The Reserves and the Revenue-Rich

[Dorset]

Official football club websites are all well and good, but you always know what you are getting and, more to the point, the club only feeds the fans what they want them to ‘get’, as opposed to what can be described as critical information on club matters in general that's best left unsaid. Okay, we may not be entitled to inner sanctum status, but a typical example of what I mean appeared the other day when Reserve team manager Steve Holland provided the following quote before last night’s game…

'It is up and down all the time,' Holland told the official Chelsea website on Tuesday. 'My group is three tiers. There is a core of four to six reserve players who have pretty much always been with me, who haven't been out on loan, then there is half a dozen youth players with me most of the time, but as soon as the FA Youth Cup kicks in go back to Dermot Drummy, and then at the top of the group I've got another six, the likes of which I have just mentioned, who are with Carlo more often than not, particularly when there are a couple of injuries like there have been in the last few weeks.’

Whilst putting flesh on the bare bones of this snippet of information is not hard to do, Steve’s incite isn’t exactly scoop of the year material, as only the diehard fan would ever put the whole lot into context by bracketing individual players into the respective groups. Consequently this piece falls all too easily into the ‘chatty insight with Steve’ category and is in complete contrast to the ‘cat out of the bag‘ interview he gave to Neil Barnett just before the game, which was not only off the cuff, but far more revealing and worthy of note.

Asked about team selection and the somewhat unusual positions for certain players in certain areas [right back for Jeffery Bruma and left midfield for Nemanja Matic], Steve breezed into an explanation that confirmed a direct instruction from ‘On High’ and that it was at Carlo’s specific request that these two be used there and not at the heart of the defence and holding midfield as per usual. Much more interesting than the put-the-names-together-for-yourself stuff on the website, this directive briefly opened the Pandora’s Box of transfer speculation for me, only for it to be instantly rammed shut again on the likes of Franck Ribery and Dani Alves. Too hasty a read of the situation, you may say, and in response I’d cite another hefty chunk of recent unacknowledged official CFC website news, namely the annual Deloitte Football Money League, published last week and containing a wealth of financial information on the biggest clubs in Europe…

In short, on their list of twenty revenue-rich clubs, Chelsea dropped one place to sixth. However, of more concern to the Chels-biased layman is the fact that, when you look at the three sources of revenue - match day, commercial and broadcasting - there appears to be little scope for recovery or improvement on our current [dropping] position. Hence it is all quiet on the official home website front when it comes to issues such as naming rights or the other perish-the-thought alternative, a move to a new ground with a higher crowd capacity. When you add to this the obvious need to keep principle costs (wages) under control as well, the prospect of the club sustaining, or even adding to, the highest salary levels, like those of JT and Lamps, seems not only unlikely, but unsupportable. Little wonder that Joe’s contract talks have stalled and Michael Ballack faces a pay cut if he wants to stay at the club.

With this stark reality in mind, can there really be a better time to put faces to those Steve Holland numbers than right now? I’d start by suggesting that the four to six static reserves are Carl Magnay, Nana Ofori-Twumasi, Ben Gordon, Jacopo Sala, Danny Philliskirk and Jan Sebek. Those half a dozen youth players are Josh McEachran, Gokan Tore, Nikki Ahamed, Kaby Djalo, Marko Mitrovic and Milan Lalkovic. And finally, the elite top of the group is presumably headed by Daniel Sturridge and Fabio Borini, swiftly followed by Jeffery Bruma, Sam Hutchinson and the bright prospects that could turn into shining stars, Gael Kakuta and Conor Clifford.

Lest we forget, this leaves the loanees, who must all be regarded as pretty much on the same level as the elite - Miroslav Stoch, Franco Di Santo, Scott Sinclair, Ryan Bertand, Patrick van Aanholt, Liam Bridcutt and Jack Cork - remembering that the notable omissions from this lot are Michael Woods, who has been blighted by injury and remains so, and Nemanja Matic, who has, quite frankly, been regarded [treated] like a first team squad member since his arrival and mention of his name brings us full circle in terms of this topic, as…

It would appear it’s a thumbs down to Franck and Dani coming to the Bridge this summer, an observation strengthened by the needs must approach in the Reserves and Deloitte’s findings that also see a re-evaluation of our hopes and requirements in the transfer market this summer. The accommodation of Matic in another area other than holding tells its own story, but I reckon it’s one of many recent signals that the club will rely heavily on its reserves in the seasons to come and that this current campaign is in effect a last hurrah for some big players who are destined to be the last of the big earners. To use another sport’s parlance, player-wise, we appear to have all bases covered, with the possible exception of a serial striker to ultimately replace Didier and/or Nico.

Whilst that last selfish plea from the heart may well fall on deaf ears in the boardroom, there is also a need for the moneymen to take into account the one aspect that applies to football more than any other sport - it is a squad game that always needs to be freshened up periodically should you be able to afford to do so. Therefore, putting the numbers together and counting up the loose change, maybe Roman could, perhaps should, push that boat out just one more time and haul in a big, young, goal scoring fish to last us until such time as the kids have thoroughly learnt their trade. That said, the pool isn’t overstocked at the moment, only Aguero or Pato spring to mind, and it will, almost of necessity in present circumstances, have to be a high-earning player plus cash deal to satisfy the accountants.

[Nibs]

It would appear it’s a thumbs down to Franck and Dani coming to the Bridge this summer, an observation strengthened by the needs must approach in the Reserves and Deloitte’s findings that also see a re-evaluation of our hopes and requirements in the transfer market this summer. The accommodation of Matic in another area other than holding tells its own story, but I reckon it’s one of many recent signals that the club will rely heavily on its reserves in the seasons to come and that this current campaign is in effect a last hurrah for some big players who are destined to be the last of the big earners. To use another sport’s parlance, player-wise, we appear to have all bases covered, with the possible exception of a serial striker to ultimately replace Didier and/or Nico.

Whilst that last selfish plea from the heart may well fall on deaf ears in the boardroom, there is also a need for the moneymen to take into account the one aspect that applies to football more than any other sport - it is a squad game that always needs to be freshened up periodically should you be able to afford to do so. Therefore, putting the numbers together and counting up the loose change, maybe Roman could, perhaps should, push that boat out just one more time and haul in a big, young, goal scoring fish to last us until such time as the kids have thoroughly learnt their trade. That said, the pool isn’t overstocked at the moment, only Aguero or Pato spring to mind, and it will, almost of necessity in present circumstances, have to be a high-earning player plus cash deal to satisfy the accountants.

Nice post Dorset and music to my ears.

I posted on one of the other threads that I hope for a large summer clear out and want to see a number of youngsters involved next season - with the only addition to the squad being an Aguero.

Be great if that's exactly what happens.

Edited March 11, 2010 by Nibs

[Barry Bridges]

Great thread.

As Ive been saying for a while, we need to start relying a LOT more on our youth setup in order to remain finiancially viable, especially if you consider the economic fairplay rules being introduced by EUFA.

We need to reorganize the wage structure, again a line I have touted, even if it means we miss out on resiging a few players (see JCole/Anelka).

I know a lot of people dont like Ballack siging a new deal, but from what I hear his base wage is being halved(from 120k-60k a week) with performance bonuses. This has to be the way for the future. Allow them comfortable salaries, but if they want to be paid like a super star, then no problem, just play like one. What you make above the base salary is 100% up to you, and if the club has to pay you more, thats most likely because of performances that will increase club revenue (prize money/marketing).

For the next few years the club needs to make sure that for whatever new salary is coming in, more is going out. We have a stable of youngsters who look promising, lets give them a chance and see if our setup is working or need futher retooling.

Theres no coincidence that the only big 4 clubs without ridiculous debt is us and Arsenal. Now we are debt free due to a billionaire owner, but where is the safety in that? People change their minds, and owners never last forever. Now there is Aresnal, who has over 200m debt, but dont forget thats pretty much 100% due to their new stadium, that is already helping to pay itself off. They just recently paid off a 3rd of their debt to the amount of over 120m, a large chunk coming fromt he redevelopment of the old grounds. The reason their not in the same position as pool/man u in terms of finiances, is down to 3 things IMO.

1) a reliance on their youth system and

2) a strict policy in regards to contracts for players over 30

3) transfer window frugaility...you buy what you NEED, not whats flashy! (and to be honest, if Arsenal had made a few more investments, their debt could be even lower due to prize monies.....Barca accumulated over 100m in revenue through the CL last year alone.)

This could possibley cost us a trophy or 2 in the up coming seasons, but I think thats an acceptable cost inorder to bring the club out of the deep red on an annual basis. If you disagree, I suggest you ask Portsmouth fans if they now think that FA cup was worth it.

but again, fantastic thread and something that we all need to keep in mind amid the excitment of watching games and competeing for trophies. Its not just a team.....it is a business too!

[Spiller86]

Interesting thoughts Dorset. Exceptionally well researched. Not entirely sure whether the issue of Bruma at left back isn't more to do with finding another option for left back for Inter allowing Malouda to go forward. That said the Matic issue throughs up more questions.

Barry on the other hand. I think your being a little alarmist. I think your assessment that it's best to go without a few trophys for a few years in order to ensure financial security, is out. We're not Portsmouth, our owner is a bit more dedicated to the club than Gaydamak. Why exactly would a man spend as much on the club as he has in the past 7 years, write most of it off last year, and then simply decide to walk out, leaving us in the lurch and him out of close to a billion dollars for nothing?

It's certainly the case that we could become more sustainable, after all we've been attempting to do that for quite a while now. But I think your suggestion that we cut Nicolas Anelka of all people, if his wage demands are too high is bordering on the ridiculous. The youth system is all well and good and from what I can see there are some quality prospects notably Bruma, Kakuta, Borini as well as others who could well make it at the top level. That said we don't have a great record at producing young talent, and although I'd like that to change, your assessment that we should lack ambition, cut top players if they demand large wages and rely on the youth system, is most likely to end up with us fighting just to hold on to a Champions League place. Something that if we missed out on would be a far greater issue re. operating losses than any current issue we have.

I'd agree with Dorset that there probably won't be any big ie. 20+ million signings this summer. But honestly I'd expect us again to attempt to add younger solid players who can contribute to the squad similar to what we did last summer. It's not all doom and gloom, cutting Ballack's wage by half is a start, keep the faith.

[Maverick]

My concern about the way the squad is currently shaped up is that there are a few passengers in our squad that we can replace with our reserves/ loaned players. There is no need to spend big bucks on players that are currently only a bit part player and it is on this front that I support the club's stance when it comes to contract talks with Joey. As a club we need to now stabilize ourselves and it could really pay rich dividends in the future.

I am delighted to see Carlo being involved in the Reserves games and having a say in switching players out of their natural position, whatever the thought maybe it looks very positive to me. Add to it the involvement of players like Borini and Kakuta in the cup games makes me believe that given the time we will see some of them making the cut. The topic starter failed to mention Mancienne in that post and to me he is as close as anyone to make it to the first team squad. He can play across the defence and doesn't really demand a ahigh wage.

[rahul]

Great post Dorset. Especially the insight you gave about Carlo's involvement in our youth, which is probably the first time a first team manager is taking such a keen interest in youth and reserves. Gives a strong indication that we are very serious about our youth policy and overall financial stability as a result.

The future looks bright!

[yorkleyblue]

..................... Steve’s incite isn’t exactly scoop of the year material, ...................................

Mr Pedantic strikes again!

Other than that, great post as usual Dorset

kev

[moi]

Mr Pedantic strikes again!

Other than that, great post as usual Dorset

kev

I don't remember marrying you????

Dorset, do you write for a living? Your posts are so well constructed and so interesting to read that I often find myself wondering if writing is your trade.

[Dorset]

I don't remember marrying you????

Dorset, do you write for a living? Your posts are so well constructed and so interesting to read that I often find myself wondering if writing is your trade.

Guilty as charged, moi, but these days my journalism is limited to one weekly column, which is no bad thing when you consider the errors currently creeping into my game - ‘incite’ indeed! - thank heavens kev spotted it and not Mike O …he would have had a field day!

Having dragged myself into this mood of contrition, I’ve now got to own up to missing Michael Mancienne’s loan move to Wolves (although it’s pretty clear that I hadn’t missed him that much) and, before anyone points out another glaring omission, apologies are due to Jacob, who should have got a name-mention as well. :( to the first one to provide his surname.

[moi]

Mellis?

I spotted incite too, but assumed you had one of these irritating american things that sometimes decides to change your typing to something which it assumes you mean when you don't mean that at all!

[Dorset]

Mellis is right and Mellis is extremely talented, so it was a bit of a crime to leave him out of the original post. I think this lad is the only one of the elite group, with the possible exception of Bruma, who can play in defence [he has been played in the sweeper role for the youth team], midfield and he also wouldn't look out of place playing in the second striker position - in terms of ability, the nearest thing we have to an eventual replacement for Frank.

[Barry Bridges]

Interesting thoughts Dorset. Exceptionally well researched. Not entirely sure whether the issue of Bruma at left back isn't more to do with finding another option for left back for Inter allowing Malouda to go forward. That said the Matic issue throughs up more questions.

Barry on the other hand. I think your being a little alarmist. I think your assessment that it's best to go without a few trophys for a few years in order to ensure financial security, is out. We're not Portsmouth, our owner is a bit more dedicated to the club than Gaydamak. Why exactly would a man spend as much on the club as he has in the past 7 years, write most of it off last year, and then simply decide to walk out, leaving us in the lurch and him out of close to a billion dollars for nothing?

It's certainly the case that we could become more sustainable, after all we've been attempting to do that for quite a while now. But I think your suggestion that we cut Nicolas Anelka of all people, if his wage demands are too high is bordering on the ridiculous. The youth system is all well and good and from what I can see there are some quality prospects notably Bruma, Kakuta, Borini as well as others who could well make it at the top level. That said we don't have a great record at producing young talent, and although I'd like that to change, your assessment that we should lack ambition, cut top players if they demand large wages and rely on the youth system, is most likely to end up with us fighting just to hold on to a Champions League place. Something that if we missed out on would be a far greater issue re. operating losses than any current issue we have.

I'd agree with Dorset that there probably won't be any big ie. 20+ million signings this summer. But honestly I'd expect us again to attempt to add younger solid players who can contribute to the squad similar to what we did last summer. It's not all doom and gloom, cutting Ballack's wage by half is a start, keep the faith.

You may label me an alarmist, and please don't take offence to this, but I would label you don't.

We're aren't Portmouth facing administration, but neither were they 2 season ago! You think Leeds downfall was obvious to everyone before it occurred?

We have a huge finiancial problem, the only reason its not hurting us is because of a bandaid called Roman Ambromavich.

Lets look at last 3 years operating revenue losses

2008- 70.3m

2007- 66.8m

2006- 80.2m

http://www.scribd.com/doc/27118443/Chelsea...ll-Club-Limited

Wanna bet this year is close to 2006 levels than anything? Just topped off all the top earners some nice 5 figure A WEEK raises.

Now Roman is a business man, and Chelsea is just another business he owns. Don't go deluding yourself that he was wearing Chelsea sweaters as a boy, or that he was coveting Chelsea for sometime before buy it. No, he bought it on a whim, and can sell it just as easy. And guess what? Unlikely any mega rich owners are going to re-buy...the sheik have their clubs, I don't know of any billionaire Chelsea fans, and mega rich businessmen will see a venture that loses an average of about 70mil a year......

It doesn't matter if you have sunk 1 million or 100 billion in a business, once a good business man realises its a bad investment, they will walk away. Why lose more money in a bad investment? Losing 1billion sucks....losing 1.5billion, though, is even worse. I dont think Roman is a poor business man....

Of course I want to win trophies and compete, I wouldn't settle for anything less than giving it 100% every time. However, I do not want to win trophies bad enough that I'm willing to risk have Chelsea end up like Leeds.

Roman has stated many times he wants to win Europe....that and he wants Chelsea to be self sufficient...aside from that I haven't heard much about his goals for this club (maybe I'm missing him). What if we win it this season? Roman could determine he has what he wants, and doesn't want to sink another 100m and walk away as soon as he can sell.

What if his other business interests tank? I imagine he would have no problem selling Chelsea especially if he doesn't have the funds to keep our books floating.

What if we pull a season like Liverpool and are out of the CL in a future season? He could determine enough is enough and decide its not worth it to sink another couple hundred million and instead just try and recoup what he can through selling or liquidating.

Hell, what if he dies in a accident? or has a heart attack and his doctors say "that Club Chelsea.... running that club, well that stress will kill you". There is just so many factors not even related to the sport than could make Roman gone at the drop of the hat.

If you look past the glory, our club appears to be a piss poor investment for anyone with the money to buy. As we stand, we a re a rich boys toy, not a viable/profitable or even revenue neutral business.

Now I'm not saying any of these will occur, or if they do soon. However one thing is certain, and it is that Roman and his cheque book will not always be here to see things through.

I say cut anyone who wants ridiculous wages, it has to be done Anelka. Joe whoever, no man is bigger than the club. If they want to make silly money, they can earn it through performance bonuses that mean we pay out when they are making the club added revenue (prize money/TV revenue/Merchandising).

Our wage bill was 172mil 2007-2008, and we have already added more on top of that with bumper contracts. Yet you think we should add even more!?!?!?!?!??!?!?!??!?!

Sure sign Anelka to that 140 contract, but don't act surprised when Augero/Pato or whatever young star they bring in wants 160k, because look at what Anelka is making and he's past it....then don't be surprised when someone else wants 180k, because look what the other guys are making, and now its 200k, because the squad members are now making 100k, because thats how trends go.

Don't think it will happen? Wakeup, its happening as we speak with Anelka/Joe.

They don't want raises because of their performances, but because the other guys make that much.

We have to lower wages, and that means reversing the current trend....and that means pissing off the first 2-3 people who realise "hey, guess what, your not making as much as Lamps or Terry....because even they shouldn't be making that much! To bad for you they already have those contracts, but you do not".

We will find people who can get the job done under 100k, because there isn't a club who can afford to pay those wages long term. Clubs will stop paying them either by learning before they meltdown, or after they meltdown because they cant pay anymore.

The only clubs who can afford it, are us and Man City, because we have owners who throw money at problems. However, EUFA is implementing financial fair play rules, meaning we cant afford to do it either if we want to play in Europe.....and isn't that the main thing Roman bought us for? His coveted prize? His holy of holies?

If you want the best, you must prepare for the worst...........we are nowhere near prepared, and its scary to think what will happen to this club the moment Roman stops investing UNLESS we make this club financially sound.....or at least stop losing over 60m EVERY season.

The sad thing is, for a profitable year we would have to pretty much win the treble.......and even then our profits would not look very good.

It is absolutely imperative that we start relying more on our youth system for 2 reasons.

1) We can not afford to keep purchasing our players for 20m plus from other teams. Thats fine for a few players in your squad....but not for EVERY player in our squad....well I guess we didn't on JT :unsure:

2) We need to start generating revenue via player sales. How many players have we sold at a profit? Im too scared to even look at those numbers........

We lose an average of 60-70m a year in revenue....we spend between 170-200m in wages.....this is logical place to cut wages.

What else would you advise? Double ticket prices(bigger stadium not on the cards)? Increase the price of merchandise and concessions at the Bridge?

It has to be the wages, especially when you consider the spiral effect they seem to have. You pay your top player 150k a week, other good performers want parity etc then your top players want distinction yet again etc etc eventually your worst player is making 150k purely because of that cycle while your best is now at 300k and it keeps on going. This isnt real world inflation, no other salaries (CEOs aside) have risen as drastically. Remember when Acole came? 55k was HUGE, now IM sure we have youth players making that tosh. We were a club who helped set these wage precedents, were going to have to be the ones to help set the reverse trend.

While I'm not advocating pressing the panic button just this minute, this is a very important issue that nees addressing ASAP.

Its in our own best interests long term.

of course, IMO. :D

[Barry Bridges]

I mean naive, not dont....stupid spell checker!

[Guest]

Interesting topic.

I must admit, I though I think Barry Bridges is being possibly being a little over dramatic with his points, the principle of what his saying makes sense to me. I don't beleive it is sustainable for us as a club to make 60 to 80 million pound operating losses each year and that ultimately we'll need to at least break even.

As for how we do it, I beleive this Chelsea side is a bloody good team and Ambromovich isn't necessarilly going to want to break it up prematurely. Rather some of our old players will gradually be phased out and replaced by younger, cheaper signings who yes, may not be as good.

[ozboy]

The trick as always is to sell the ageing players for more than they are worth and buy the younger ones when value is still increasing whilst at the same time playing a team which has enough of the world's best players to win a couple of trophys every year.

its no easy trick.

The ground limits revenue although of course ticket prices could always be improved further. The reality is that the devalued pound means that higher sterling wages will have to be paid to keep or brink players to the UK. Rman can afford to pay more because his income is not in Sterling and he probably finds a way to use the tax losses.

Also wages nearly always go up in most sports whether its sustainable or not. Just look at history.

[Phillip]

Something inside me wonders that if we win the Champions League this year, or if we had won it two seasons ago, that would have given RA his Holy Grail, so-to-speak, and he would have jettisoned the club soon thereafter. So, perhaps not winning the CL each year is a good thing for us, in a strange way.

Edited March 15, 2010 by Phillip

[Phillip]

The trick as always is to sell the ageing players for more than they are worth and buy the younger ones when value is still increasing whilst at the same time playing a team which has enough of the world's best players to win a couple of trophys every year.

its no easy trick.

The ground limits revenue although of course ticket prices could always be improved further. The reality is that the devalued pound means that higher sterling wages will have to be paid to keep or brink players to the UK. Rman can afford to pay more because his income is not in Sterling and he probably finds a way to use the tax losses.

Also wages nearly always go up in most sports whether its sustainable or not. Just look at history.

Then we probably should have let JT go to Citeh, I suppose.

[german-blue]

The trick as always is to sell the ageing players for more than they are worth and buy the younger ones when value is still increasing whilst at the same time playing a team which has enough of the world's best players to win a couple of trophys every year.

its no easy trick.

Agreed. And in my opinion selling some of our 30+ players wouldnt even harm our squad. A good balance of unproofen hungry players on one side and experienced players on the other is needed. At the moment we dont have that as Mikel is the only young one amongst our regular starters.