Pinching this from Twitter because I thought it worthy of discussion. 

Chelsea's net spend has substantially fallen in last 2 seasons to £21m annual average, compared to £65m for 2011-15. Gross spend has increased from £103m to £112m, but sales have risen from £38m to £91m. There was £213m spending in the summer (Morata, Bakayoko, Drinkwater, Rüdiger).

There's a fairly lengthy analysis of of our financial position here click on the tweet to view the full thread. 

 Looking purely at the net transfer spend, which more than a few people have picked up on recently, it raises the question. 

Why are the club spending so little (by our standards) on strengthening the first team? 

We've seen a continuing shift of mindset towards transfers over the last 5 years or so but we're at a stage now where we are almost trying to break even on transfer fees in/out.

Given the expectations on the managers but also the expectations of the fans of wanting the team to be competitive and winning trophies most seasons is success going to be sustainable if we continue to see a hard line approach to transfers, especially when you look at the sums being invested by the two Manchester clubs?

We're seeing it again even this winter transfer window. 

£35m fee was touted to have been agreed for Barkley in the summer, something happens and it doesn't go through and then it's done and dusted within in a couple of days of the window opening with £20m apparently saved. Good business on the surface of it but could Barkley of possibly have been fit during December maybe even late November to help with the busy schedule? Purely speculating but it's possible isn't it? 

There's no secret that we're looking to boost our forward options, especially after a club first of three successive 0-0 draws on the bounce. Apparently we're looking to take Andy Carroll on a six month loan. Minimal investment from the club and the short termism possibly indicative of how much longer we can expect Antonio to be with us too? 

So do us Chelsea fans have to wake up to the realisation that the free spending days of yesteryear with Roman are gone? Is this just "short term" from the club, looking to hold back some fund given the large investment required to build the new stadium? Or perhaps we haven't seen "value" in player availability over the last two years and the next big splurge is only a transfer window away?

Well the club have said for a long time that they wanted to move away from relying on Roman funding us, and towards a sustainable model of a top club with great commercial revenues that spends within its (substantial) means. I'm guessing that the sudden explosion in transfer fees has taken the club by surprise like it did everyone else, and has caused some consternation in how we move ahead.

The club will have revenue targets in place for the coming years, and presumably spending budgets, but if those budgets suddenly represent sums that will only buy you mid level players then where do you go from there? Throw away the entire sustainability plan and hope Roman doesn't mind keep chucking his own money at us forever?

I think there's a fair probability that we'll be top 4 without being a major competitor for the title for a few years while the market settles down, we build the new stadium and continue to increase club revenues. We could still pick up a title in that time, but I'd be very surprised if we suddenly start matching the astronomical spending of United and City in the next couple of years. 

Edited January 15, 20188 yr by Kentonio

The big issue is the circumstance, every other big side has their stadium sorted out except for us, that could be a major setback.

And then you have City who can legitimately spend 200 million every season and bypass FFP clampdowns. Another major repercussion to FFP, corruption, it will just let the top teams stay top teams and no doubt FIFA wanted more control of the football market. 

Looking at the long-term you can come up with many possibilities, I think a daunting one is a possibility of the EPL becoming like La Liga. For once the Spanish sides don't seem to have all the power like they used to, the tables have flipped, we might see the PL aiming for a two-team league with the Manchester Clubs who can legitimately spend much more than everyone every season with no repercussions, particularly City. 

I would hate the Manchester clubs to monopolise the PL market, they already seem to have a hegemony of all top talent that's flying in the PL. We aren't even looking to be interested in signing Sanchez, a player who desperately need more than United & City combined. I understand the reality that Chelsea are in, we can't make the legitimate revenue the Manchester clubs are producing, and soon it could be said for Tottenham. So how could we possibly not fall behind when it's going to be harder for us to bring in top talent? When we'll have to bargain more for players when United & City can freely lump cash on anyone? That's the worrying fate of the future, and something I can't stop thinking about. And that's not just pessimism, it's very possible.

Basically, I just want us to break the possibility of a two-team hegemony which would be very bad for the future of Chelsea football club and the league, to go on most seasons expecting to not even challenge the title would really be a big spoil for years to come. 

 

6 minutes ago, Kentonio said:

Well the club have said for a long time that they wanted to move away from relying on Roman funding us, and towards a sustainable model of a top club with great commercial revenues that spends within its (substantial) means. I'm guessing that the sudden explosion in transfer fees has taken the club by surprise like it did everyone else, and has caused some consternation in how we move ahead.

The club will have revenue targets in place for the coming years, and presumably spending budgets, but if those budgets suddenly represent sums that will only buy you mid level players then where do you go from there? Throw away the entire sustainability plan and hope Roman doesn't mind keep chucking his own money at us forever?

I think there's a fair probability that we'll be top 4 without being a major competitor for the title for a few years while the market settles down, we build the new stadium and continue to increase club revenues. We could still pick up a title in that time, but I'd be very surprised if we suddenly start matching the astronomical spending of United and City in the next couple of years. 

So here's the thing, even with club looking to be more financially independent and spending less (net) on transfers we're still barely operating at a profit. 

 

Club's like Stoke and Southampton getting close to our profits and the likes of Everton, Spurs and Arsenal far outstripping ours.

We've twice made a profit in last four years but in-between those profits of £35m we made loses of £91m so an overall loss £56m.

I think buying out the remainder of our Adidas deal might play heavily into those loses so maybe this time next year our profits will be looking a lot more healthy?

But all said and done are we heading down the Arsenal route of top 4 finish and good profit margins = a successful season from a club perspective? 

4 minutes ago, Slojo said:

The big issue is the circumstance, every other big side has their stadium sorted out except for us, that could be a major setback.

Obviously the CPO plays a massive part in where we play as a club but Roman's been at Chelsea well over a decade now and we're only now looking like we might redevelop Stamford Bridge. 

Spurs are soon moving to a new 60k stadium. Arsenal have been at the Emirates Stadium for over a decade now, Liverpool and Manchester City have and are expanding their ground capacities and Everton are aiming to move into a new stadium in roughly 4 years time too. We've yet to confirm whether we are going ahead with our new build, when works would start and where we will play for the four year construction time... We're probably not looking to be in our new stadium until some time around 2025. 

3 minutes ago, ForeverCarefree said:

We've twice made a profit in last four years but in-between those profits of £35m we made loses of £91m so an overall loss £56m.

I think buying out the remainder of our Adidas deal might play heavily into those loses so maybe this time next year our profits will be looking a lot more healthy?

But all said and done are we heading down the Arsenal route of top 4 finish and good profit margins = a successful season from a club perspective? 

While the stadium is being built, I think there's a chance that we are, yes. Add in the extra matchday revenue from those extra 20,000 seats and we should be up with Arsenal's profit level and aiming to catch up with United rather than being concerned about the clubs around us currently. I know it's not what most fans want to hear, but at a time when we have City and United spending at the levels they are, is it really reasonable to expect us to match that AND fund a billion pounds worth of new stadium?

I actually don't think it's a particularly bad strategy. Arsenal managed to make it look like a terrible one by being Arsenal and achieving feck all even once the spending gates re-opened (thanks Arsene), but I don't think our board would settle for that kind of failure. Even if we don't win another trophy for the next 3-4 years, if we come out the other side with a world class stadium and the financial revenues to be able to compete for the title again, I think we'll be in a pretty great place.

I don't think it'll be quite that hard a road though, we still have a damn good side and even our 'limited' spending offers us the opportunity to win stuff even if we're not favourites to do so.

19 minutes ago, Kentonio said:

While the stadium is being built, I think there's a chance that we are, yes. Add in the extra matchday revenue from those extra 20,000 seats and we should be up with Arsenal's profit level and aiming to catch up with United rather than being concerned about the clubs around us currently. I know it's not what most fans want to hear, but at a time when we have City and United spending at the levels they are, is it really reasonable to expect us to match that AND fund a billion pounds worth of new stadium?

I actually don't think it's a particularly bad strategy. Arsenal managed to make it look like a terrible one by being Arsenal and achieving feck all even once the spending gates re-opened (thanks Arsene), but I don't think our board would settle for that kind of failure. Even if we don't win another trophy for the next 3-4 years, if we come out the other side with a world class stadium and the financial revenues to be able to compete for the title again, I think we'll be in a pretty great place.

I don't think it'll be quite that hard a road though, we still have a damn good side and even our 'limited' spending offers us the opportunity to win stuff even if we're not favourites to do so.

Agreed that once a new stadium is built you would expect a fairly significant rise in revenue, especially as we're playing on having 17k or our 60k capacity to be hospitality seating. 

But it's striking that balance of watching expenditure and investing enough to stay competitive. 

As you said, Arsenal tried to do this and are arguably suffering for it now more than ever. So how do you continue to sign good players, compete and win with any sort of regularity without breaking the bank?

It seems like the club have a strategy but I think the next summer transfer window is going to be very important. Personally, I thought last summer was largely poor in terms of recruitment and we cannot afford another window like that if we want to maintain playing in and being competitive in the Champions League and finishing top 3/4. 

Is any of this adjusted to inflation?

2 minutes ago, TomCFC85 said:

Is any of this adjusted to inflation?

Can't give you definite answer but to the best of my knowledge, no, it isn't. 

2 minutes ago, ForeverCarefree said:

As you said, Arsenal tried to do this and are arguably suffering for it now more than ever. So how do you continue to sign good players, compete and win with any sort of regularity without breaking the bank?

It seems like the club have a strategy but I think the next summer transfer window is going to be very important. Personally, I thought last summer was largely poor in terms of recruitment and we cannot afford another window like that if we want to maintain playing in and being competitive in the Champions League and finishing top 3/4. 

Well I'm not really convinced that Arsenal are suffering because of that strategy. As someone pointed out, they've been in the Emirates for 10 years now (which shocked the hell out of me, I actually had to go and check because it only feels like a few years ago! ) which means that either Wenger has just completely and utterly failed to capitalize on his available spending, or the Arsenal board are happy making large profits and don't really care that much about being title competitors. Considering the revenues they're making, the idea that they won't give their top players wages comparable to the top players in the league (and are willing to see them leave for almost nothing as a result) seems to suggest that they are not really interested in being at the top table of European football.

Given that we've been so determined to sit at that table despite lacking the club revenues that our rivals do, I don't really have any worries about us being willing to settle into that Arsenal perpetual cycle of mediocrity. If its a firm part of the club strategy that this would be a window of consolidation to put us into a position to go hell for leather for the title and CL, then they have my support.

If we're going to spend 5-10 years in a barren spell while we build a stadium, I at least hope we can bring through some young talent from the academy, except then if we finally start doing it, the best will probably get pinched by City and whoever tries to keep up with them.

Unfortunately, as we've seen with Liverpool and Arsenal in recent times, once you fall from the top, it is not an easy job to get back up there.

Edited January 15, 20188 yr by Zeta

By the time the stadium is up and running and we reap the rewards it could be a bit late in terms of challenging for the big trophies. Given the stadium is a good few years away who knows where the EPL's big spending clubs will be with the money being invested just now.

Pogba's 90 odd million deal doesn't look ridiculous anymore with Morata going for almost 70 million and the very top players well over 100 million pushing close to the 200 mark. We simply won't be able to attract those sorts of players with our current model.

Is Hazard going to be the last truly world class player (Tibo too) we have for a good while? I think that's a possibility.

We aim to bring in younger players with potential and middle of the market type players who do a job but don't set the place on fire.

I will never be ungrateful as Chelsea have been so fortunate as a club to have the current ambition and high standards which of course hadn't always been the case. I just wish the club would let us know that's what they are doing and we would limit our expectations to fit their plans.

 

1 minute ago, Zeta said:

If we're going to spend 5-10 years in a barren spell while we build a stadium, I at least hope we can bring through some young talent from the academy, except then if we finally start doing it, the best will probably get pinched by City and whoever tries to keep up with them.

Unfortunately, as we've seen with Liverpool and Arsenal in recent times, once you fall from the top, it is not an easy job to get back up there.

Nope.

Liverpool still haven't recovered fully from the 90's fall from grace domestically speaking while Arsenal look to be going for a second successive finish out the top 4 with about a decade of failure domestically too. With the sums of money gaining momentum for decent players it's going to make climbing back to those heights almost an impossible task without ridiculous investment again.

If we manage to keep our star players, I feel this summer will give us good indication of whether or not we are willing to spend big money anymore. 

We can't raise the funds through player sales this summer, so Its good to have to be a significant gross spend if we want quality. 

With the massive increase in sponsorship and tv rights, you would expect our finances to improve significantly, especially after a title win and return to champions league football. 

 

2 hours ago, Kentonio said:

While the stadium is being built, I think there's a chance that we are, yes. Add in the extra matchday revenue from those extra 20,000 seats and we should be up with Arsenal's profit level and aiming to catch up with United rather than being concerned about the clubs around us currently. I know it's not what most fans want to hear, but at a time when we have City and United spending at the levels they are, is it really reasonable to expect us to match that AND fund a billion pounds worth of new stadium?

I actually don't think it's a particularly bad strategy. Arsenal managed to make it look like a terrible one by being Arsenal and achieving feck all even once the spending gates re-opened (thanks Arsene), but I don't think our board would settle for that kind of failure. Even if we don't win another trophy for the next 3-4 years, if we come out the other side with a world class stadium and the financial revenues to be able to compete for the title again, I think we'll be in a pretty great place.

I don't think it'll be quite that hard a road though, we still have a damn good side and even our 'limited' spending offers us the opportunity to win stuff even if we're not favourites to do so.

It can work the other way though, in that period when the stadium is being built Chelsea would need to keep their best players, consistently stay in the champions league and stop paying compensation packages to new managers every season.

 

All this chat of how much money we have, how much money we could have after stadium etc,
It doesnt matter if we had 500million every year to spend because who ever is deciding, is buying completely average players, £213m in transfers and near enough everyone i wouldnt mind replacing

3 minutes ago, Ernie_blue said:

It can work the other way though, in that period when the stadium is being built Chelsea would need to keep their best players, consistently stay in the champions league and stop paying compensation packages to new managers every season.

 

This is true. I think I personally just have quite a lot of faith in our board though. Despite the many pitfalls we've faced in the past and the misteps along the way, we've still come through it with an incredible trophy haul and in a great position. We've been in much worse positions in teh past than we're in right now I think it's fair to say.

I do have concerns with recent purchases and their injuries; Bakayoko, Drinkwater and Barkley. Will they be able to play regularly or will their bodies keep breaking down?

Now it could be this is part of the strategy to now start bedding in the younger players though until that starts happening we are just guessing.

On the plus side the introduction of Christensen this season is a good boost.

 

 

I don't mind us not spending as much as some other top clubs, but it's who we spend the money on that worries me. It's very much like Arsenal's strategy. Spend a bit of money, but spend it on average players because we don't want to cough up that extra bit of money to land the top players.

It's a flawed strategy anyway. You buy one average player for big bucks, then you realise he isn't good enough so spend big bucks again a year later on another average player.........wouldn't it be better to just spend the extra money on the top player straight away ?

I look at our signings and i see Zappacosta, Drinkwater and Bakayoko, i personally don't see any of them being good enough to help us keep up with the best teams, so what next ? will we spend another £30m on an average midfielder / wing back next season ?

Eventually it catches up with you and the squad just get's weaker and weaker. Just look at the state of Arsenal. They spend money, but they spend it on mediocre players because they don't want to spend that bit extra on the big players, and now they are in a position where they are struggling to get any top players. If we carry on the way we are going, i think there is a big possibility of the same happening to us.

2 minutes ago, Scott Harris said:

I don't mind us not spending as much as some other top clubs, but it's who we spend the money on that worries me. It's very much like Arsenal's strategy. Spend a bit of money, but spend it on average players because we don't want to cough up that extra bit of money to land the top players.

 

That might be the other strategy, coast until the stadium is built.

3 hours ago, Kentonio said:

I think there's a fair probability that we'll be top 4 without being a major competitor for the title for a few years while the market settles down, we build the new stadium and continue to increase club revenues. We could still pick up a title in that time, but I'd be very surprised if we suddenly start matching the astronomical spending of United and City in the next couple of years. 

I don't think we can count on finishing regularly in the top four, if things don't improve significantly. The competition for CL places is very tough and even this season there are no guarantees we won't end up 5th or lower.

The problem with lowering our expectations and settling for less is that it makes it very difficult to keep the squad competitive, buy top talent and last, but not least, hold on to that top talent. I just don't see how it's going to work without the club suffering huge setbacks. We don't have the prestige of Real, Barcelona and Bayern, or the money making business model of Man United, and unlike PSG or City we cannot rely on oil state billions to keep us at the top. We'll simply become the Arsenal of the last decade, the only difference being that reaching the fourth spot has now become a much harder proposition as they too found out quite recently.

13 minutes ago, abramovich said:

I don't think we can count on finishing regularly in the top four, if things don't improve significantly. The competition for CL places is very tough and even this season there are no guarantees we won't end up 5th or lower.

The problem with lowering our expectations and settling for less is that it makes it very difficult to keep the squad competitive, buy top talent and last, but not least, hold on to that top talent. I just don't see how it's going to work without the club suffering huge setbacks. We don't have the prestige of Real, Barcelona and Bayern, or the money making business model of Man United, and unlike PSG or City we cannot rely on oil state billions to keep us at the top. We'll simply become the Arsenal of the last decade, the only difference being that reaching the fourth spot has now become a much harder proposition as they too found out quite recently.

I think even we as Chelsea fans underestimate our prestige amongst players. I've heard so many players in interviews talking about how they watched Chelsea in the CL as a kid and loved it, and my immediate reaction (being old and all) was to think it was bullsh*t. When you do the maths though, a 25 year old would indeed have only been about 10-11 back when Mourinho was first pushing hard in Europe for us, and (apart from an occasional year and our recent Europe slump) we really have been up there challenging for a huge amount of the time since. We might not have the prestige of Barca or Real, but I think we're considered a lot bigger by todays players than even we expect. 

Obviously that isn't something we can ride forever, but it probably would buy us a few years of grace.

The money is there, people can cite net spend but aside from Matic, no one that Conte wanted to keep was sold. The problem is who we are spending the money on.

"Omelettes, eggs. No eggs, no omelettes. And it depends on the quality of the eggs in the supermarket. They are class one, two or three and some are more expensive than others and some give you better omelettes. When the class one eggs are not available you have a problem."

We can't expect Roman to net spend 100M+ every season, we have invested so much in the youth and yet only Christesen stepped up so far, we shouldn't be paying 20-30M for squad players regularly, 2-3 those young stars should have stepped it up into the team now. Ok, we did sell Ake and Chaloabah, either the best we have produced are just not good enough or they have lost faith. Let's say we save 30-40M a season on those squad players, there's the extra money we need to buy the next level player.