Chelsea signalled the potential dawning of a new era last week when they proposed to buy the remaining ground shares currently owned by the fan organisation Chelsea Pitch Owners. This move could signal either a move to a new stadium or an expansion of Stamford Bridge. What becomes clear from this move, though, is that Chelsea are desperately seeking ways to squeeze out more revenue as they attempt to wean themselves off sugardaddy Roman Abramovich as they look to comply with the future implementation of the Financial Fair Play (FFP) rules. Chelsea are far from being a self-sufficient club and they are as reliant on Abramovich now as the day he took over, so why has such little stock been placed in the developing of talent?
Former Chelsea Chief Executive and all-round despicable human being Peter Kenyon declared back in 2008: “The long-term plan here was always that we needed to be profitable, non-loss-making and self-funding. In terms of breaking even, I think it will be 2010-11 but, this year, we’re very clear about achieving no-funding targets from the owner. It’s a process we believe can be achieved by the end of this season. I think we’ll be growing revenue.” Going into this season, Chelsea are operating at a financial loss of £70m. So where did it all go wrong?
There was a clear transition in terms of the club’s transfer policy, particularly under the reigns of Felipe Scolari and Carlo Ancelotti, until January last year at least, as the club cut it’s cloth accordingly. As a result, the spine of the Chelsea side has aged and now requires replacing.
The dreadful job Frank Arnesen did at the club now only begins to come under more severe scrutiny. The club have failed to develop replacements for the likes of John Terry, Frank Lampard and Didier Drogba internally and so in order to continue to compete, they’ve been forced to go out and buy their replacements at great cost.
The club have spent a net amount of £112.5m on transfers in 2011 alone as they’ve brought in the likes of Fernando Torres, Juan Mata, Romelu Lukaku, David Luiz and Raul Meireles.
During Abramovich’s seven-year reign at the club as owner, the club operate, on average, at a loss of £79.7m a year. Also, the club’s wage structure is completely all over the place as wages account for 82% of turnover, which when you compare it to Man Utd’s 46% and Arsenal’s 50%, it simply serves to highlight how terribly the club is being run in the long and short-term.
Such high wage turnovers are usually indicative of a club with an ageing squad. It’s difficult to move on players when they approach a certain age as other club’s are unwilling to match the hefty wages that they’re currently on.
Cast your eye around the current Chelsea squad and it’s clear that the emphasis that looked to be switching under Ancelotti has reverted back to type, with barely a young player in sight.
Josh McEachran is held in high regard around Stamford Bridge and looks to have a bright future in front of him, but his first-team chances look to be limited already this term by the arrivals of Juan Mata and Raul Meireles. Daniel Sturridge and Ryan Bertrand do offer a glimmer of hope to a future not revolving entirely around Roman’s roubles, but it’s clutching at straws, with only Sturridge really in contention for a regular first-team berth.
The club simply abandoned any perspective or proposed long-term project they apparently had on the go back in January last year when the club purchased both Fernando Torres and David Luiz for upwards of £70m.
Almost overnight, the club strayed from the pulpit of self-sufficiency which they had been preaching to all and sundry for two seasons and contradicted their earlier summer transfer business of releasing experienced pros such as Michael Ballack, Deco, Joe Cole and Belletti in favour of promoting and integrating their youth-team squad into the first-team.
The reason for this – Chelsea had fallen behind by 10 point to Man Utd. Self-sufficiency went out of the window and with it, the experiment in promoting youth. The cheque-book was open once more, and once it’s been opened, it’s proven extremely difficult to close in the past.
Chelsea’s Chairman Bruce Buck had this to say on what the future holds: “We have to up our sponsorship income, there’s no doubt about it, and up our match-day revenues, reduce our transfer fees a bit, reduce our payroll a bit. I’m not saying the job we face is easy, it’s difficult, but we have to do it. Naming rights could be an important component. We always were of the view that we couldn’t rely on Mr Abramovich forever, it just wasn’t appropriate. We had to figure out a way over the medium term to stand on our own two feet and maybe Financial Fair Play is making us do that a little bit quicker than we might have done otherwise.”
Chelsea’s failure on the pitch could cost them dear in the future and in-turn affect the fans on the terraces with inflated costs. The club’s reluctance to integrate youth-team players, with the FFP rules coming into effect in July 2014, could haunt them long into the future. The club’s current rebuilding project looks to be going reasonably well, despite being in it’s relative infancy under the stewardship of Andre Villas-Boas. The success of the loan spells of players such as Patrick Van Aanholt, Jeffrey Bruma and Gale Kakuta has now taken on even greater importance.
Roman Abramovich’s apparent obsession with the now and a refusal to plan ahead for the future is in direct contrast to Arsene Wenger’s plan at Arsenal. Neglecting a crucial component of any well-run football club – the academy – could see Chelsea have either an unbalanced and bloated squad or one low on the necessary quality in the future as the FFP rules begin to bite. It is little more than rank mis-management among the higher echelons of the club.
Abramovich continues to loom large over the club and while his finances represent Chelsea‘s biggest strength, his refusal to place any faith in a long-term strategy could yet prove to be their greatest weakness.
You can follow me on Twitter @JamesMcManus1
What have you got to lose – so sign up for the chance to watch the Chelsea boys up close and personal.