Boehly’s Chelsea Bets on Long-Run Accounting in Player Spending Spree

Chelsea FC player transfer spending this season under new owner Todd Boehly has exceeded that of any year under the club’s previous owner, the oligarch Roman Abramovich.

The Blues shelled out more than any other English Premier League club in the summer transfer window, and halfway through the EPL’s January transfer season, the American billionaire has pushed this season’s player transfer deals near the $500 million mark. The club’s heavy spending is getting a lot of attention—not just for the cash outlays, but also for the length of the contracts.

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For example, Ukrainian winger Mykhailo Mudryk signed with the London-based club for $108 million (£88 million) for the next eight-plus years, one of the longest contracts Chelsea has signed so far. The team also brought in 18-year-old USMNT goalkeeper Gabriel “Gaga” Slonina for $10 million on a six-year contract last summer, and snagged Benoit Badiashile from AS Monaco until 2030 for $43 million.

“What Chelsea decided to do is to spread the cost of the players by signing them on very long contracts,” Kieran Maguire, the author of the book The Price of Football, said in an interview. “By signing Mudryk on an eight-and-a-half-year contract, and this is how it’s done in football for accounting and financial fair play purposes, you take that £88 million and divide it over eight-and-a-half years, and it works out as just over £10 million a year.”

UEFA’s Financial Fair Play regulations were introduced in 2010 to prevent wealthy owners from swamping rivals with their capital, with mixed results. Last June, UEFA’s new financial sustainability regulations came into force and include more defined requirements and stricter sanctions. Under the new rules, clubs will be subjected to squad cost controls for the first time, eventually restricting spending on player and coach wages, transfers and agent fees to 70% of revenues. The gradual implementation will cap the allowable percentage at 90% in 2023-24 season, 80% 2024-25 and 70% 2025-26.

Maguire said the long-term deals help clubs reduce the immediate cost of the players, and they serve as “protection for the clubs from other clubs poaching their star players.”

Boehly is no stranger to the sports business. He and his partner Mark Walter, the CEO of Guggenheim Partners, own stakes in the NBA’s Los Angeles Lakers and MLB’s Los Angeles Dodgers, two of the most valuable sports properties in the United States.

Nor is Boehly unfamiliar with locking down players on long-term contracts. Mookie Betts signed a 12-year, $365 million contract with the Dodgers in 2021.

Chelsea’s heavy spending has yet to pay off on the field, as the club currently sits at 10th in the EPL table. Not only is Chelsea a longshot to qualify for the elite UEFA Champions League, which automatically takes the top four EPL teams and is seen by fans as the club’s birthright, the Blues wouldn’t even make the less-lucrative Europa League tournament if the season ended today.

“If we take a look at Chelsea when they won the Champions League in 2021, that generated around about €120 million in prize money, plus £3 to £4 million for each home game that's taking place at Stamford Bridge,” Maguire said. “Now if we compare that to the Europa League, for every one pound you make in the Europa League, you're making around about four and a half in the Champions League. So there is a significant knock-on effect if you don't qualify.”

Boehly, who became the club’s interim sporting director after taking ownership but has since stepped back from that role, fired coach Thomas Tuchel in September and replaced him with Graham Potter, who has been unable to deliver thus far.

Chelsea became the eighth EPL team controlled by American investors, purchasing the London-based team and other assets in May in a $5.25 billion deal, which includes $2.1 billion in infrastructure commitments for the next ten years. Boehly’s group includes Walter, Swiss billionaire Hansjorg Wyss and London real estate magnate Jonathan Goldstein. Clearlake Capital backed the group.

Boehly’s club will try to turn around its disappointing season Saturday at Liverpool, another American-owned club that is underachieving this season, stationed just ahead of Chelsea in the EPL standings.

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