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What has gone wrong at Chelsea? With billions invested into the club, more signings in the last few years than most have made in a decade, plus plenty of gifted players - how has the club found itself in trouble both on and off the pitch? From the new Premier League rules to the finances that just don't add up, this is why Chelsea are officially broken.
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0:00
Since taking over in 2022, new Chelsea owner Todd Bolia spent over £1.5 billion on players
0:06
over the course of six managers, but success has still been hard to come by. And right now
0:12
FA Cup final or not, things are looking pretty bleak amid the team's worst run of form this
0:17
century. But that is just the tip of the iceberg, because the bigger picture is that one of the
0:22
most ambitious projects in football history is currently a financial and sporting nightmare
0:27
From matchday protests to insane transfer policies and the Premier League's new financial rules that could turn these eight-year contracts into a bankruptcy trap, this is how a failed multi-billion pound investment could cost Chelsea everything
0:44
The protests we saw before the Man United game weren't triggered by any given 90-minute performance
0:49
They were the result of wrong decisions and catastrophic results from all angles that winning the Conference League in Club World Cup were never going to paper over
0:57
Firstly, and in the short term, we have the recent results, where Chelsea are struggling to find the back of the net, never mind a win
1:03
with their current league form seeing them fall out of the Champions League spots after a run of five straight Premier League losses
1:09
And then they sacked Liam Rossini after four months in charge, to the fine tune of a £4 million payout
1:15
He obviously wasn't capable of getting a tune out of the players, and certain individuals have been talking about their futures in the press more than they should be
1:22
But overall, I think we can liken his tenure to a brief flash of lightning
1:26
in what is undoubtedly a storm that is going to get worse before it gets better
1:31
Secondly, and in the midterm, it looks as though the club's moves in the transfer market
1:35
haven't quite paid off as well as they'd have hoped. Sure, there's plenty of exciting talent in Esteval, Palmer, Caicedo, Pedronetto, Jean
1:41
Pedro, but for the few good signings, there's been an awful lot of bad ones
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So many, in fact, the entire squad couldn't all fit into one changing room last summer
1:49
and there was even a so-called bomb squad of those left out of the Premier League registration
1:53
list entirely. On top of this, so many signings appear to be for the future at Chelsea
1:58
that they are neglecting the now, the need to win on the pitch this week, this season
2:04
Young stars with potential are all well and good, but I get it. There's only so many times fans can sit there, watch a poor performance and say
2:11
ah, he's just a kid, he'll come good in a couple of years. It's not ideal
2:15
Oh, and if that wasn't bad enough, any connection the fans had to the team through homegrown talents
2:19
has been obliterated through the forced sale of academy products like Mountain and Gallagher
2:24
The reason for which we'll come on to a little later. But the biggest issue that gives Chelsea fans long-term fears lies in the boardroom
2:32
Not only are the club operating at a loss of almost £700m in the last few years
2:37
but the promise of a multi-club ownership model has bared little to no fruit
2:42
When owners Bluco bought the French side Strasbourg they said it would be for everyone benefit Instead Chelsea fans have watched as their club has been treated like an office experiment and the appointment of Liam Rossini was the final straw Poaching a manager from your own sister club a manager with no elite level experience or trophies by the way
3:00
told the fans exactly what the owners think Chelsea is, just another step on the corporate ladder
3:05
But the bigger question on that front is why are Bluco failing in a sport where there is precedent for multi-club ownership success
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Chelsea! Chelsea! Chelsea! Chelsea! Chelsea! Honestly, where I think Chelsea go wrong in this area is that they lack a multi-model identity that is sustainable in both the long term and the short term
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Let's look at City Football Group as an example. Their model is vertical integration
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They have a global scouting network that feeds Man City's academy and makes some money in the transfer market, but also develops each club independently
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Players and managers don't really get promoted to Man City. In fact, their sister clubs are barely used at all in the transfer market
3:43
Only Savino has made that move. Instead, City make decisions based off who can help them achieve things immediately
3:49
Their priority is to compete, to win now. Then look at Red Bull
3:54
Their model is tactical uniformity wherever they are. Salzburg to Leipzig, every team plays the same 4-2-2-2 formation
4:01
with aggressive pressing, rapid transitions, high intensity. It's basically a factory for players with relatively little risk
4:07
is if you succeed at one team, you'll then likely fit at the next stage. And once you reach the top, you're a fully formed valuable commodity that clubs will buy
4:15
because you came from a trustworthy seller. Put it this way, if you're buying from Red Bull
4:20
a company that has either scouted or developed the likes of Haaland, Mane, Shoboslav, Conrad, Lima and plenty more
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the seal of approval is all the clubs need. We aren't done there though
4:31
Liverpool owners FSG, for example, who are relatively close to Bluco in terms of owning other US sports teams
4:36
focus on financial sustainability. It's data-led growth within a budget where the club never spends more than it makes
4:43
It's why Liverpool were able to drop over £400 million in one transfer window last summer
4:47
And then we come to Blueco. Their model? Buy low, sell high
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They're not buying clubs to create a tactical identity or global brand. They are buying clubs to stockpile intangible assets
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They buy teenagers who are relatively low to mid-sum, sign them to an eight-year deal
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and hope the law of averages kicks in, where one in every three or four that flop
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there's one that becomes 150 million pound player. The problem there is quite clear
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There's no attempt to win now. No attempt to brand yourselves as a talent factory
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and no attempt to compete at the top level of football in the long run
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While City and Red Bull are building empires, Blueco are essentially running a high stakes pawn shop
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But where has this lack of foresight come from? Well, part of the problem is that they've lent on their previous experience
5:31
in running sports teams from entirely different sports altogether. We have a doctor
5:37
Yes sir Todd Bowley and investors Clear Lake Capital frequently cite their ownership of the LA Dodgers as their success story In baseball their model works They spent big scouted well led Major League Baseball in revenue and have won the last two world titles
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Great success. So why hasn't it worked at Chelsea? Well, basically because the Premier League is a meritocracy and not a closed shop
5:59
In US sports, there's drafts and salary caps. Teams often tank where they lose on purpose when nothing is on the line at the end of the season
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because the lower you finish, the better draft picks you get. If you tank in the UK, you get relegated
6:11
or at the very least, you become a mid-table club that can't attract the biggest sponsorship
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loses their best and most ambitious players, and misses out on Champions League revenue
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Also, in baseball, you can carry a massive roster of prospects in the minor leagues
6:23
that can develop for five years without it affecting the main team's salary cap
6:27
In football, there's obviously no minor leagues. If for whatever reason, Garnaccio, DeLapp, or Enzo Fernandez aren't starting
6:33
they are depreciating assets. Their value is closely tied to their performance on the pitch
6:38
By trying to run a football club like a baseball franchise, Blueco have created a backlog of players without a shop window to showcase themselves in
6:45
And if nobody sees your ability, you aren't worth much. And it's this particular issue that makes for bad reading for the future
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due to the brand new Premier League's financial rules that are rolling out next season
6:59
Do you ever wonder why Chelsea are signing massive players for not only big money
7:03
but on ridiculously long contracts? Well, it's all to do with something called amortization
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which is the spreading of cost of an asset over a set period of time
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For example, they signed Moises Caicedo for an initial £100 million on an eight-year deal
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meaning the fee is spread out as £12.5 million a year on the books. That was clever, until the Premier League changed the rules
7:25
Starting next season, we move from PSR, the profit and sustainability rules
7:29
to SCR, squad cost ratio. And for Chelsea, this is a financial death trap
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Under the new rules, clubs are limited to spend 85% of their revenue on squad costs
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And here's the kicker. Whilst transfer fees are still spread out, wages are counted in real time
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Meaning when a team's squad cost is calculated every season on March 1st, they need to be very strict financially to make it under 85%
7:50
or else they'll face sporting sanctions like a points deduction. If it wasn't for using the loophole of amortisation and spreading the cost of huge transfer fees
7:59
The club might have locked Caicedo or any other player into a shorter contract
8:02
maybe four or five years. But now they are locked into enormous wage bills well into the 2030s
8:09
So what do they have to do if they don't want to face disciplinary action
8:13
Sell their best players. Or even worse, sell them for a cut price because they're forced into it
8:17
The only way they can get out of this is by being good on the pitch, qualifying for the Champions League
8:22
getting a bigger stadium for better revenue, which looks a big ask at this stage
8:26
all so they can bring in more revenue, therefore boosting their 85 ceiling Stating the obvious here but none of that looks like happening currently Fortunately for them though there is another way of boosting their revenue by a fair chunk but it is absolutely soul destroying Before we get into that though a quick one for
8:44
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9:12
But for now, let's get back to the video. So everyone loves a homegrown hero, right? The player you can connect to, the one that young kids
9:23
look up to the one that represents the badge of local pride so imagine how detrimental it is when
9:28
they're sold not only for the fan club relationship but for the dressing room morale as well well
9:34
that's what clubs do when they are chasing pure profit under premier league rules if you sell a
9:39
player bought for 50 million you only make a profit on what's left of their book value but
9:42
if you sell an academy graduate every penny is recorded as 100 pure profit but when a prized
9:48
asset like an academy graduate sold to fund the purchase of an unproven 18 year old from someone
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else's academy it's almost like sending the club's soul these fans are seeing their local heroes
9:58
being treated like financial units to fix the mistake of the owners so with all of this sounding
10:04
very doomsday what does the future actually hold for the club well from what i can see there are
10:09
three paths and only one of them ends well first there's a scenario which the realities of cold
10:14
hard business come into play. If success doesn't come Chelsea's way soon, future projections are
10:19
looking bleak and the club's value starts to stagnate, the owners could sell, if they agree
10:23
on it. Reports circling the club suggest that there's a breakdown in the relationship between
10:27
Boley himself and those at Clearlake, an internal rift that could deepen should the club be forced
10:32
to sell in any way. Second, the collapse of the multi-club model, of which we are already seeing
10:38
the strain. If Chelsea continue to bleed money, Blue Co may be forced to sell Strasbourg, or their
10:43
other satellite clubs just to keep their biggest asset afloat. That's obviously brutal for the other
10:48
clubs being used like that, but by the sounds of it, I think they'd welcome a change in ownership
10:52
anyway. And lastly, what they could actually do is do what a football club is first and foremost
10:58
supposed to do, win football matches. Yes, after all this talking, the way out is actually just to
11:04
be competent on the pitch. They could pivot away from unproven project managers and return to a
11:08
plan that includes an experienced, top-level, albeit expensive coach that can take this group
11:13
of individuals and turn them into a team. But that requires something the ownership has lacked
11:18
humility. It requires admitting that their model has failed and that football is won
11:22
on the pitch, not at the end of a spreadsheet
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