Is Chelsea’s wild transfer strategy a game changer or just self-sabotage?

Additional reporting by Gabriele Marcotti and Tor-Kristian Karlsen.

Twenty-two minutes into Chelsea‘s new Premier League season, the fans at Stamford Bridge roused themselves into a chant after their team fell 1-0 down to Manchester City.

“Conor Gallagher,” they sang. Not the team’s name. Not their new manager. Not even one of the players signed at an outlay of more than £1.2 billion since Todd Boehly and Clearlake Capital completed their takeover of the club in May 2022.

Gallagher is an academy graduate with a genuine affinity for Chelsea. The fans knew he was leaving the club, spending the previous days exiled from the first-team group as part of a “bomb squad” — a term used in British sports to describe players marginalised by their managers, and in Chelsea’s case, made up of around 15 individuals — and effectively training in a holding pattern as they awaited confirmation of a new destination before the summer transfer window closed on Aug. 30.

Under Boehly/Clearlake, the Blues have spent eye-watering amounts signing 40 players while moving on or releasing 38 more. Ripping up football’s conventions on shorter-term contracts (in the three- to five-year range), they have signed many of these players to seven-, eight- or even nine-year deals.

When considering a range of backroom staff and scouting changes, the scale of personnel turnover at all levels of the club is surely unprecedented in elite-level football history. During previous owner Roman Abramovich’s 19-year tenure, the Blues never went two consecutive seasons without silverware. Yet the Boehly/Clearlake era is still waiting for its first trophy, boasting Premier League finishes of 12th and sixth, with Enzo Maresca the fourth permanent manager charged with the task of making it all come together.

“It is not a mess like it looks from outside, absolutely not,” Maresca said on Aug. 21.

The Chelsea fans are yet to be convinced.

They sang Gallagher’s name partly because he was one of the club’s best players last season, but also in a forlorn attempt to show Boehly and Clearlake they want something tangible to cling to, something they recognise as their own. Three days later, Gallagher joined Atlético Madrid for a reported transfer fee of €40 million.

Gallagher’s transfer, because he was an academy graduate, represented pure profit in accounting terms, but whatever the financial benefits, a popular and effective player departed. Perhaps a little piece of the club’s soul went with him, too. Meanwhile, the outside world is watching with a mixture of intrigue and incredulity as speculation surrounding the club’s compliance with the Premier League’s Profit and Sustainability Rules (PSR) persists after such lavish spending.

Welcome to Chelsea in 2024, a club in an identity crisis triggered by external factors, but the prolonged nature of which is their own making. Is there a method to their madness? How did they get here? What is their process, and what could come next?

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In a sense, the two ends of Raheem Sterling‘s loan move from Chelsea to Arsenal in the final hours of last week’s transfer deadline day sum up the respective states of both clubs.

During a maelstrom of late activity at the end of August, the Blues were scrambling to find a home for the 29-year-old, who was making £325,000 a week on the fringes of the first-team squad. Days before the loss to Man City, Maresca told Sterling that he was not a key part of his plans. Sterling, who sources say was shocked by the decision given his prominent role in preseason, reacted by asking for a permanent move to kick-start his career.

That was Chelsea’s preference, too, but as time wore on, it became apparent Sterling’s high wage was prohibitive to any transfer, especially given he had three years left on that deal.

Sources have told ESPN that Chelsea called a number of clubs to gauge their interest in Sterling. Interest from teams in the Saudi Pro League — the Blues’ ideal destination for Sterling — was quickly rebuffed by the England international, according to sources. In the final hours of the window, the Stamford Bridge outfit made it known to Arsenal that not only would they accept a loan, they would acquiesce to a relatively small contribution to his salary package.

The Gunners, settled and relatively content with their summer business — having added €45m defender Riccardo Calafiori and €32.5m midfielder Mikel Merino, while making goalkeeper David Raya‘s loan move from Brentford permanent — but open to bolstering manager Mikel Arteta’s attacking options, decided it was too good of an opportunity to miss. The final deal with Chelsea, no loan fee and a requirement to pay less than half of Sterling’s wages, saw them land a player with whom Arteta had developed a close working relationship during three years together at Manchester City.

The end result means that over the course of the season-long loan, Chelsea will effectively be paying Sterling in the region of £10m to play for Arsenal.

Before Sterling’s move was finalised, the Blues made Atlético Madrid forward João Félix the 39th signing of the Boehly/Clearlake era for approximately €50m; then, on deadline day, they made Jadon Sancho the 40th, on loan from Manchester United with an obligation to sign permanently next summer for around £25m. Both can operate as wingers, both in similar positions and styles to Sterling, and join a squad blessed with multiple options in wide areas already including Cole Palmer, Noni Madueke, Mykhailo Mudryk, Pedro Neto and Christopher Nkunku. Only two — or at a push, three — of these players are likely to start every week in a conventional system, despite costing the club a combined £256m in transfer fees.

Furthermore, Chelsea currently have no fewer than eight goalkeepers on their books: Robert Sánchez, Filip Jørgensen, Marcus Bettinelli, Lucas Bergstrom, Gaga Slonina, Eddie Beach, Djordje Petrovic and Kepa Arrizabalaga. The latter four were sent out on loan, but the club still signed a ninth, Mike Penders, who will join from Genk next summer.

The squad building in these positions appears nothing short of farcical. However, it is symptomatic of a clear change in approach from the ownership’s original strategy after completing their takeover in 2022.

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Chelsea’s sale was conducted and completed under worldwide scrutiny, beginning in abrupt fashion. The United Kingdom government identified Abramovich as an alleged associate of Russia president Vladimir Putin and had begun sanctioning such individuals following the country’s invasion of Ukraine in February 2022.

Abramovich had his assets frozen, travel restrictions placed upon him and was disqualified as a director. Chelsea were allowed to continue to operate under the terms of a government-issued license until the end of May.

Players could not sign new contracts and club merchandise could not be moved on. A frantic sale process began in March and ended on May 30 with Boehly and Clearlake agreeing a £2.5bn price — the highest ever paid for a team in world sport — with a commitment to invest a further £1.75bn in infrastructure.

ESPN has previously reported that Boehly and Clearlake Capital conducted a 100-day review shortly after taking over, but the churn at executive level began quickly. Chairman Bruce Buck, director Marina Granovskaia, chief executive officer Guy Laurence, technical and performance director Petr Cech, and head of international scouting Scott McLachlan all departed.

Sources with knowledge of the situation have told ESPN that Chelsea wanted Cech to stay on, but the longtime club goalkeeper (with a career spanning from 2004 to 2015) declined. Sources also said part of the overhaul was related to a desire from the new owners to distance themselves from potential problematic activities carried out by the previous regime, leading Boehly/Clearlake to self-report themselves to UEFA and the Premier League for “submitting incomplete financial information,” which reportedly included multi-million-pound payments to undisclosed offshore entities with connections to football intermediaries.

In July 2023, UEFA fined the Blues €10m for those transgressions, with the Premier League verdict expected by the end of the year.

During the interim period, Boehly (who also owns the Los Angeles Dodgers as part of the Guggenheim Baseball Management consortium) stepped up to operate as sporting director and Chelsea’s spending began. They had not been able to lay the scouting groundwork in the months leading up to June and July as is customary because of the widespread state of flux.

The subsequent explosion of transfer activity was arguably driven by two things: a desire to make a statement about their commitment to success, and an agreement with then-coach Thomas Tuchel’s assessment that the club needed to be aggressive in the market.

Sterling was the first permanent signing, joining from Man City for a £47.5m fee and agreeing a massive five-year contract. Sources have told ESPN that a sign of Chelsea’s early naivety was that Sterling’s deal did not contain standard reduction clauses in the event that the club underperformed and failed to qualify for the Champions League.

One agent who dealt with Boehly that summer told ESPN that when his player was in the middle of moving to another Premier League club, Boehly rang him to enquire the asking price. He was told around £12m. Shortly afterward, Boehly contacted him again offering £14m. The agent asked why they wouldn’t go to £13m as the next logical step. Boehly told him he thought the No. 13 was unlucky.

Joke or not, Chelsea’s contemporaries quickly formed a negative view of the new ownership.

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Of the nine players Chelsea signed in that first transfer window under Boehly/Clearlake — Sterling, Slonina, Kalidou Koulibaly, Carney Chukwuemeka, Marc Cucurella, Cesare Casadei, Wesley Fofana, Pierre-Emerick Aubameyang and Denis Zakaria (on loan) — only three are still part of the first-team squad, with three more out on loan and the remaining three departed.

The stockpiling of players in a bloated squad led to some having to get ready for sessions in the corridors at the club’s Cobham training base during Graham Potter’s reign because the changing rooms were not big enough, according to sources.

One scout who works for club in a Big Five European league, agreeing to speak to ESPN anonymously, said: “Perhaps Chelsea know something we don’t, but their squad building makes no sense to me. And I can’t see how it makes sense to Chelsea or the players who are brought in as sixth-choice centre-back or the seventh attacking midfielder.

“The only winners here, as far as I can understand, are the agents brokering the deals.”

What followed that first window was a shift toward assembling an elite and comprehensive recruitment team capable of identifying and acquiring the best young talent in world football, even if it meant continuing to manage a squad much larger than necessary. Premier League squads are limited to 25 players, but by the close of Friday’s transfer window, the west London club carried 30 footballers who would expect to be part of the first team — and another handful in the U21s who are pushing for involvement.

Chelsea’s recruitment staff is nearly as plentiful. It includes co-sporting directors Paul Winstanley and Laurence Stewart, co-director of recruitment and talent Joe Shields, director of global recruitment Sam Jewell, chief analyst Kyle Macaulay, head of goalkeeping Ben Roberts, head of performance services Nick Chadd and loans and pathways manager Josh Marsh. Some within the game believe there are too many voices involved in decision-making.

“I think the fact that they have two sporting directors tells its own story,” one longtime sporting director wishing to remain anonymous told ESPN. “The fact that you have two makes me think that they have little power or influence.

“The idea to build a squad in this manner goes well beyond any mandate of a sporting director, let alone the normal working methods of a sporting director. I think an experienced person with authority in that role would have said, ‘Hang on a bit, I’m not sure this is the way to do it.’

“At least I’ve still to find a colleague in the football industry that believes the Chelsea model is best practise.”

Sources have told ESPN that both Boehly and co-owner Behdad Eghbali, co-founder of Clearlake, believed the club’s analytics department was undervalued and there was an overreliance on agent relationships in their transfer dealings. A source close to Clearlake told ESPN that the club is now spending seven times as much on recruitment staff and data than when they completed their takeover. Placing much greater stock in the data points available to them, Chelsea began pursuing younger players — primarily under the age of 24 — on long-term contracts that were unprecedented in football but much more common in baseball.

The Dodgers committed to more than $1 billion and 22 years’ worth of contracts to sign transcendent talents Shohei Ohtani and Yoshinobu Yamamoto this past offseason. Ohtani’s deal included an unprecedented deferral structure, one that sent shock waves through baseball and will see him paid for 10 years beyond his playing days at Dodger Stadium.

Football is not used to such contract lengths. At one point this summer, Sky Sports produced a graphic suggesting that the 42 players on Chelsea’s books had a total of 191 years left on their contracts. The next-biggest number in the Premier League was Tottenham Hotspur with 97.

Sources close to Clearlake told ESPN that this approach was informed by various factors, starting with the loss of Antonio Rüdiger and Andreas Christensen on free transfers to Real Madrid and Barcelona, respectively, in 2022. Such a talented pair of centre-backs leaving for nothing was seen internally as a failure never to be repeated. Further lessons were learned in that initial flurry of recruitment in that signings on big wages who don’t work out quickly become extremely difficult to move on from, as evidenced by the situation facing Ben Chilwell — last year’s vice-captain who now makes up part of Chelsea’s “bomb squad.” Romelu Lukaku was already on the books having arrived in 2021 — a £97.5m signing earning £350,000 a week — but he had fallen out of favour and spent two years on loan before finally joining Napoli for £30m this summer.

A source close to Clearlake told ESPN that the contract philosophy can be summed up as, “If you play, we’ll pay.” So, young talented players on the cusp of establishing themselves are more likely to take a lower initial wage on a long-term contract with incentives built in. Another source added that the variables in these contracts, depending on the player, range from 25% to 50%. A seven-, eight- or nine-year contract offers security to the player and also provides a pathway within that contract for a salary to increase dramatically if certain targets are met. In an ideal world, the core group grows and flourishes together, bonded in the knowledge that they are “Chelsea for life.”

Last month, Palmer agreed what was widely reported as a new nine-year contract. However, sources have told ESPN that in reality it was an extension triggered by his own individual performances.

Palmer, who was named PFA Young Player of the Year after registering 22 goals and 11 assists in 33 league appearances in 2023-24, exceeded all expectations and was consequently rewarded with an improved deal as per the terms of his original, incentivised contract. Chelsea will hope their collection of young players progress in the same way as Palmer, who sources close to Clearlake suggest is proof their policy can work effectively.

There is an immediate financial benefit, too. Chelsea were originally able to spread the transfer fee over a longer period — the length of the contract — but UEFA and the Premier League eventually closed what they saw as a loophole to financial regulations by limiting the time a fee could be amortised to five years.

Under this plan, any players who did not progress could be moved on to a wider range of clubs because they would not be on huge wages.

And so, their assault on the market began in earnest.

They broke the British transfer record twice in little more than six months, first signing Enzo Fernández from Benfica for £106.8m before parting with £115m for Brighton & Hove Albion‘s Moisés Caicedo. Both players occupy the same position in central midfield: Fernández signed an eight-and-a-half-year deal, Caicedo an eight-year contract with an option for a ninth season. Mudryk and Benoît Badiashile signed for eight years, Romeo Lavia for seven, and more recently Neto and Félix signed seven-year deals.

Sources close to Clearlake argue that these deals are evidence of their policy working as intended. The average Premier League wage is £72,000 a week. Chelsea’s is now around £60,000 a week thanks to their change in approach. One source added that this £60k figure is down from around £200,000 a week, which they inherited from the previous ownership.

Then there’s Estêvão and Kendry Páez. The two teenagers from Brazil and Ecuador, respectively, who will join the club in 2025 are talents coveted by Europe’s leading clubs, and their signings seen as a major coup for the club.

Some of their recruitment has been more luck than judgement, however. ESPN has previously reported how Chelsea only signed Palmer last summer after moves for Michael Olise, then of Crystal Palace, and Mohammed Kudus, then of Ajax, had faltered.

Two points of contention arise from this strategy, however.

Firstly, any player not offered a long-term deal will immediately feel undervalued. Consider, for example, what played out with Gallagher: Sources have told ESPN that the England midfielder rejected three contract offers — one last summer, another in June and a third in July — but the longest proposal he was given was for two years with the option for a third. Those sources added that his pay would have been competitive, but the contract length was a reflection that he was not viewed as a key member of the squad — especially with fellow central midfielders Caicedo, Fernández and Lavia all signed through at least 2030.

Secondly, the pressure these long-term deals place on the manager is immense. He is, undeniably, the most expendable and interchangeable element of this model. Mauricio Pochettino was given a two-year contract and parted company with the club after one season. Sources cited frustrations in working within the current operating model, echoing what one source said about Tuchel’s brief, tense time working under Boehly/Clearlake.

Perhaps learning from the instability a short-term deal can create, Maresca was handed a five-year contract. The Italian knew what he was signing up for, taking a hard line in creating the “bomb squad” to ensure the football and finance departments were aligned through a turbulent summer.

One other element that may contribute to this overall shift in strategy has been the dynamic behind the scenes between Boehly and Clearlake.

Sources close to Chelsea have consistently and strenuously denied any breakdown in relationship, but other sources suggest Boehly and Eghbali are nowhere near as close as when the takeover was completed. Sources say Boehly has taken a step back from the day-to-day management, with Eghbali now seen as the most influential figure at an executive level. The pair were pictured together in discussion in Eghbali’s box at Chelsea’s opening weekend defeat to Manchester City.

A source close to Clearlake told ESPN that they have indeed become more active since the first summer of ownership but their role has never fundamentally changed and is in line with other investments in which they are majority shareholders. The source added that while Clearlake view owning Chelsea as a privilege, they prefer to operate by keeping a low profile. Boehly also still has sign off on every big decision and nothing within the partnership is impacting the way the club functions and operates.

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Chelsea have undoubtedly ruffled feathers with this approach to squad management, but some are also questioning whether they have broken the rules.

“They make a mockery of the system which has been put in place to limit spending,” said the scout for a club in a Big Five European league. “If you’re wealthy enough, you can do as you wish.”

PSR rules dictate Premier League clubs cannot post a loss of more than £105m over a three-year period.

Chelsea announced a £89.9m loss in the year ending June 30, 2023, but that figure would have been £166.4m without the sale of two hotels to a sister company — from Chelsea FC Holdings Ltd to Blueco 22 Properties Ltd. Both companies are subsidiaries of Blueco 22 Ltd, Chelsea’s holding company.

The Premier League voted against preventing such sales in June, but they are yet to be determined as “fair market value” under the league’s associated-party transactions rules. UEFA, however, who have their own Financial Fair Play (FFP) regulations, currently ban this type of transaction. A source told ESPN that UEFA believe Chelsea would have been sanctioned under FFP rules had they qualified for European competition last season.

A source close to Clearlake told ESPN that they are confident of complying with PSR for 2024-25 as well as the previous two years. The source denied reports Chelsea were looking to sell the training ground and suggested that the hotel deals in question had been cleared after assessment for fair market value.

UEFA’s new “football earnings” regulation states clubs can book losses of just €40m over the 2022-23 and 2023-24 seasons. Combined with a £121m pre-tax loss in 2021-22, Chelsea would appear up against it — to say the least — in satisfying PSR and FFP rules, yet sources close to Clearlake Capital insist that they are “fully compliant” with PSR for 2023-24. The transfers of academy graduates — including Gallagher and Ian Maatsen — will help, and losing popular players like this is not a problem exclusive to Chelsea.

PSR rules dictate the departures of homegrown players count as pure profit on the balance sheet, and that led to many clubs cashing in this summer. Arsenal raised funds from the exits of academy graduates Eddie Nketiah and Emile Smith Rowe, while Scott McTominay, who joined Manchester United at age 5, left for Napoli.

While Chelsea’s owners are conducting business unlike their rivals, though, many working in the game are cynical about the extent to which they work the system.

On transfer deadline day, L’Equipe reported that Chelsea were close to transferring Brazilian striker Deivid Washington — whom they signed for €17m last year and had played just 28 minutes for them — to fellow BlueCo club Strasbourg for a little more than €21m. However, a source close to Clearlake told ESPN that Strasbourg only enquired about Washington on loan and no permanent deal was discussed because Chelsea were not interested. The Blues had concerns Washington would not play regularly at Strasbourg and so a deal fell through. Strasbourg had previously loaned Petrovic and Caleb Wiley from Chelsea. But the source added that while Diego Moreira made the same move on a permanent basis, he was transferred at “book value” with Chelsea not making a profit on that transfer.

Multi-club ownership is nothing new — Manchester City are one of 13 clubs in which the City Football Group have a controlling stake — and UEFA research from 2023 suggested 180 clubs worldwide were part of a multi-club structure. Assessing fair market value and legitimate interest in players moving within one group is open to interpretation, however.

And outgoing transfers are a key part of the business plan. Much is made of Chelsea’s £1.2bn expenditure on players but the club have raised more than £500m in player sales. Chelsea spent around £220m in the window just passed but a source close to Clearlake told ESPN they expect to end with a net spend of around zero, including loan fees, once all the transfer windows close across the world. It is still possible that moves could be found for Chilwell, Washington, David Datro Fofana, Harvey Vale and Alex Matos.

Were they to achieve a net spend of around zero, that would put Chelsea approximately 14th in the Premier League for spending this summer.

Ângelo Gabriel joined Saudi Pro League side Al Nassr on Monday for a fee in the region of €23m. Chelsea signed the teenager from Santos last summer for a reported €15m, and he spent the subsequent campaign on loan at Strasbourg. He never played a minute for Chelsea. A source close to Clearlake told ESPN that Gabriel had offers from a Champions League club in the Netherlands and a Europa League club in Portugal but chose Saudi Arabia not just for a lucrative payday but in part because of the number of Brazilians in the league and the chance to play with Cristiano Ronaldo.

It should be noted that other clubs have also moved on players who’d never appeared for the first team: Newcastle United signed Yankuba Minteh from Odense Boldklub for around €7m in June 2023, sent him on loan to Feyenoord and then transferred him to Brighton this summer for £30m.

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So what happens next? Stability now is paramount. Sources close to Clearlake insist that the sheer volume of transfer transactions will settle down. This squad needs time to jell and grow under Maresca, who sources suggest has been given a soft target of returning the club to the Champions League, by means of a top-four finish in the Premier League or a win in one of the domestic cup competitions.

Sources close to Clearlake cite Real Madrid’s semifinal win over Bayern Munich last season as a moment some staff realised the Boehly/Clearlake regime understand the sport they have entered. After Joselu scored twice in the final three minutes to secure a dramatic aggregate win for Madrid, Eghbali texted an associate to say: “We need Champions League football in our lives.”

Ultimately, like with any recruitment model, Chelsea have to hope their judgement is sound. For example, despite Félix’s indifferent spell on loan in 2023 — four goals from 20 appearances — and Sancho’s travails at United, the club’s data analysis determined that both are more likely to reach a higher level than Sterling, who is of a similar profile.

Maresca has taken a harder line than Potter did with Chelsea’s outcasts. Whereas Potter tried to appease those on the periphery, Maresca split the group to focus on the 25 players that were part of his plans, leaving the others in no uncertain terms about their situation.

A source close to Clearlake told ESPN that they believe a large part of the clean-up required in terms of excessive contracts for players with little to no residual transfer value has been completed. There is a strong belief that while overhauling the club’s wage structure has been a difficult process, the club are now in a good place moving forward, not least with the proposed alterations to PSR rules which will place greater emphasis on player and staff salaries.

There is excitement, too, about Maresca, who sources say has impressed the players in his opening weeks with the quality of his training sessions.

In the end, whatever mistakes are made, Chelsea’s owners expect the value of their asset to increase over time. Should they wish to sell the club one day, the seemingly inexorable growth of the Premier League as a global product would facilitate a profit on their investment.

“Financial investors behave like financial investors,” one figure in the football business world told ESPN. “The strategy at Chelsea can be compared to the one of stock market superstar Cathie Wood. She buys and buys and buys tech, and if her fund corrects downwards, she buys even more.

“All the purchases are bets, huge bets. Wood has a worldwide following and enjoys the trust of the ‘smart money,’ even though her fund tends to perform worse than the overall market. It’s the same for Chelsea. The investors are happy and believe that one day they’ll get their investments back multiple times.”

Chelsea are determined to succeed on their own terms. The difficult departures of Sterling and Gallagher are viewed internally as bumps in the road to assembling a squad ready to return to their old status of serial winners. Their chosen route will continue to captivate, no matter the outcome.