The Chelsea Corruption:what goes on in financial fair play?

Over this winter transfer window, Chelsea FC has broken history in the transfer market. Throughout this window, the club has gone from signing major marquee signings to splashing significant cash on utility players. Two of the most notable signings came from the young Ukrainian player of the year, Mudryk. The flashy argentine Enzo Fernandez, who ended this year winning the world cups young player of the year, is a pivotal piece of the success Argentina experienced in winning the World Cup. Accumulatively, Chelsea football club has now spent a lucrative amount of 600 million dollars within the last year. This insane amount of money dwarfs other well-known and prestigious soccer leagues, such as the Spanish league known as la liga and the Italian league known as serie a, which collectively spent 50 million dollars on players. With this influx of players and earnings, this has started to beg the question for football fans, how is Chelsea doing this? Where did this influx of money come from, and how is it happening now? Is there anything illegal or that violates financial play rules? Most of all, how does this affect Europe? Is this a positive thing for the beautiful game, or is it detrimental to the sport? The answer to all of these questions may do more than shock you but surprise you. 

To look at the present, we need to backtrack to the beginning of 2022, to the invasion of Ukraine. During this period, when Russia began to rush and invade Ukraine, we saw absolute chaos and carnage worldwide. Different markets were out of control, such as inflation on gas and various oils, as well as the importation and exportation of nations being halted due to the politics of the scenario. As world leaders began to condemn and publicly shame Russia and Putin for their actions, those involved within the Russian Oligarchy or the governmental power structure began to pay. One of those people is Roman Abramovich. Abramovich purchased Chelsea football club in 2003 and had immense success with them over the past couple of decades, winning multiple English premier league titles and European cups. However, as he was linked to Russian Oligarchy, the English government and football association began to attack him. His personal and business accounts were frozen, meaning Chelsea could not purchase and transfer players, and the mainstream of capital was lost. Chelsea’s hands, as well as Abramovich’s, were tied. Despite Abramovich’s desire to help and keep Chelsea, the board and he saw no other option than for him to depart with the club. This decision led to Chelsea’s quick and prompt sale, which began the chaos through an American sports fanatic purchasing the club. 

At the beginning of 2022, Chelsea was purchased by the American philanthropist, business owner, and billionaire Todd Bohely. Todd Bohely was known in the sports world through his ownership and success with the La Dodgers and being a part owner of the Los Angeles Lakers. He amassed his wealth after attending the University of economics in London, where he pursued investing and finance, which was highly lucrative for him. Ever since he purchased Chelsea, he immediately looked to implement significant changes, sacking their coach at the time, Thomas Tuchel, to bring in Brighton Hove Albion’s Graham Potter, a very disciplined and tactically intelligent coach on the rise. He has looked at this Chelsea squad as a team that requires reinforcements and greater depth. When looking at Potters and Bohely’s transfer business, they have done more than that. By looking at their depth chart, they can create two starting elevens that would have the capability to compete with any other top-six side. As stated by Vivell, a technical director Todd Bohely Brought in during his start at the club, [Boehly] will provide the necessary support to Graham and the ownership group and play a vital part in advancing our overall vision for the club”. Although there have been some questions about the ethics and regulations around the transfers, when looking at the complexity and difficulties that matching markets can create, this string of marquee signing after marquee signing has been nothing less than extraordinary. 

How do transfers, at their core, truly work? Most people are under the assumption that a player, when they are not happy with the club, can reach out to other clubs and have a club buy out their contract, and then proceed to sign them. However, this would be extremely far from the truth and highly simplified. Like many other matching markets, many different complexities and challenges come from two parties having preferences and desires to fulfill. When a club signs a player, they own that player’s ability to compete, market, or be within that league. The clubs control all the power as they have purchased that player’s time and can now do as they please. This market is similar to a business conglomerate hiring consulting or other business services. The services are instead of creating proposals, the benefits are having a quality pass or a fantastic shot that will add quality or that special touch to a team. When clubs desire a player, they must approach a club and show their desired interest in the player they are pursuing. They must then agree on how much they believe that player is worth and how much that player would be sold for in an agreement. If they can come to an agreement, then the club interested can approach the player, hoping to come to personal terms in contracts involving time at the new club, wage, and club role. A transfer can happen if all considerations are in line, such as personal interests (homes, families, etc.) and finances. This process is extremely tedious and challenging and can have multiple breakdowns due to many uncontrollable factors. The fact Chelsea was able to achieve various marquee signings, as well as numerous impactful signings, is beyond impressive

Chelsea as a club, however, is pretty sizable. They have significant financial backing, deeply rooted success in their history, and an already solidified and present brand. So the question must be asked, why is Chelsea now splashing the cash? Apart from the interview, answers of wanting to strengthen and solidify their squad for the future are genuinely unknown by everyone but Bohely and his board. However, Chelsea could look to have these players appreciate as they hope to increase their club’s value over time, as Bohely looks at Chelsea as an investment at the end of the day. One question that must be asked due to the presence of other clubs like Manchester City is how Chelsea splashes the cash without violating any financial fair play rules, which are generally based on clubs having limits on how much money they can spend in a year. Manchester City was purchased by a Saudi Arabian conglomerate in 2014, which led to extreme amounts of money to be paid within the transfer market, which has recently led Manchester City to be in trouble with the English Football Federation. The genius in Chelsea’s transfers is the legality and tiny details found in the contractual bindings and layout of these new player contracts. Take Mudryk, for example. He has been purchased for an overwhelming fee of 80+ million. However, Chelsea had him sign an eight-year contract, creating a payment plan of 8 portions of paying Mark’s former club, which balances the book. This season Chelsea only has to register a transfer of 8-10 million rather than 80-100 million. Apply this strategy to your transfer army, and you are within the guidelines of all financial fair play rules. 

So what does this mean for the rest of the football world and the English premier league? This ability to use the legalities and different bindings has now been restrained after Chelsea’s actions. In the future, we can see that this could create inflation within the transfer market as more clubs with this financial backing will expect this, leading to a shift in the entire transfer market. As of when I’m writing this, Chelsea is sitting in 10th place and in dire need of these reinforcements. Time will tell how well Bohley’s strategies will work, but we can see for now that another part of the footballing world has been changed forever.

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