The Roman Empire 2.0
Words by Joe Tweedie
When Roman Abramovich arrived at Stamford Bridge in June 2003, the football landscape changed forever. With significant investment from the owner, Chelsea were catapulted to the top table of European football. Fourteen years later the success has been astronomical: Chelsea have won five Premier Leagues, four FA Cups, three League Cups, the Europa League and the Champions League. Even with the much discussed hiring/firing policy, the twelve managerial appointments (encompassing ten different managers) have averaged a trophy a season. By comparison Manchester City have currently won five trophies in nine years.
In the 2011/12 season, fearful of European club debt spiralling out of control, UEFA began to implement a set of financial regulations under the banner of Financial Fair Play (FFP). FFP was introduced to essentially stop clubs from spending more than they earn. There were obvious ramifications for Chelsea and Abramovich; Chelsea would need to aim for self-sufficiency. Unquestionably, the club have taken the guidelines seriously: investing as much as they can within the financial constraints imposed on them. Crucially, the ability for the owner to invest was inhibited.
These restrictions have led to something resembling a “one in, one out” transfer policy. Big player sales now fund other purchases, with this trend beginning to emerge around 2013/14. There are two main issues when looking at this transfer strategy: (1) you are selling quality to hopefully bring in quality, instead of adding quality to existing quality and (2) the fact you are selling quality means the replacements have to be just as good or better for it to make sense. On balance, this does not feel like a long-term strategy that will return Chelsea to Europe’s elite. It feels like a situation where it is difficult to improve the overall squad and it requires the club to bat a thousand on every transfer.
State of Play
Chelsea FC plc recently announced a £15.3m profit for the year ended 30th June 2017. The importance of needing regular Champions League football was underlined by the fact the club actually posted an operating loss. This loss was eventually offset by “player trading”. With notable commercial deals kicking in over the next financial year, plus a return to European football, Chelsea’s revenues should grow once again. There is a slight red flag lurking in terms of our reliance on “player trading” to boost profits, but this has been the case for a number of years now. Assuming John Terry’s parting words about Chelsea needing “five or six big signings” still ring true, who do Chelsea sell this summer to help fund the necessary purchases? Eden Hazard? Thibaut Courtois?
The present model at Chelsea has undeniably worked throughout Abramovich’s tenure. Many fans will be happy to continue walking down the same path. However, there are natural conclusions to every cycle within football and at Chelsea I believe we are looking at one. In years gone by, Chelsea were at least in the conversation when top players were moving: now that rarely appears to be the case. This may be due to a perceived “austerity programme” at the club (tell us how you really feel, Antonio!!!). In the rare case that Chelsea are a leading candidate for a top player (i.e. Alex Sandro), there appears to be an inability to conclude the deal. For a club who are happy to receive grossly inflated transfer fees, it seems peculiar that Chelsea expect to pay mark-to-model fees as opposed to mark-to-market. If Kyle Walker is a £50m player, then Alex Sandro is conceivably a £60m-£70m player; that is how a marketplace operates.
When benchmarking Chelsea’s current standing in football, it has to be done against the very best – this generally equates to how well Chelsea perform in Europe. So many people automatically throw out the “but Chelsea won the league just last season…” line without context, in an effort to crush any alternative perspective. No one is downplaying the achievements of Antonio Conte in winning a league title, but ignoring two considerable advantages which no longer exist builds a false equivalence:
1. Chelsea were only playing once a week, enabling the entire 1st XI to be fresh for virtually every Premier League game;
2. Conte’s shift to a back three completely bamboozled opponents until everyone started adopting it.
Conte has also stated that many players were playing well above their natural level (“120% each game”), so any reversion to the mean was inevitably going to see a dip in form. Now we are back in Europe and playing twice a week, the reality of where we are as a club is a bit clearer to identify.
Chelsea are well placed in the Premier League (3rd), into the semifinals of the League Cup, have an FA Cup replay with Norwich on the horizon and of course are into the Round of 16 in the Champions League. There are those at the club and of course fans who are delighted with this. My quandary is that this is a very simplistic take on current proceedings. A basic look beyond the veneer would show that Chelsea are fifteen points worse off in like-for-like Premier League games from last season. Equally, there are questions to be asked about finishing second in a Champions League group Chelsea were comfortably dominating at 2-0 up against Roma in October. After the tepid performance at Norwich in the FA Cup, with a side that featured nine internationals, do we even have the luxury of resting key players? To promote some semblance of sustainable success, you cannot ignore the process.
Just to illustrate this point about our the reality of our current level, I refer to the UEFA Club Coefficient Rankings, European Club Association Index and Euro Club Index. Chelsea are currently 12th in the UEFA rankings for club competitions. In the European Club Association Index Chelsea are ranked 10th. The Euro Club Index (use the drop down for historical detail) shows a gradual decline from being ranked 1st in 2007 to 8th as of 7th January 2018. All three individual ranking systems show a gradual decline in Chelsea’s performances and perception in European football. This is not to be overtly negative – more of a point to suggest that simply relying on our league position is not necessarily a reflection on where I would imagine the club wants to be.
Importantly this performance based ranking tallies up with the financial side of the game as well. While many shrug their shoulders at any mention of football finance, there is an embedded correlation between all those Excel spreadsheets and how much a football club can spend. Using KPMG’s “enterprise value 1” from their excellent Football Clubs‘ Valuation: The European Elite 2017 as a metric, Chelsea rank 7th in Europe. Although, with Liverpool (bigger stadium), Juventus, Tottenham (new stadium) and Paris Saint-Germain just behind us the gap could be smaller in a few years.
Dr. Tom Markham, a specialist in football finance said in 2015 that Chelsea’s “match-day revenue is currently only a little over half of Manchester United and Arsenal.” Dr. Markham pointed out that “what is limiting Chelsea’s value [is] the need for a new stadium or a major revamp of Stamford Bridge.” With Tottenham’s new ground looming, Liverpool already expanding and the continual backing Manchester City will receive, we are going to find it tougher to attract players due to increased financial competition. Those we have taken for granted will soon be able to compete with us financially, and this is without looking at the elite tier of clubs in Europe. The more money we make, the more we can invest in the squad. The more others make, you get the picture.
The sad reality is that Stamford Bridge’s current capacity of 41,663 is going to make it trickier for the club to compete with domestic rivals in the near future. It is clear why the club are desperate to push through and make inroads on the 60,000 capacity ground. If these extra seats were occupied for a Premier League game where our cheapest ticket is £47, that amounts to an additional £16.4m per season. Given a large percentage of these new seats are earmarked for corporate status, you can see that figure growing. While there will be a continuing pressure on Chelsea’s commercial pursuits, this will be eased somewhat by having the stadium to help drive revenue.
Any advantage Chelsea have enjoyed from being financially dominant in the mid-2000s has ended. The pursuit of success via constant short-term refinement has produced some wonderful results and memories. However, a few months removed from winning the title many fans are looking at the current squad, impending palpable discord and erratic performances and asking is this progress? Or even worse, looking around the current squad and thinking where is the next catalyst going to come from? Are we only able to compete domestically without the burden of European football?
So what is the answer? Do we keep plundering along the same path that may produce the odd trophy in the future, but is tangibly reducing the quality of the playing squad? Or should we look at a new direction that could set the club up for long-term success? I think this starts with an acknowledgement that Chelsea need to take a step backwards (or at the very least take a deep breath) to move forwards. Given the current state of the Premier League, this does not necessarily mean a drop in standards when it comes to competing for the title. It just allows the club to set a foundation which can be built upon year-on-year. When Mourinho won the Premier League in 2014/15, Chelsea finished 10th the following season; there was no progression or transition to becoming a better side. Likewise, Conte cantered to the Premier League last season and Chelsea are now sixteen points adrift of the league leaders. What is the long-term plan? To occasionally challenge for the Premier League when all the stars align?
The obvious elephant in the room is that Chelsea change managers regularly. How can any manager have a long-term picture in their head when effectively they are only looking as far ahead as the next week? This would be the first thing the club need to address. An agent I know through Chelsea summed the current uncertainty around Conte’s managerial tenure neatly: “no big player(s) will sign [for Chelsea] until they know who the manager is going to be next season. I don’t blame them. Why [would an agent] risk losing a client because of a club’s inability to plan even remotely long-term?”. Summer transfers of the magnitude Chelsea fans would like take months of discussion to come to fruition. Typically these initial feelers are sent out in February for a summer move. If there is so much uncertainty around the manager, are we even going to be having these conversations? Is our instability now finally catching up with us in such an Agent driven world?
A different way of moving forward looks at the transient nature of the managerial position and questions whether it make sense to place every single footballing decision in the hands of a head coach. Chelsea managers, on average, see just over two-years at the club. With so much literature suggesting that it takes 3-4 years to implement a sporting philosophy, what is a coach meant to achieve in that period of time? Chelsea paid £13.2m to bring André Villas-Boas to Stamford Bridge to enact his Barcelona-lite ideas that worked beautifully with Porto. Within 15-months of AVB’s departure, Chelsea hired José Mourinho. At the time of hiring Villas-Boas, Chelsea spent an unprecedented amount of effort and compensation to secure the Portuguese manager. The clear remit was to drastically transform the club. Despite all that effort, they abandoned the direction to permanently hire someone who remains the antithesis of that style of football. It was also during this time that Chelsea’s chaotic approach delivered a Champions League and FA Cup (while finishing 6th in the Premier League) and then subsequently the embarrassment of being the first holders to fail to make it out of the group stages. Oh, and we did the unthinkable and hired Rafael Benítez.
Just think about the lack of a coherent overarching strategy for one moment. Manager A loves a certain type of player – he wants a team filled with small, creative and technical footballers. He wants to play possession football, press high and defend with a high line. The club go and make a number of signings to fit this mould while simultaneously getting rid of certain players who no longer fit this profile. For whatever reason Manager A does not work out after a year and Manager B is hired. Manager B loves physical players, power and prefers a more direct style of football. Manager A sold two players who Manager B could really have used. Manager B now needs to sell as many of these small and technical players as possible to fund transfers for the robust players he likes. While this is all happening an Academy player who would have been perfect for Manager A no longer fits the bill and ends up lost in the Championship somewhere. In fact, barely any Academy players fit the profile Manager B wants so he demands even more additions to his squad. Manager B is sacked 18-months later and Manager C enters the picture. Manager C is a bit of Manager A and a bit of Manager B, but needs at least four key signings to make things work. But now Manager A and B have spent so much money that Manager C needs to consider selling some of his best players to get his additions. Does he keep the superstar player or bring in four okay-to-good players? Lather, rinse, repeat.
Looking at something called Concept Football, as defined by Spielverlagerung “means that a certain concept is behind the signing of player types and the development of a team. The front office sets a philosophy in advance that influences all aspects.” My suggestion would be to establish a world class Football Board that safeguard the philosophical direction of the club. They look at everything from the Academy system right through to the First Team – asking key questions such as ‘what kind of footballers do we want to produce?’ and ‘what system or style of football do we want to see?’. Naturally, this would require some serious thought and investment, but it would set the club up with an actionable 4-5 year plan without the deviation variable of multiple managerial inputs. Instead of looking for a manager to come and set the direction of the club, the club has a direction and alternatively looks for a manager who can enact it. This would require an excellent Director of Football and for that person to be surrounded by highly talented football people.
Letting a manager ‘get on with it’ is no longer a realistic proposition. For all Conte’s positives, his propensity for highly experienced players is at odds with the direction Premier League football appears to be going. Manchester City are playing the game at a greater pace with more technique than we have seen in ages. Would adding multiple players in their 30s close this gap or burden us with multiple unfavourable contracts if Conte leaves the club? Likewise, when Mourinho had a lot of say over transfers he signed off on the permanent departures of Kevin De Bruyne, Romelu Lukaku and Mohamed Salah. I no longer think the approach of “give the manager what he wants” works, particularly when we seem to hire managers opposed to the direction the club are heading. Since 2011/12 around 70% of our transfers in to the club have been aged 25 or under. So why hire a coach who openly likes experienced players? This tension between Conte and the board was surely going to happen at some point? Sometimes it feels like we simply go for the flavour of the month without really considering the fit.
The Chelsea Model
“Ajax-on-the-Thames” – many moons ago, when Glenn Hoddle kick started the revolution that would culminate in the Chelsea we know today, he had a concept of repositioning Chelsea as “Ajax-on-the-Thames”. Over twenty-years on from this vision, Chelsea have one of the finest academies in world football. However, the pathway to the First Team from the Academy is an incredibly difficult one to tread. The Academy currently will often replicate the tactics used by the First Team – although often in a more attack-minded manner. Executing this Ajax-on-the-Thames strategy would require a slight deviation from our current plan. Whereas Chelsea will often just look to create the best version of a player, whatever that may be, this can often leave them without a distinct position that is easily translatable from Academy football to the First Team. If the club have a more defined approach in terms of system, i.e. both Ajax and Barcelona rigidly taught the principles of 4-3-3 throughout De Toekomst and La Masia, I feel this would hugely benefit all parties. This “Chelsea DNA” would encourage “recognisable; attractive; offensive-minded, creative [and] fast football […] far away from their own goal high up on the opponent’s half 2”.
This means that someone playing as the number 6 (the holding player) at Academy level is being trained in precisely the same manner as the player occupying that role in the First Team. At the moment the element of luck seems far too great in determining who gets an opportunity from the Academy. We have had managers who really like number tens, managers who play without them, those who like box-to-box midfielders, those who play without them, those who like holding midfielders and those who play without them. How can we expect to produce First Team ready players if the goalposts are continually moving regarding what sort of players should be produced? We may be in a position where Mason Mount is without a position in the First Team because of this 3-4-3 system, but is someone who might have been perfect for a manager who played 4-2-3-1. These margins are rarely seen when it comes to the production of First Team players. However, if we go to this prescirbed philosophy the Academy know that they have a five year window before we make refinements. This is ample time to coach a player into a specific role from U13s to U18s.
As an example the Football Board would have a set number of criteria that they would like to see from their number 6 and this careful structure is replicated throughout the entire club. The transition for a talented Academy player into the First Team is lessened somewhat because the tactical and positional instructions they are receiving mirror those of the First Team precisely. While I do enjoy the multi-positional approach the Academy takes presently, would we be better served by defining the position for someone and working with every intention to graduate them into a First Team squad member in that role? I often feel like the versatility our young players have can count against them (Ruben Loftus-Cheek played in virtually every midfield role imaginable and excelled, but would he have been better served just playing one?).
Away from the Academy this also simplifies the transfer structure at the First Team level. We may, for example, say we want to play a 4-3-3 with inverted wingers. As such, this focuses the type of player we want to see playing from the right. Add on a few attributes – electric pace, great dribbling, ability to shoot, creativity etc., and you can start to build a profile of players we need. There are obvious caveats that would be built into defining the playing style of the club – we are not looking for complete rigid adherence to doctrine. However, the subtle changes in style would be secondary attributes you would encompass in your player analysis. Can this centre back, who perfectly fits what we are looking for, operate as part of a back three? Can this left back also operate as a wing back? The clear benefit of the club setting the tactical structure at the club is that it remains unaffected by the managerial upheaval that goes hand-in-hand with Premier League football. The direction remains clear and steadfast, regardless of the coach in charge. There is a clear focal point of the philosophy and the stewardship of the direction. Everything is aligned and there are clear indicators for both the Academy and First Team level. We can start to focus development with a set window of time in mind and maybe produce more First Team ready players out of the gate.
Academy pipeline as a cornerstone of the strategic direction – a few caveats before I start. No one (at least no one I speak to regularly) is suggesting that we drop the entire First Team squad and play the U18s in every single league game. I often feel that those opposed to using the Academy take this as their starting point and as such any conversation about the Academy can never happen. I think from those I speak with regularly, what most would like to see is a pipeline created that enables Academy graduates to become successful First Team squad members. We will hopefully produce the occasional gem (Andreas Christensen), as well as some great First Team players and rotational options (like Jesse Lingard at Manchester United). Creating a core of Academy players firstly reduces the need to invest significant money on squad depth. Could we have converted the money spent on Danny Drinkwater, Tiemoué Bakayoko, Davide Zappacosta and Ross Barkley (~£130m) into a world class wing back and top midfield prospect?
The idea being that we establish a group of Academy players who are can contribute over a five year period. The gems (maybe we find three players in total) form a core that would be supplemented by a continual pipeline of Academy graduates. These graduates may want regular First Team football, so after say 2-3 years in the squad they can fetch a Nathan Aké sized transfer fee at 23/24 years of age. Once they are sold, theoretically the next batch of players are ready to take over their rotational role. So you create a clear pathway for Academy players to feature, develop and hopefully take their opportunity. We should be able to find some starters and squad players given the quality of our Academy. Financially, it makes absolute sense to use the Academy in this manner. If Chelsea can afford to invest £100m-£150m a season into top talent without player sales, surely this is the future?
Assuming Chelsea establish a philosophical direction and we are seeing players trained exclusively to fill roles within the First Team, we could create a goal of seeing 2-3 players graduate into the First Team squad every 2 seasons. In this five year window you could see 4-6 players being used frequently, with the hope being some drastically kick-on and fulfil their immense potential. In the worse case this could purely be someone who rotates and provides depth and is eventually sold. Our player development is so good, yet we cannot seemingly convert this into something that makes total business sense. Imagine a world where Chelsea only needed to target elite U25s and world class talent every summer. It might be quite idealistic, but if the club make it a focal point it is certainly achievable. In essence we follow the Borussia Dortmund model from Germany, but applying it to Chelsea’s superior Academy and resources.
I would like Chelsea to be in a position where they do not need to continually invest large sums of money on depth signings. This strategy, although aggressive, would enable Chelsea to reach a point where a squad depth signing was made purely to fill a hole. In reality it would allow us to concentrate our efforts of buying players who unequivocally improve the First Team. There would still be a continuation of the current Loan Army strategy, but hopefully one that is far more targeted at producing players capable of contributing to the First Team squad. Introducing a meritocratic approach to opportunities will be crucial, but equally manufacturing chances will also become a focal point. After watching yet another match this season where nine internationals played and looked like the game was beneath them, perhaps fans should stop with the “if they are good enough, they will get a chance” stuff. It patently does not happen at Chelsea as things stand. It took us not signing another centre half, two consecutive red cards and a complete falling out between Luiz and Conte for Christensen to get a look-in. Even after he played superbly well and was dropped, he still had to jump through multiple hoops to establish himself. Do signings needs to go through the same process? I rest my case.
Transfer strategy overhaul (the occasional needs must…) – I mentioned earlier that almost 70% of Chelsea’s recent transfers have been for players 25-or-under. This is certainly a trend that should become more formal, but equally one that needs refining. If I am Chelsea’s Football Board and I need to be mindful of resale value as part of the new modern way of football thinking, this becomes something I embed into the footballing philosophy without a second thought. As a continuation of the previous themes, I should no longer need to worry about signing okay players. To illustrate my point how many of the following have made a massive impression since signing?
Chelsea's last 25 signings :— Nawaz. (@BlueNawaz) January 7, 2018
Pato, Pedro, Amelia, Baba Rahman, Begovic, Kenedy, Falcao, Hector, Miazga, Nathan, Djiloboji, Pantic, Cuadrado, Kante, Luiz, Alonso, Batshuayi, Eduardo, Bakayoko, Zappacosta, Drinkwater, Rudiger, Morata, Caballero, Barkley.
My focus would be split into two streams: (1) buying the top U25s available and (2) buying genuine elite level players who instantly upgrade the team. Part one is simple and would just involve less buys like Nathan and Wallace, with a view to compete for the likes of Corentin Tolisso, Leon Goretzka, Samuel Umtiti etc. We target the upper echelon of U25 talent, so either those who look to have supreme potential or those starting to fulfil their promise at an early age. The second part of that equation shifts our focus to target genuinely elite talents. There is less emphasis on potential and resale here, and more importance placed on a 2-3 year window. It could be that we want to go and grab a top centre forward – the only focus should be on getting him, regardless of the price. If all the previous steps have taken care of themselves and there is sufficient depth and an existing baseline of talent to work with, then we can enter the £90m+ stakes for players.
Managerial matters and other bits… – perhaps the biggest change required is finding a head coach who works seamlessly with the direction the club are heading in. Antonio Conte has been an excellent manager, but his relationship with the board appears to be untenable. I also do not believe that just giving him the experienced players he wanted would have catapulted Chelsea back towards the summit of English and European football. The frustrating thing will be that for a coach who has made a competent wing back out of an eternal journeyman, developed a right back into a top centre back and improved Kanté immeasurably, Conte has never really taken the same approach with the young talent at his disposal. Someone like Dujon Sterling has all the athletic traits you could wish for in a right wing back, as well as being blessed with excellent technique. Potentially there is a top tier full-back/wing-back/winger in there. While Sterling has played a total of 15-minutes of First Team football this season, Davide Zappacosta has played 1,298 (or 98 minutes more than the entirety of Ruben Loftus-Cheek’s three seasons as part of Chelsea’s squad).
If Conte does leave at the end of the season, then Chelsea must use this as an opportunity to bring in a coach that actually fits their philosophy. Even if they do not go as far as to what I am suggesting, Chelsea have a clear preference to buy and develop younger talent. So someone being brought in with a track record of doing so should be considered. We cannot be in a position where a manager wants experienced players with the club looking towards younger talent. I would also make sure that there is someone with a connection to the club on the coaching staff at all times. Joe Edwards or Jody Morris have achieved enough with the younger age groups to suggest that they are both excellent coaches and developers of young talent. Having them in a position where they are coaching, developing and being listened to when it comes to bridging a gap between the Academy and First Team would be an important step in the right direction.
A slightly more controversial call for the traditionalists amongst us is that I would exclusively use the FA Cup and League Cup as developmental competitions. We typically have seven domestic cup games a season and invariably we draw one absolutely dross side in Europe. That is 810 minutes of available football which could be used to blood new talent. Maybe in Europe you drop a handful in, but in the FA Cup and League Cup make it a dominant feature. Given the general performance levels by the experienced internationals we have played this season, at least we will see some effort. My focus would be exclusively on maximising the performance levels of key players in the Premier League and Champions League.
Ultimately we operate in a different world now: while this certainly is not a woe is me!!! moment, Chelsea do need to adapt to these conditions. PSG and City can afford to spend money on a level we have never seen before. Barcelona are now regularly dropping over £100m on individual players. Real Madrid appear to be ready to launch an outrageous spending spree. United can spend big every summer. Bayern just vacuum up the best Bundesliga talent, without any real competition. If we think we are going to compete with these clubs by continuing along this one in, one out transfer policy I think we are in for a rude awakening. Say we had to sell Eden Hazard and Thibaut Courtois, are you entrusting the current regime to go and spend that money wisely?
A different model that utilises Chelsea’s conveyor belt of talent in a more pragmatic fashion feels like a way of overcoming the FFP constraints that have clearly limited us as a club. Allowing us to target the best players again is crucial in returning to the former levels we were at from 2004-2012. Not putting all our eggs into a managerial basket to deliver sustained success feels like an intelligent step in this direction, but it requires a lot of work on the Technical side of the boardroom. If the Football Board has the right constituents it should be able to drive a concerted effort to make Chelsea a consistently successful force over the next five years. Acting now, instead of waiting for even more financial gaps to close or open would be a great preemptive move.
Arsenal’s gradual decline should be a warning to all at Chelsea. How they have achieved this being one of the most cash rich football clubs on planet earth is impressive, but the lesson should be avoided. It only takes a few years of mismanagement to slip and unlike years gone by there are teams to pick up the slack. If we give teams an inch, they will take a mile. While the proposal seems extreme, it at least suggests a foundation that could generate success in the long-run. The current short-term thinking that surrounds the club must change. If we can do that, then by the time Stamford Bridge is redeveloped there is a real chance we not only kick on but kick on back to the European top table. Nail a philosophy that encourages only the best and when we have the capacity to spend silly sums, it should bear fruit.
1 KPMG, Football Clubs‘ Valuation: The European Elite 2017, 31st May 2017 → “the enterprise value (EV) of a company is calculated as the sum of the market value of the owners’ equity, plus total debt, less cash and cash equivalents. It indicates what the business is worth regardless of the capital structure used to finance its operations.”
2 Brian Boedker, The Legendary Ten: From Humble Beginnings to Big Business (2016)