Why Liverpool is our model & we have to change the strategy (& The sporting directors)

Change is needed before they make things any worse

A lot has been discussed recently about the Chelsea wage structure, and how it cost us some players, like Michael Olise and Victor Osimhen - two game changers, who probably would have ensured top 4 and Champions League football for Chelsea.

Clubs like Arsenal and Manchester City pay higher wages than we do. However there is one club which has spent less money than them and Chelsea, who pay lower wages than all three clubs, and yet is on its way to its 2nd PL title in 5 years, and by the end of the season could have 8 major trophies in 6 years, including all the big trophies. Liverpool.

Before I get into Liverpool, we need to address some facts about Chelsea Football Club now, and this is regardless of who owns the club. We’re not owned by a nation state, we have a small stadium compared to most PL rivals (11th biggest in the PL, Sunderland’s is bigger than ours), and as such, we simply won’t generate the revenue needed from matchday income currently to sustainably pay huge wages or big transfer fees.

It's simply not going to happen as things are, hence the desire to get CL football and move to a bigger stadium. So we cannot compete with Man City financially, unless we want to go bankrupt, which I personally don’t and I don’t think the owners do either.

Whether we like it or not, Liverpool are the model we need to be following as a club. They've never had a rich benefactor, but have had incredible success since 2018.

They’ve had this high level of success despite having a pretty rigid wage structure and not spending above £75m on a single player. Darwin Nunez arrived for a bigger fee after they had won almost everything.

Liverpool’s secret sauce is mainly that they use data exceptionally well, they have one of the best data hubs and analysts in football and it governs every decision, including who they choose as their manager. Jurgen Klopp and Arne Slot were selected using data - both look to be inspired appointments. They also have had, both up to 2022 and from last summer, one of the best sporting directors in the world in Michael Edwards running their operations.

In contrast, whilst we have excellent scouts and better data analysis than ever before, our Sporting Directors Paul Winstanley and Laurence Stewart, had never been Sporting Directors or worked at big club before they joined Chelsea. They had literally no record in the game as sporting directors, and had done nothing in the game which warranted their promotion to their current roles, which they’ve done pretty badly. In fact, there is a strong argument they’ve weakened our squad from last season to this season despite spending another £200m last summer. Some achievement.

As a result of having poor Sporting Directors, the way data is used clearly isn’t a good use of data, given the inconsistency in the type of signings, and how so many haven’t worked out.

A top sporting director interprets and uses data well to make objective decisions. They don’t bring any personal biases, just pick from a shortlist presented by the data team based on how easy one is to sign or if they know the player personally, or if it would boost their personal standing if it came off, all of which seem to be part of our Sporting Directors modus operandi (and yes, its obvious).

Liverpool also don’t do deals for players we don’t need to satisfy any particular agents, which we clearly do, (Joao Felix for example), and Liverpool do all deals to strengthen the squad, not just as a PSR favour for a club we’re selling to (Joao Felix and Keirnan Dewsbury-Hall).

I’m going to list some wage bills in the next part of this article, and I know many including Swiss Ramble/official figures give generally higher figures for wage bills, which include bonuses and add ons. I’ve decided to go with Capology as my source, I’ve checked them out and they’re generally a pretty reliable source of a club's basic wage bill. Their figures don’t include players out on loan, whose wages are paid, and focus on player salaries only, not managerial payoffs or any other payouts or salaries.

For example, Chelsea’s official figures showed a £404m wage bill for 22/23 included managerial payoffs and compensation (which would have been about £50-60m alone), whereas Capology, which only measures players basic salaries, not including players on loan, had our player wage bill at £226m. Other wage bill figures will appear elsewhere, and I’m not doubting their accuracy, but Caplogy is seen as a reliable, accurate source for player base wages, my focus in this article, and has the most detail all in one place, purely for player wages.

When Roman Abramovich owned the club, we could afford the big wages because any shortfall on FFP or PSR on the accounts, he would simply cover by investing into the club. In 2020 for example, he put £226m into the club, without which we’d have broken PSR and FFP rules that season spectacularly. That was never sustainable or healthy. That meant our player wage bill got up to nearly £200m (£323m everything included), when he sold the club.

In the final 5 years of his reign we had a huge wage bill, and yet were on average, 25-30 points behind the PL winners every year, lost 5 domestic finals in a row, and discounting the Club World Cup and European Super Cup, only won 3 major trophies. Indeed in the first of those years we didn’t qualify for the Champions League.

In the first year of the current ownership our wage bill was £226m and we were paying Raheem Sterling 300k per week, but we had our worst league season for 30 years. At Chelsea at least, high wages have not been any remote indicator of results on the pitch.

This brings me to Liverpool. The second most successful club in terms of trophies in the last 6 seasons.

In the 18/19 season, when they got 97 points, came second in the PL and won the Champions League, Capology has Liverpool’s basic wage bill excluding loan players at £145m (the gross figure including all loan players, and other salaries, was £305m) Chelsea’s wage bill that season, again excluding loaned out players, was £205m (The Swiss Ramble figure is £295m) - we finished with 72 points (25 points behind).

The next season, when Liverpool won the PL with 99 points, as well as the European SuperCup and World Club Cup, and we finished 4th with 66 points (33 points behind), Liverpool’s wage bill before bonuses and players loaned out, etc was £136m according to Capology - lower than the season before, £326m including bonuses, loan players, manager salaries etc (Swiss Ramble), which makes sense given they won 3 major trophies in one season. Chelsea’s wage bill dropped due to the transfer ban with no incoming signings, and losing big earners Eden Hazard and David Luiz, to £136.7m without loan players and other salary costs, according to Capology, £283m overall, as we won no trophies.

This season, Capology has our wage bill as £178m, and Liverpool’s as £128.8m, though remember club figures will be higher as they include bonuses (which can be huge), and players out on loan, and other compensation and bonus figures. Man City’s this year are £226m and Man Utd’s are £183m.

Liverpool have had incredible success without being the highest paying club in the Premier League and without spending as much on players as others. Their current squad cost a total of about £650m, whereas ours cost £930m. It's not how high your wage bill is or how much you spend, it's how well you spend, and where you spend which matters. And we’ve not spent well on balance. Yes, there’s been some successes, but when you’ve spent £1.4 billion you should have a squad which is competing for the top 2, not scrapping around for 4th or 5th.

Another thing we can learn from Liverpool is how well they've built on their success to improve commercial and matchday income. They’ve increased the size of their stadium and used the Champions League status to get massive commercial deals. This has given them more financial freedom, earned through success, meaning they’ve been able to have some financial freedom in terms of extending Salah a couple of years ago.

And this is now what Chelsea HAVE to do if we’re going to get back to the top, and be a winning, successful club on the pitch again, as well as be a sustainable football club off it

This is why we need a bigger stadium - a 60-70k stadium with a fan park could see our matchday revenue go up by £40-50m. That’s essentially two £75m signings every season in amortised figures and more flexibility in the wage bill potentially. It also means huge commercial deals like a £60m shirt sponsorship, potentially £50m a year from Jordan brand, and other new commercial deals, all of which mean Chelsea become a genuinely rich club in its own right, not needing a benefactor to pay for success.

Staying in a 42k stadium will ultimately mean we fall way behind other clubs financially and simply won’t be able to afford to spend as much on players as even Spurs, who are now regularly making more income than us.

If we want Chelsea to be a side which wins major trophies and competes for the biggest trophies in the game, we have to support a massive stadium expansion. Otherwise, we all just have to accept we won’t be a serious side and stop complaining about it, because frankly, we won’t be able to afford to compete financially even with Spurs. That’s the harsh reality and there’s literally no way around it without risking the clubs future. None.

Roman was a one off and he isn’t coming back, we don’t have a sugar daddy to pay the cheques. And frankly I don’t want one anymore, I want us to earn our success through being a successful club off the pitch and paying for our own success. There’s something very satisfying about that and it stops a lot of the criticism too, and we never have to be anxious about our club going out of business again.

This is why I keep saying Clearlake, although not who I want as owners, DO want us to win, (and have actually said so). Their pockets get fatter and so do their investors, if Chelsea are in the Champions League every season and competing for trophies.

But back to wages. Chelsea DO need to have a wage structure, we can’t let our spending get out of control. The club needs to be run well financially. Until we start generating Champions League revenue and the big commercial deals which come with it, we can’t go spending ridiculous amounts on wages and will have to keep selling players to bring in revenue. This is a reality whether we like it or not. And a lot of big clubs, Man City, Arsenal, even Man Utd, are now doing this to bring in revenue.

However, like Liverpool, we need some flexibility in our wage structure, and then go out and sign some truly top class, proven, experienced players in key positions (if we can even persuade them to join us). I’ve been banging on about experience for ages and its SO obvious we need it, and its not up for debate.

Keeping this wage structure so religiously can cost you players. Indeed not signing experience can cost you success too. Should we have been flexible for Michael Olise, Victor Osimhen, and made some compromise? Possibly yes. Because then Champions League football would be more secure now, and we’d make back the money we paid out on wages.

The other thing with Liverpool, is because they recruit well consistently, they get Champions League regularly and rarely do players push to leave the club. They’re up in the top 4 every year and competing for trophies. But even if they do leave, they can be trusted to replace them with another top player.

With Chelsea, we all know now that we simply can’t trust the Sporting Directors to buy well. Especially after the last two catastrophic windows, which have actually weakened us in my view, and where the Sporting Directors in all likelihood cost us two game changing signings.

If we lose top players (which could happen without CL football), the SD’s cannot be trusted to get big, important deals over the line to replace them, it's as simple as that. This is one of many reasons they need to be removed or moved aside as quickly as possible, before they sabotage Chelsea’s future any more than they already have.

So to conclude, Chelsea don’t have endless amounts of money to spend anymore, we don’t make the revenue to do so….yet. So, we have to spend money better and smarter, and we DO need a wage structure to be sustainable as a club. However, we also do need and can have a little flexibility in terms of wages for the odd elite and experienced, proven player to help us now so we can start to grow our revenue from commercial deals and CL football as quickly as possible.

This will require a change in strategy at the top and employing an elite sporting director who is respected in the game, can build squads, knows how to use data well and has a winning mentality, alongside a Chelsea man to ensure we rebuild a healthy club culture.

It is possible to have a good, healthy wage structure where you don’t pay ridiculous wages, and be a team that competes for and wins PL titles, CL trophies and wins trophies overall on a consistent basis. To grow the commercial revenue beyond recognition.

It pains me to say, but Liverpool have shown this over the last 6 years. We need to get our shit together as a club and get ourselves back to the top again.

It really does break my heart seeing how we’re being run on the men's football side right now. There simply has to be a change in personnel at the top and a change in approach as soon as possible, for the sake of Chelsea’s future. It won’t even take much, it's there if we want to do it. It just needs the will and action of Behdad Eghbali and Clearlake to do what's necessary.

Your move, Clearlake. In the words of Harvey Specter from Suits, get it done.

The Score