The transfer window will have been active for Chelsea: in one month the English club has spent more than 300 million euros. Todd Boehly’s club offered Argentinian midfielder Enzo Fernandez in the last moments of the transfer market. Luc Arrondel, research director at the CNRS, specializing in football economics, explains these investments by the London club and more generally in the Premier League transfer window.
How to analyze this very active transfer window on the Chelsea side?
The first factor is explained with the growth of Premier League revenues. It is a very rich championship compared to the others, it is practically twice the turnover of the other leagues. The football economy in England is growing. The second factor is explained by Todd Boehly’s promises when buying the club. There was debt and then there was also the commitment to invest in the club and in the players. So the ambitions of the new owner are respected for the moment with this amount spent during the winter market.
We talk a lot about TV rights and sponsors, the possibility of offering very long-term contracts to players is also an important weapon?
Yes, that’s another problem. There are TV rights which explain the significant investment of Americans in the leagues in Europe. International rights will exceed domestic revenues, this is the first aspect. For the big clubs, they can rely on the ever-effective sponsorship revenue. Long-term contracts are another problem. Chelsea can spend, but you have to get into the nails of Financial Fair Play. Signing long contracts spreads the cost of transfers over the length of the contract. We can find other justifications such as signing up-and-coming players to avoid signing for another club. The players recruited this winter are young.
It makes it possible to adapt with the rules of financial fair play…
It remains under the regulation of national legislation. There is a real difference if we compare PSG and Chelsea for example. Chelsea are not restricted with a contract of less than five years. It allows you to recruit people and spread out the payment, it’s a great advantage. For the FPF, this poses a problem and there is a real problem of fairness. Chelsea have recruited as many as all the other leagues so we can say that the mass is said.
Todd Boehly wants a satellite club to develop his young players…
There are two trends, the first is the arrival of new shareholders in football. Especially investment funds. The second trend is the proliferation of timeshares. There are several logics: a financial logic of risk diversification or a training logic. Chelsea find themselves with a squad of 33 players, this idea could satisfy everyone. Buying another club or having a partnership can be interesting for Todd Boehly. I think Chelsea shareholders have the means to buy another club. After on the side of England, it also allows to create stronger competition. Chelsea have a real sporting ambition to set up a competitive team, we will see if Todd Boehly will succeed like in the United States.
Football always pushes the limits, the transfer windows are linked and the amounts fly away…
A lot of people think there is a bubble around football and it is going to burst. We never said that. The English football economy is seeing such growth in income, even if their debt is high, transfers follow. They recovered very quickly from COVID. We have resumed pre-COVID exchanges. We could fear Brexit but ultimately the effects are limited. It feels like the gap between the Premier League and other leagues is once again widening. And I think that corresponds to the commercial policy of the PL, they have managed to sell extremely well, especially in the USA. It’s more than the MLS in the USA. This is one of the factors that can explain the arrival of American billionaires in European football.
Is it different when we see funds investing in France?
Yes, it’s different, by investing in PL we are in the elite championship with very high visibility. In Ligue 1, it depends in which club you want to invest. But the other question is whether Ligue 1 is still a major league. I leave a question mark. On the one hand you have a League that makes profits on its current operations before COVID, does not generate much profit because they buy a lot on the transfer market. And in Ligue 1, it’s the opposite. Sporting logic is completely the opposite. Afterwards what is interesting is to see these Americans arriving in Europe with American culture. Is it compatible with European culture? That’s the big question.
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