The biggest problem with Chelsea's manic January spending spree wasn't the sheer sum of money. It wasn't the British-record $130 million paid for Enzo Fernandez or the $385 million splashed on transfers in total, if add-ons materialize. It wasn't even that the stunning outlay could run afoul of financial rules imposed by the Premier League or UEFA.
Chelsea's problem is that, even with $600-plus million worth of players joining since the summer, its team is still frighteningly mediocre.
The Blues have won just one game and scored just four goals in 2023. They've won zero and scored only one in five games since January. After a 2-0 loss at Tottenham on Sunday, they sit in a tie for 10th place, with a negative goal differential, closer to the bottom of the Premier League than to its top four.
They are, therefore, staring down a 2023-24 season without any sort of European competition to contest, and that is where the future gets ominous; that is where problems will arise.
It is foolish to pass judgement on Fernandez and his fellow new recruits after one month. It's similarly unfair to conclude that all of the summer signings are flops. Several are young. All need time to jell. And besides, the past two months have been deceptive. One set of underlying numbers suggests that Chelsea has actually been a top-five EPL side since Jan. 1. Injuries, poor finishing and rotten luck have doomed them.
The trouble with their short-term futility, though, is a medium-term revenue shortfall that could leave Chelsea scrambling to comply with those aforementioned rules — and specifically the Financial Fair Play (FFP) limits maintained by European soccer's governing body, UEFA.
FFP caps spending on player transfers and salaries, with each club's cap a function of its income. Thanks to complicated amortization rules, most experts have calculated that Chelsea should be able to comply with FFP for now, in large part thanks to the roughly $600 million in revenue that it brought in last season. But as the popular Swiss Ramble blog concluded in a comprehensive breakdown of the club's finances even before the Fernandez purchase: "If they fail to qualify for the Champions League, then all bets are off."
After the Fernandez purchase, the conclusion was stronger: "If Chelsea fail to qualify for the Champions League, this would make it very difficult for them to make their FFP calculations add up."
In spending well over $600 million, Chelsea, led by new American owner Todd Boehly, seemed to count on its annual Champions League windfalls continuing. All Champions League participants receive tens of millions of euros from UEFA in prize money, and the four English clubs who qualify each year often get upward of $100 million.
But if Chelsea fails to finish in the EPL's top four — it is now 14 points behind Tottenham, with five teams in between them and 14 games remaining — it won't get that windfall.
If it finishes fifth or sixth, it could receive a few dozen million euros from the Europa League, or a much smaller payout from the third-tier Conference League if it finishes seventh. But even those outcomes could have cascading effects on Chelsea's future.
Every single one of its revenue streams would get shallower. It would lose out on bonuses in current sponsorship contracts and become less attractive to prospective sponsors. It would play fewer games and lose out on significant matchday income. It would receive a smaller share of Premier League TV money, in addition to the diminished or non-existent UEFA payout.
And it would become even more desperate to offload players. With a bloated squad and wage bill, Chelsea will have to sell this summer and beyond. Its problem, in this department, is that other clubs know this. Potential buyers will have all the leverage. Final fees for the likes of Hakim Ziyech and Christian Pulisic will likely be lower than expected.
Each of these underwhelming returns essentially lowers Chelsea's spending cap. It restricts future business. But of course, loads of money has already been spent. So the club, to avoid violations, could be forced to sell even more players, including those it would otherwise prefer to keep. (Or it could simply accept that it will likely run afoul of the rules, and hope the penalties are fines rather than sporting sanctions.)
There is also the broader concern that many of the players already introduced at Stamford Bridge aren't actually that good. With Boehly seemingly in charge despite his utter lack of soccer knowledge, the Blues spent inordinate amounts on unremarkable players like Marc Cucurella. And they failed to address their biggest shortcoming, their toothlessness in front of goal. They have now scored less than a goal per game this Premier League season, yet they spent over $200 million on two players — Fernandez and Mykhailo Mudryk — who had scored a combined 16 senior career goals in Portugal and Ukraine.
As a team, they will surely improve. But in every sense, in the near term and long term, on the field and on the balance sheet, they are a mess.