Chelsea have broken the British transfer record with the deadline signing of Enzo Fernandez from Benfica for an eye-watering £107m (€121m). The Argentinian midfielder had only been at the Portuguese giants since June 2022, when he joined them from River Plate for just £8.8m (€10m), giving them more than a massive €100m profit, in what for them is an astonishing piece of business.
The 22-year-old made a big impression when helping his country to lift the World Cup in Qatar shortly before Christmas, picking up the award for being the tournament’s best young player. The fee beats the £100m that Manchester City paid to Aston Villa for the services of England international Jack Grealish back in 2021, and takes the London club’s spending in the January transfer window beyond £300m, which incredibly is more money than all of the clubs of the four other major European leagues: Spain, Germany, Italy, and France, spent with their totals put together.
It also takes Chelsea’s overall spending since changing ownership last summer to almost £600m, after a consortium led by American billionaire investor Todd Boehly bought the club for £4.25bn, as a result of the previous incumbent, Roman Abramovich, being sanctioned over his links to Russian president, Vladimir Putin, following the illegal invasion of Ukraine.
Sixth most expensive player in history of the game
This remarkable deal for a player of so little experience in the European environment (he scored four goals in 29 appearances for the Primeira Liga side) is the joint-sixth most expensive of all-time, equalling the price Barcelona had to pay for the French superstar Antoine Griezmann, back in 2019.
The current top transfer fees paid and received are as follows:
Neymar, Barcelona to Paris St-Germain, for £200m, in 2017
Kylian Mbappe, Monaco to Paris St-Germain, for £166m, in 2017
Philippe Coutinho, Liverpool to Barcelona, for £142m, in 2018
Ousmane Dembele, Borussia Dortmund to Barcelona, for £135m, in 2017
Joao Felix, Benfica to Atletico Madrid, for £113m, in 2019
Antoine Griezmann, Atletico Madrid to Barcelona, for £107m, in 2019
Enzo Fernandez, Benfica to Chelsea, for £107m, in 2023
Fernandez will not be the most expensive player at Chelsea for the rest of this season at least however, as they have also, just for good measure, taken Joao Felix on loan from Atletico Madrid.
Those two are in addition to Noni Madueke, Mykhailo Mudryk, David Datro Fofana, Andrey Santos, Benoit Badiashile, and Malo Gusto, all signed on very lengthy contracts, as the Blues flex their ridiculously powerful financial muscle in an attempt to make a dash for the Champions League places. The currently sit 10th and are 10 points adrift of the fourth and final qualifying spot, so they have it all on.
Massive bonus payment heading to Buenos Aires
Fernandez will probably be pinching himself at the speed of his meteoric rise. The fee that River Plate received in the summer was regarded as a good bit of business, so to move again for ten times that amount is unbelievable. He had joined his former Argentine club as a six-year-old, before making his debut as a teenager in 2019. He left having played 53 times and contributing 12 goals and 10 assists. Sensibly the Buenos Aires based club inserted a clause whereby they would receive 25% of his next transfer fee.
Potential enhanced in Qatar
It does seem to happen after every world cup, that one young player emerges from the competition with their reputation hugely inflated and that seems to be the case here and with Chelsea adopting a policy of trying to sign up the world’s best young talent, alongside the funds to back it, then this move was always on the cards.
He showed some flashes of brilliance during Argentina’s successful month in the middle east, but without being disrespectful, at no point did he give the impression of being a £107m player. Chelsea are buying potential rather than the finished article, that is clear. He was not even a senior international until he made a late substitute appearance in a friendly against Honduras, in September, just a couple of months before the World Cup began, and his first start came in the final group game against Poland, although he did retain his place thereafter.
He may have been in the English Premier League six months earlier, but a proposed move to Wolverhampton Wanderers fell through and he went to Portugal instead.
Benfica hold their nerve
From Benfica’s point of view it represents amazingly good business and also demonstrates a terrific display of brinkmanship, as the Londoners had pursued the player throughout January and had made some very tempting offers, but the Portuguese held their nerve and were rewarded with an exceptional result. They will be disappointed not to have got more out of Fernandez in terms of success on the pitch, but the extraordinary profit made will more than placate any negative feelings.
Football’s gulf war
The financial gulf between England and the rest of Europe in terms of transfer spending has become more of a chasm, if January’s window is anything to go by that is. Premier League clubs spent somewhere in the region of a combined £650m in strengthening their squads, for the crucial final few months of the season. The leagues of Spain, Germany, Italy, and France spent less than £200m with all of their transactions rolled into one.
Pushing the boundaries of FFP
When it comes to splashing the cash, Chelsea have to adhere to the Premier League’s profit and sustainability rules just like everyone else. Additionally, as they regularly play in European competition, they must satisfy UEFA’s Financial Fair Play (FFP) regulations too.
With regards to the Premier League rules, clubs are permitted to make total losses of no more than £105m, over a three-year period. Any club that posts losses in excess of that figure could and should face penalties, which range from large fines, up to in the most blatant cases, points deductions.
UEFA allow spending of up to €5m (£4.4m) more than they earn, over a similar three-year term, although they will consent to that level being exceeded to a limit of €30m (£26.6m), provided that the club owner is willing to cover the difference in its entirety. In June last year there was an amendment, but it is being gradually introduced over once again, a three-year period. In this clubs’ spending on wages, transfers and agents’ fees is limited to 70% of their revenue, with accepted losses rising to €60m (£49.96m).
Risky plan could backfire
What Chelsea seem to be doing is taking advantage of a loophole in the Financial Fair Play (FFP) rules and handing out long contracts, in some cases up to eight years, and then paying the transfer fees in instalments, spread across the length of the contract. They also benefit from a ruling that in reverse circumstances, which is when they receive a transfer fee when selling a player, all of the profits are taken into the accounts immediately, even if that deal is also spread over instalments.
It is a high-risk strategy, as it could easily lead to players underperforming, knowing they have the long-term security of a fantastic contract that their employer are bound by. They could, if their temperament is suspect, simply settle for an easy life, deliver sub-standard performances, safe in the knowledge that their club has to continue to honour the contract, with little likelihood of any other team being willing to take the commitment over.
Finding loopholes does not always pay
The FFP system was in theory, introduced to reduce debt in the football industry. In reality however, it has seen it abused and many teams blatantly ignore the rulings, or find loopholes in which to get around it.
There have been some clubs that have suffered badly in the English game, with the most recent being Derby County. The famous old club is one of the founders members of professional football’s oldest league and are steeped in history, with wonderful support, but they were punished for mistakes at the very top, and placed into administration.
A massive points deduction saw them bravely battle, but ultimately fail to stay in their league, but also saw take-over bids fail, due in no small part to false claims made by two fellow league clubs, who callously took advantage of the situation by basically backing the struggling club into a corner to squeeze money out of them, which they had no rights to, either morally or legally. It was a shameful demonstration of greed by hypocritical owners, with little integrity.
It took a local businessman to step in at the 11th hour to rescue them from liquidation and thankfully, things are looking up as they seem to have turned a corner and are heading back in the right direction; but it should serve as an example to others to keep their finances in order.
Owners need to take responsibility
Profit is in simple terms revenue minus costs, and FFP was supposed to limit the amount of losses by encouraging spending that is within a club’s means. The attitudes of owners is where things can break down, with most taking a sensible approach and looking to break even, but others right at the top seem to totally disregard it and look to exploit every single loophole there is.
This is what Chelsea have taken advantage of by handing out multiple long-term contracts, spreading the cost in some cases, over a period of eight years. It is due to close in the summer, so the Londoners have acted now while they still could.
No “Dodgy” dealer hopefully
The ownership group at Stamford Bridge finally sealed their takeover in May 2022, fronted by the LA Dodgers part owner Todd Boehly, in what became the most expensive team transaction in professional sports. He is backed by investment firm Clearlake Capital, together with Swiss billionaire Hansjorg Wyss, and his Dodgers partner Mark Walter.
From one extreme to another
The opportunity to purchase the football club came about as a direct result of previous owner, Russian oligarch, Roman Abramovich, coming under increased scrutiny from the UK government, following Russia’s invasion of Ukraine, and his association with Vladimir Putin. He reluctantly announced at the beginning of March 2022 that he had put Chelsea up for sale, with as he put it “the best interest of the club in mind.”
However, just a week later, Downing Street officials stated that sanctions were being imposed on Abramovich’s assets, essentially freezing everything, which obviously at that point still included Chelsea Football Club. Suddenly one of the league’s richest clubs could not even sell a match ticket, or any of their merchandise. There were restrictions placed across the entire operation, which looking back now in light of the staggering transfer fee just paid out, seems ridiculous, as it was only around nine or ten months ago.
Policy could have knock-on effect
The huge gaping hole in the new Chelsea transfer policy is the obvious detrimental effect it will have on their own young players in their academy. Home-grown talent resonates with fans, but there seems little prospect of any breaking through at the West London club in the near, or even long term future, as all the fresh blood into the building are tied up on long contracts.
It will make youngsters think twice about signing on to a scholarship if they know there is no pathway; instead they may well be tempted elsewhere and the club could miss out on a hidden gem, right on their own doorstep. Decisions being taken high up, might not be beneficial in the long run, but time will tell.
Champions League a necessity
What does appear to be fundamental for the Chelsea plan to be successful, is the club’s continued participation in the Champions League, and the prospect of that becoming a reality for next season, currently looks to be extremely remote. Not only will they need to embark on a fabulous run, but they are also reliant upon as many as six team above them encountering significant drops in their own form.
Without that revenue the club will be under a lot of financial pressure, possibly having to suffer excessive losses to remove certain players from lengthy contracts. There is also the risk of serious injury and players suddenly become unsaleable.
Could all end in tears
There is a hint of arrogance in the way Chelsea’s new owners are conducting themselves, almost playing around with a new toy. For the club’s and their supporters sake, it is to be hoped they don’t get fed up along the way and chuck their toys out of the pram.