palmer’s contract, the Eghbali-Boehly relationship and Chelsea’s annual battle to be PSR compliant.
Inside the new Chelsea model: How the 'billion-pound bottle jobs' silenced their critics
Todd Boehly (left) and Behdad Eghbali will feel vindicated by Chelsea’s improvement this season
These are delicate questions, not least because of the Chelsea Pitch Owners stake in the debate, the Byzantine challenges of planning, appeasing local residents, and local transport upgrade requirements. That is before the club win over the mass of match-going Chelsea fans or potentially secure a temporary home. Jason Gannon, the stadium executive credited with overseeing the building of Stan Kroenke’s SoFi Stadium in Los Angeles has all that on his desk. Winning the Premier League may well be a simpler task.
There are so many issues to resolve and whatever resolution Eghbali and Boehly reach will be central to it all. The first summer, when Boehly appointed himself sporting director, and the club signed the likes of Kalidou Koulibaly, Raheem Sterling and Pierre-Emerick Aubameyang for around £90 million is now viewed with a degree of horror. Although it was not a total bust for Boehly: he also signed Marc Cucurella and Wesley Fofana, both of whom would make Maresca’s current first-choice XI when fit. None of them came cheap.
It certainly could be a lot worse. For the time being Winstanley and Stewart, appears to have found a manager – or head coach – that suits their model. That transfer window of January 2023 when the likes of Noni Madueke, Enzo Fernández, Malo Gusto and Benoît Badiashile came in – as well as Mudryk – was when the club first committed to this new model. Young talent, incentivised contracts, long deals.
If this team does prove successful the club believes that it will eventually reduce wage costs – £404 million in the last results – and put itself in a position where it, and not the players, can make the big decisions on who stays or leaves. That was not the case with the Chelsea of 2022 with Antonio Rüdiger and Andreas Christensen out of contract. Certainly the surest sign of success will be when others start to imitate the Chelsea approach.
The club expects to sell more than they buy in net terms over the next 12 months, although again that remains to be seen. The Argentine defender Aaron Anselmino, 19, joins from Boca Juniors in January having been acquired and loaned back in the summer. The club’s Europa Conference League campaign has not been much of a challenge but it has allowed the club to trial many of its new signings for their suitability for English football without much jeopardy of defeat.
Marc Guiu’s hat-trick against Shamrock Rovers on Thursday at the very least raises his profile. Will the 18-year-old signed from Barcelona be part of the portfolio of tradable assets or one eventually bound for Chelsea’s first team? Come the summer there will be more teenagers arriving – the Brazilian winger Willian Estêvão and the Ecuadorian midfielder Kendry Páez, both currently 17.
These have been billed as major talents of whom much is expected, although they know what will happen if they fail to make the grade. The Chelsea model will move them on and the next cohort will arrive. There are many unknowables about the future but that cycle of acquisition seems to be about as certain as anything else that might happen over the next five years.
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