How & Why Chelsea Needed to Find a Sustainable Model for Success

The Roman way couldn't go on forever

One question or topic I see a lot on socials now is comments about the business side of the club. People despairing at the amount of commerical deals, sponsorships and also a desire to cut the wage bill and have a semi-salary ceiling.

In that vein, I think its’ important to highlight our the model our club was run under during Roman Abramovich’s era, and why we’ve now got to transfer to a different model - whoever the new owners were.

So lets’ look at how we were run in the Roman era.

Basically, for the first 9-10 years our spending was funded by a series of loans by a company or companies owned by Roman. These underwrote our spending and subsidised our debt. After FFP came in we still saw cash injections by Roman personally, which were shown in club accounts.

Accounts published in 2020 showed Roman had personally invested £247m in the club the previous financial year, and yet the club had still made a financial loss of £96m that financial year (more than our losses last year, interestingly). Without that cash injection, Chelsea would have made losses of £343m, and that is despite a lot of player sales.

Without Roman, we’d have been punished big time for FFP and PSR probably multiple times. Chelsea simply didn’t make enough money by itself to pay for success.

I think we are all grateful for what Roman did for Chelsea specifically (and specifically NOT for what he did outside Chelsea, or the tyrant he had associations with). He saved us from financial ruin and made us the most successful club in England for 20 years and helped us win everything. He will always be remembered and go down in Chelsea history for that.

But nevertheless, the way he ran the club was not a sustainable model for running a football club. It could not go on forever. Ultimately Chelsea had to catch up with modern football and become sustainable.

In reality, until Chelsea increase our revenue dramatically, we can’t spend the giant amounts on players every year. Victor Osimhen for £110m on 300k a week feels a little reckless anyway, but when you’re trying to be run sustainably, its’ simply absurd.

The new ownership took advantage of amortisation rules to make some big purchases up front, like Enzo Fernandez, but they never planned this to continue. It was even reported during the takeover, they eventually planned to build success mainly with smart signing, the way Liverpool largely did (with a couple of exceptions).

Whoever replaced Roman Abramovich had to completely overhaul how the club was run. It was reported when the takeover took place that Boehly / Clearlake were shocked during their due diligence at how little data was held by the club, and how poorly data we did have was used. We didn’t have the structure of a modern football club.

Our model was really based on the finances and whims of Roman, and Marina Granovskaia, head of international scouting Scott Mclaghlan and his team, and the manager. And it worked for a while.

But between 2017 and 2022, the last 5 years of Roman, it was clear it wasn’t working as well. In that time we spent almost the same amount on players as Manchester City and more than Liverpool, yet we finished, on average 25 points behind the league champions every season in that time. Not one title challenge.

We also lost 5 out of 6 domestic finals in that time, and the only major trophies we won were the FA Cup, Europa League and Champions League. For the financial outlay (around £700-800m) that’s simply not good enough.

Things are clearly worse than that now and we’d probably jump at that success, but nevertheless, between 2017-2022 we still weren’t the Chelsea we’d been between 2003-2017, and were still dependent on one man for our finances. We had declined a little already, and the model simply wasn’t sustainable.

So whoever took over had to build

• a scouting and recruitment infrastructure

• a world class commerical structure

• rebuild the mens squad within PSR and FFP without being subsidised by Abramovich and keep investing in the women’s team and academy

• deal with other structural changes within the club

• negotiate new contracts with multiple players

• get the wage bill under control

• attempt to continue the level of success without much disruption

• build a sustainable, successful football club on and off the pitch

Not an easy task for anyone. Even more so people totally new to football. Now does this excuse the bad decisions they’ve made, bad appointments and other issues at the club under the current owners? Absolutely not. I’m not here to make excuses for Boehly/Clearlake.

However, it has been a period of huge transition with lots of work to do, and lots of change which was absolutely necessary. The ownership had to think long term in order to ensure the club is a sustainable business and build a structure able to deliver consistent success on and off the pitch in a sustainable way. That will take time to do. That’s one reason there seems to be so much “chaos” and “disruption”, because lots of off field work is being done to build that structure.

Jose E. Feliciano, co-head of Clearlake, one of our co-owners, said in 2022:

“We think we have an incredible opportunity to double revenue. We think we have one of the best media properties and sport properties in the world where we can get to a £1billion of revenue.”

To that end, in November 2023 we hired Casper Stylsvig as Chief Revenue Officer and James Murray as Chief of Staff and Head of Business Operations. Both have extensive elite level experience, having worked together at Milan to achieve the highest revenues in their history, and both have worked at other big clubs such as Man Utd and Arsenal in similar roles.

Their long term goal will be to grow our commerical revenue significantly. This could be anything from shirt sponsors, to stadium partners, and partners from different industries (cars, telecommunications, digital etc), anyone who can bring in revenue to Chelsea.

All of this is absolutely necessary long term to ensure Chelsea are a wealthy, self-sustaining club capable of investing to challenge for the biggest honours in football. Maybe we will accrue some debt to get there, but ultimately the hope will be revenue will be enough for us to service that without any issue.

The goal is, that in future Chelsea will be able to pay for our own success instead of relying on others. As a long term fan who has seen us near bankruptcy many times, the idea of Chelsea as a self-sustaining, wealthy, profitable, well run, consistently successful club both on and off the pitch, is worth some short term pain. I think that’s the owners vision, however, as we know, the execution so far has not been too great.

I want to make clear this does NOT excuse their mistakes, which we all know about. I’m not here to excuse or justify any of the bad decisions made by the ownership group or sporting directors.

There’ve been bad decisions made by the club, some of their footballing appointments and decisions, this ridiculous under 23 policy and their current lack of willingness to engage with fans, or be held accountable for the mistakes they’ve made.

They are new to the world of football and they have made mistakes, and they need to show contrition for this, and make steps to change and demonstrate ambition, and start getting big football decisions right. Fans are frustrated, and rightly so.

However, what I really wanted to explain today is why so much change is necessary. We relied on one man’s wealth to pay for our success and cover our losses, and ultimately, as we saw, that’s neither a safe or sustainable way to run a modern football club. Change and growing pains are required to become sustainable. Hopefully, in the next 5-6 years, we begin to see the fruits of that, both on the pitch and off it.

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