Among the spectators at Stamford Bridge on Sunday were three of the most powerful men in English football.
Chelsea co-owners Todd Boehly and Behdad Eghbali of Clearlake Capital watched their side, after a summer of tremendous churn in terms of player transfers, start life under new boss Mauricio Pochettino against a Liverpool side managed by Jurgen Klopp that were in search of their own relaunch after last season’s disappointing fifth placed finish that saw them miss out on the Champions League.
Boehly and Eghbali, whose first Chelsea season ended as an unmitigated disaster as the London side went through three managers and enormous spend to finish the season in the dismal position of 12th, were joined as interested billionaire onlookers by Liverpool’s principal owner John Henry, chief of club owners Fenway Sports Group.
If the first game of a new season and a meeting between two of English football’s heavyweights to kick start a campaign wasn’t enough, the build-up to the game had been dominated in the days before by the transfer battle that was ongoing for Brighton & Hove Albion midfielder Moises Caicedo.
So long a Chelsea target, the Londoners had seen four bids rejected in their attempts to prise the 21-year-old Ecuadorian away from the Seagulls, with Brighton standing firm on their £100m-plus valuation. On Friday it emerged that Liverpool had seen a £111m offer accepted for Caicedo and the expectation was that it would be a done deal for a British transfer record. But despite Chelsea having spent more than £750m under Boehly and Clearlake’s reign they refused to be rolled over and finally came back with a £115m bid on Sunday after the player had committed himself to a move to Stamford Bridge.
They haven’t stopped there, though. The day after the two sides duelled it out in an enthralling 1-1 draw in the capital, Chelsea and Liverpool remain locked in a race to sign Romeo Lavia, a long-time Reds target who has been the subject of several failed bids from Liverpool already. On Monday it was reported that Liverpool, having been reluctant to spend £50m a little over a week ago had now seen a £60m bid accepted for the 19-year-old Southampton midfielder. As with Caicedo, however, the deal is far from cut and dried and Chelsea are seeking to bloody Liverpool’s nose for the second time in a matter of days.
Chelsea’s mammoth spend is not without risk. Should they land Caicedo and Lavia then it would take spending to more than £900m. While they have seen a mass exodus among players they will undoubtedly face the scrutiny of the Premier League over potential profit and sustainability breaches. The club will have to further cut their cloth, likely focused on selling academy players who have a book value of zero, meaning that the fees that they are sold for would be straight profit, as was the case with Mason Mount and Ruben Loftus-Cheek.
But while the focus was on how disruptive the Saudi Arabian Pro League could be, and how it threatened to shake up the top level of global football in years to come, the change that has gone on at Chelsea has been far more seismic than anyone could have imagined, not least Henry himself.
When FSG acquired the club in 2010 there was the hope from the owners that Financial Fair Play rules to be introduced in 2012 would curb major spending and make for a more competitive playing field where seeking marginal gains through data and science aiding recruitment would help deliver success. But FFP never had teeth, hence the reason why it was revamped last year. Liverpool and FSG have attempted to operate under the same model as before, but in making a £111m bid for Caicedo they have shown that they simply have to fight fire with fire if they are to remain as part of the title challengers year in, year out.
Henry shared his view on financial controls needing to be ramped up in football.
“You are right that there are ever-increasing financial challenges in the Premier League,” he said.
“The league itself is extraordinarily successful and is the greatest football competition in the world, but we’ve thought for some time there should be limits on spending so that the league doesn’t go the way of European leagues where one or two clubs annually have little competition.
“Excitement depends on competition and is the most important component of the Premier League.
“We’ve seen many football clubs (including LFC previously) go down unsustainable paths. We have and will continue to focus our attention on investing wisely in the transfer market.”
A new independent regulator is to be in situ for the start of the 2024/25 season with the remit of ensuring the financial sustainability of the game in this country. The Premier League has its own set of rules and regulations around that subject, with the League’s Profit and Sustainability regulations containing potential sanctions for clubs that breach the allowable losses of £105m over a three-year rolling period. Last year UEFA introduced their new Financial Sustainability regulations which included a 70% squad cost rule which would see clubs limited to spending 70% of their revenue on transfer fees, wages and agents fees. Clubs are allowed until 2025 to reach that 70% figure, with a sliding scale reduced by 10% annually in the seasons in between in effect.
It remains to be seen whether the risk pays off for Boehly and Clearlake, and if, should Chelsea be in breach of P&S regulations, the Premier League, who have levelled more than 100 charges over alleged historical financial breaches against Manchester City, which City deny, as well as one against Everton, which the Toffees also deny, has the power to act as a serious deterrent in the future. Either way, until that time arrives then Henry and FSG have been left with little option other than to spend their way out, and that will only continue to drive the market higher.
