Chelsea showing Newcastle United the way to go?

The question isn’t whether Chelsea can do it?

Instead, it is whether they should be doing it?

Their ‘busy’ transfer activity showing no signs of slowing.

The even bigger question then is…Are Chelsea showing Newcastle United the way to go?

I think fair to say that the new Chelsea owners are acting in a way that the media would LOVE the (not quite as) new Newcastle United owners to be acting.

If this was all happening at St James’ Park rather than Stamford Bridge, then I think the media coverage would be a ‘little’ different.

Looking from the outside, the Chelsea owners appear to be making it an absolute bigger joke of a club than it already was.

Sacking their Champions League winning manager Thomas Tuchel 32 days after the Premier League season kicked off after a ‘disastrous’ start of three wins, a draw and two defeats in their opening six PL matches.

Summer 2022 transfer window

This following a summer transfer window that had only closed a week earlier, when Chelsea spent a new Premier League record of £270m. Indeed, only Real Madrid (£292m in summer 2019) have ever spent more, in any transfer window, in any country.

Spending some £270m in summer 2022 on the likes of Wesley Fofana, Raheem Sterling, Kalidou Koulibaly, Marc Cucurella, Pierre-Emerick Aubameyang and a host of younger players…has only been the start.

January 2023 transfer window

Chelsea have now spent a further £142m with Mykhailo Mudryk having now joined Joao Felix, Benoit Badiashile, David Datro Fofana and Andrey Santos at Stamford Bridge this month,

More signings expected before we get to February 2023, maybe £75m on Moises Caicedo or £105m on Enzo Fernandez, or both! After all, who’s counting or apparently caring, which absolutely wouldn’t be the case if this was Newcastle United.

BBC Sport explaining the Premier League and UEFA position when it comes to staying within financial rules:

‘There are two sets of rules that Chelsea have to adhere to – the Premier League’s profit and sustainability rules and, as they regularly play in European competition, Uefa’s Financial Fair Play regulations (FFP).

Premier League profitability and sustainability rules allow for total losses of £105m over a three-year period. Any club that posts losses in excess of that figure could face penalties, including large fines or even a points deduction.

Under Uefa’s current rules, clubs can spend up to 5m euros (£4.4m) more than they earn over a three-year period. They can exceed this level to a limit of 30m euros (£26.6m), if it is entirely covered by the club’s owner.

Uefa has a wide-ranging list of potential punishments for clubs which break these rules – such as Wolves in 2020 – from warnings, fines or even the loss of European titles.

However, new Uefa rules introduced in June limit clubs’ spending on wages, transfers and agents’ fees to 70% of their revenue, though permitted losses over a three-year period have risen to 60m euros (£49.96m).

Clubs have been given three years to implement these changes.’

Other considerations

The thing is, it isn’t just the massive expensive squad Chelsea had, or these seriously expensive extra January transfer fee additions, you have a wage bill which almost must be now taking on a life of its own.

Chelsea charging around the transfer market like a seven year old playing Monopoly for the very first time.

When buying the club off Abramovich, the new Chelsea owners stated they had paid £2.5bn to purchase the club AND were committed to investing another £1.75bn. The way they are going that won’t be taking very much longer to get through…

As well as the transfer activity since coming in, the Chelsea owners…

Paying the sizeable pay-offs to move out Thomas Tuchel and his people.

Paying the weighty compensation to Brighton to take away Graham Potter and his people.

Then I know it was before they arrived but it was only 17 months ago (August 2021) that Chelsea paid Inter £100m for Romelu Lukaku. Only 16 Premier League starts and 10 months later, these new Chelsea owners then loaning Lukaku back to Inter for a £7m loan fee. The Belgium striker will turn 30 in four months time (May 2023) and he has only managed to start four Serie A games (and score one goal) during his loan spell so far.

Whatever transfer fee (if indeed they ever manage to sell him) that Chelsea eventually rescue from that original £100m, will be minimal.

Coming back to the original questions at the start of this…

The question isn’t whether Chelsea can do it?

Instead, it is whether they should be doing it?

Tackling that first question, exactly how can Chelsea do what they are doing in the transfer market without FFP rules and suchlike piling down on top of them?

Well, for example, Mykhailo Mudryk has been signed for £89m on an eight and a half year contract, whilst Benoit Badiashile arrived for £35m on a seven and a half year contract.

When it comes to FFP, the clue is in the length of the contracts.

Amortisation works a bit like depreciation.

In simple terms, Chelsea are spreading the FFP obligations (dangers!) over a lot of years. So instead of say the full £89m appearing in this current season’s FFP figures / accounts, it is being divided up, with around £10m per season laid down over nine years / seasons. The same with Benoit Badiashile, his £35m working out at £5m per season for FFP, in each of these next eight seasons.

The Newcastle United owners could be doing all of this, at least up to a certain level, the question is though, should they be doing it?

The problem (or at least it is one of the significant problems) with what Chelsea are doing, is that it is simply pushing back / creating problems for the future, a huge gamble. For example, if I have counted right, as things stand, in the 2030/31 season, Chelsea will still have £10m that year in their accounts towards their FFP limits from this January 2023 signing of Mudryk.

You can’t keep doing this every window, every year / season. It will eventually catch up with you, unless of course the gamble pays off and you get massive success on AND off the pitch (you only have to look at Lukaku to see just how disastrous a very expensive signing can turn out to be).

However, already the cracks are surely starting to appear, the Chelsea owners clearly terrified of not qualifying for Champions League football next season. Clearly they are not going to win the Champions League, then as for the Premier League, they are ten points off the top four at the halfway point and the bookies make them a one in thirteen (12/1) chance of finishing in a Champions League spot.

The spending by Chelsea owners is crazy enough anyway, but if to a backdrop of not having Champions League football and more importantly CL cash, from both the competition directly and indirectly (sponsors paying less if not in the CL), then surely a disaster coming their way unless they find a route back to at least relative success.

When I talk about cracks clearly appearing, I would especially point to a signing like Joao Felix. Unlike the signings given contracts until 2030 and 2031, Felix is until (end of June) 2023.

There is no option to buy and yet Chelsea are paying a £10m loan fee plus massive wages, something that works out at around £1m per match, if indeed he is available for them. Sent off on his debut (the day after signing!) in Chelsea’s defeat at Fulham, Felix won’t play another league match for over four weeks, as he now misses the next three PL games. By then, the blues will have only 16 PL matches left to try and salvage their season.

This Felix signing was surely clearly an absolutely desperate one, a massive sum of money for a player to play half a season, purely to try and somehow get into a top four spot and qualify for Champions League football next season.

Again, as I say above, the media would have absolutely loved it if Newcastle United were doing what Chelsea (Pictured above with Amanda Staveley and Mehrdad Ghodoussi is Chelsea co-owner Behdad Eghbali) are doing, gambling crazy money now and risking a total crash and burn and endless issues with FFP especially, if it all went wrong.

Chelsea have already spent more than twice as much in these last two windows (summer 2022 and January 2023) as the new Newcastle United owners have done in these last three windows and every chance surely that Chelsea will take their transfer spend way beyond half a billion this season by the end of the month, never mind wages and agents fees amongst other costs.

I can’t help feeling as well, that just like it was for so many managers under Abramovich, just how much say has Graham Potter got, when it comes to doing things his way?

You have to question whether they were Thomas Tuchl’s signings in the summer and likewise, is this really Graham Potter’s choice to have crazy spending mid-season, rather than taking the time and planning properly for the summer, to have a proper structured thought out route for moving forward and bringing in the players he really wants…?

Putting aside the politics of the situation at St James’ Park, when it comes to purely the football / business side of how the Newcastle United owners are operating with the key employees such as Eddie Howe, Dan Ashworth and Darren Eales, it appears to be a world away from what is happening at Chelsea.

Long may that continue.