It was a transfer window unlike any other. It
shocked the watching world and seemed financially impossible.
But this is the story of how Chelsea took advantage
of loopholes, spent £290m and broke the transfer market in January 2023.
In the space of just a few hours on the final day of
the transfer window, Chelsea spent a Premier League record transfer fee,
sanctioned the sale of their vice-captain and managed to drive one of Europe’s biggest clubs
to distraction to such an extent that they labelled Stamford Bridge a “Class A circus”.
The transfer record first: Enzo Fernandes.
On January 3, fellow co-owners Todd Boehly and José E. Feliciano had
boarded a plane along with Behdad Eghbali, a co-founder of Clearlake Capital, to London.
They met Benfica president Rui Costa and Fernandez’s agent Jorge Mendes for dinner
at the Bulgari Hotel in Knightsbridge to discuss the purchase of the player,
during which Benfica made it clear they wanted the £106.7m release clause paid in full.
At that time, Chelsea had no intention of meeting that valuation. One factor
that would help change their mind, however, was learning of two clubs
ready to spend £100m on Fernandez in the summer, by which time the Londoners
might not be able to offer Champions League football. It was now or never, they felt.
Chelsea would pay in six instalments, rather than one lump sum, with a first down-payment
of £30million and a deal completed just after midnight on deadline day.
The delegation in Cobham were ecstatic; although not everyone shared their joy.
On the same day, Hakim Ziyech had travelled to Paris to secure a loan to PSG. The 29-year-old
was in PSG’s offices, waiting for positive news. By evening, there had been nothing
from Chelsea for a while and Ziyech’s agent became increasingly agitated. Ziyech took to
messaging Boehly directly, pleading with the co-owner to speed the process along.
At 9.40pm, having been given the go-ahead to conclude a loan until June, PSG sent Chelsea a
markup of their agreement. The document needed to be signed and returned to be lodged with the Ligue
de Football Professionnel (LFP). Instead, nothing. According to a PSG source, a succession of
unsuccessful attempts were made to contact Chelsea by telephone with the deadline minutes away.
Just before 11pm, an email was received but the attachment was not the correct document. It was
also unsigned. PSG re-sent the loan agreement, signed by the club and Ziyech and, once again,
received an erroneous document by return — again unsigned. The right form was sent at the
third attempt, at 11.03pm, and the contract was downloaded on the French league’s system a minute
later. But the deadline had been missed. The source described Chelsea as “a Class A circus.”
Chelsea contest that sequence of events. They were
also mystified by suggestions that no one had responded to a phone call.
Regardless, Ziyech was left stranded in Paris looking for somewhere to stay.
Incoming signings have obviously been more successful.
When, for instance, it was decided that Chelsea would go all out to hijack
Arsenal’s move for Mykhailo Mudryk, club representatives flew to Turkey
and persuaded both the winger and the Shakhtar Donetsk hierarchy over eight
to 10 hours of presentations and talks to deal with them instead.
Fernandez and Mudryk headline an exciting and youthful list of acquisitions that include
defender Benoit Badiashile, winger Noni Madueke, midfielder Andrey Santos and forward David
Datro Fofana. Full-back Malo Gusto has also been signed and loaned back to Lyon until the summer.
All fit a certain profile: Unlike in the Summer of 2022,
Chelsea were determined that their signings in January would all fit
their broader vision to build a squad of young, hungry footballers of elite talent.
The bigger question, though, is how Chelsea were able to make this
unprecedented level of transfer spending work within UEFA’s Financial Fair Play regulations?
The answer is complicated and is based around player amortisation and contract lengths.
By signing Enzo Fernandez to a deal that runs until June 2031, for example, Chelsea enabled
his £106.7 million transfer fee to be spread across eight-and-a-half years on the books rather
than a more conventional four or five, thereby greatly reducing his yearly cost on the accounts.
Mudryk, Badiashile, Madueke, Gusto and summer-signing Wesley Fofana are
on similarly long deals. This amortisation trick — which could end up backfiring if the
players on these super-sized contracts fall short of expectations on the pitch — is one
of the conditions Boehly and Clearlake have exploited to carry out the level of
spending that most elite clubs would have to stretch across three or four summer windows.
Another comes from the other half of how football clubs report transfers in their accounts. Transfer
fees for purchased players might be amortised over the length of their contracts, but transfer fees
for players sold are booked immediately, minus their remaining amortised cost on the books.
These differing accounting practices can make it surprisingly easy for
clubs to significantly offset or even completely balance signings.
UEFA have already moved to close the amortisation loophole for future transfer windows:
even if a player is signed on a seven- or eight-year contract from the summer onwards,
their transfer fee will be spread over no more than five years in any FFP calculation.
So, even clubs who can afford to copy Chelsea’s approach in January 2023 won’t be able to.
And it’s been a more targeted strategy than assumed. The club have signed players aged
23 or under who can either blossom into key components or grow their resale value.
Even if those winter signings fail to impress at Stamford Bridge, the majority
are on considerably lower salaries than many of their team-mates acquired under Abramovich.
Mudryk, for example, earns a basic wage of £97,000 a week. Their contracts also contain
provisions that reduce wages if the club does not qualify for the Champions League.
The thinking being that these shifts in policy will make under-performers far easier to sell.
No one should expect this level of transfer spending to continue indefinitely, of course,
but the scale of Boehly and Clearlake’s ambition for Chelsea is remarkable,
as has been the money they’ve put behind this lightning-fast transition towards a new era.