How much is Chelsea’s squad really worth?

Results on the pitch in the second full season of Todd Boehly and Clearlake Capital’s ownership of Chelsea have continued to disappoint.

But what about their fortunes off it? The principles underpinning the divisive strategy implemented by Chelsea’s owners since January 2023 are economic as well as sporting in nature: to build a financial and footballing success story by sanctioning unprecedented transfer spending on young players committed to ultra-long contracts, effectively turning a Premier League squad into a human investment portfolio.

One way of tracking the trajectory of the Boehly-Clearlake experiment is through Chelsea’s financial results, which tell a worrying story; essentially, the club only mitigated heavy losses and narrowly complied with the Premier League’s profitability and sustainability regulations (PSR) in 2022-23 by effectively selling two hotels on the Stamford Bridge site to themselves for £76.5million ($96m at current rates) — and that transaction is still awaiting an official sign-off from the Premier League.

The problem with this method is that, since clubs publish their accounts almost a year after the fact, it is always looking into the recent past.

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Another way of gauging Chelsea’s financial health is to assess the value of their squad, including the many players they have signed relative to the transfer fees that brought them to Stamford Bridge.

This is where the CIES Football Observatory comes in. Founded in 2005 by Dr Raffaele Poli and Dr Loic Ravenel as a research group within the International Centre for Sports Studies in Neuchatel, Switzerland, it specialises in the statistical analysis of football — and has become best known for its approach to estimating the transfer values of footballers.

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Poli and Ravenel brought scientific rigour to the transfer market; their statistical model, built in 2013, comprises more than 10,000 fee-paying transfers and can be used to explain the value of transfers or estimate the transfer values of players before deals happen.

“We can explain about 85 per cent of the differences in prices paid between players,” Poli tells The Athletic. “That’s huge — 12 years ago when we started, we could explain around 70 per cent. It’s not because the market has more rationality, but because we found new variables and fine-tuned the model.

“We are still working on it but it’s quite strong and reliable.”

Cole Palmer’s valuation has soared after a breakthrough season (Nick Potts/PA Images via Getty Images)

Player age and remaining contract length are, unsurprisingly, two of the biggest determining factors in transfer value.

“Age is a linear regression — the younger you are, the better it is, all other things being equal — while contract length is logarithmic,” Poli explains. “That means from four to three years, for example, you lose less value than from two years to one year or one year to six months.”

At the other end of the scale, players get no boost to their transfer value in the model for having longer than four years remaining on their contracts — bad news for the Boehly-Clearlake signings who are committed to Chelsea for the rest of the decade.

There are many other variables in the CIES model, including:

A player’s experience (minutes played) in the 24 months preceding a transfer, weighted by the sporting level of the club and league
A player’s progression in the 12 months preceding a transfer relative to the previous 12 months
Number of goals scored in the previous 24 months, weighted by the sporting level of the club and league
Number of assists provided in the previous 12 months, weighted by the sporting level of the club and league
Number of accurate passes in the previous 12 months, weighted by the sporting level of the club and league
Number of successful dribbles in the previous 12 months, weighted by the sporting level of the club and league
A player’s full international experience since the start of their career, weighted by the level of national team represented
The economic level of the buying club
The average value of the 100 largest transfer fees completed on a global level during each of the previous four transfer windows (to take inflation into account).

Poli knows the CIES model cannot account for everything in a transfer market dictated by humans. “There are some residuals,” he says. “If there were no residuals, our approach would be worthless because the market would have perfect rationality.”

Residuals are factors that are not statistically quantifiable: some examples include a player’s relationship with team-mates or his coach, a club’s indebtedness or fear of relegation or, in Chelsea’s case, deciding they simply could not allow Moises Caicedo, the midfielder they had publicly pursued all of last summer, to join rivals Liverpool regardless of the cost.

Poli and Ravenel’s work has garnered credibility within the industry; CIES player valuations are regularly used by clubs and agents for transfer and contract negotiations, and referenced in club takeovers and even in cases that reach the Court of Arbitration for Sport (CAS). Findings are also regularly made public on its website.

CIES has provided The Athletic with valuations of every player in Chelsea’s first-team squad, up to date as of April 25, 2024. The valuations have been converted from euros to British pound sterling in the table below, and compared to the reported initial transfer fees for each player (with the exceptions of Cobham academy graduates, whose valuations are pure profit):

Some of these valuations may be surprising.

Enzo Fernandez has almost entirely retained a transfer value that many felt was excessive when Chelsea prised him from Benfica on the final day of the January 2023 transfer window. His performances have fluctuated and been hampered by injury in recent months. He has undergone surgery on a hernia issue and will miss the rest of the season, but he had played almost every match for his new club and been a consistent starter in a World Cup-winning Argentina side.

At 23, Fernandez’s youth also works in his favour when it comes to determining his transfer value — as is the case for many of the other Boehly-Clearlake signings.

Cole Palmer’s value has predictably sky-rocketed in light of his spectacular Premier League breakthrough campaign. Nicolas Jackson and Axel Disasi have also seen their transfer values benefit from being in the top five for Premier League minutes played in Mauricio Pochettino’s squad in the 2023-24 season. Caicedo is a different story, though that is more a reflection of his gargantuan transfer fee than his performances since joining Chelsea.

Conor Gallagher’s value would almost certainly be significantly higher if he were not about to enter the final year of his contract. If no extension is agreed, £46.3million is in line with the level of transfer offer that would satisfy Chelsea this summer.

Raheem Sterling and Mykhailo Mudryk retaining values similar to the transfer fees Chelsea paid for them is likely to be controversial given their underwhelming individual seasons but both benefit from the fact that the CIES model prices in the positional premium that favours attackers, and neither have had their availability seriously impacted by injuries.

Mudryk and Sterling have retained their value in CIES’ model (Chris Lee – Chelsea FC/Chelsea FC via Getty Images)

The same cannot be said for Christopher Nkunku, Wesley Fofana, Ben Chilwell, Romeo Lavia and Carney Chukwuemeka, all of whom have depreciated in value while on the treatment table. Reece James, who was emerging as one of the world’s best right-backs before enduring two injury-plagued seasons, would be worth a lot more than £25.7million if he had been playing regularly for Chelsea.

Overall, the fact that CIES’ valuations indicate this squad is worth £57.5million more than the estimated transfer outlay required to assemble it might encourage the view that, on a financial level at least, the Boehly-Clearlake strategy of investing in young talent is working.

But that is not the whole story.

More than £130million of that squad value is accounted for by Cobham academy graduates who cost nothing to acquire. If they are removed and only the CIES valuations of Chelsea’s signings are examined, the picture is very different:

According to the CIES model, there is almost £80million worth of depreciation in transfer value of Chelsea’s signings, the vast majority of which were made by the current owners. Even with notable success stories — such as Palmer, Jackson and Disasi — to persist with the investment portfolio analogy, more lines are going down than up.

This is only a snapshot in time. Chelsea are not planning to sell most of these players anytime soon, and Palmer’s stratospheric rise is a reminder that transfer values can change very quickly. It might only require better injury luck in the cases of James, Nkunku, Fofana, Chilwell, Lavia and Chukwuemeka for the overall picture to look much better in 12 months.

On the other hand, it could also look much worse if Chelsea do end up selling academy graduates Gallagher and Trevoh Chalobah this summer for short-term accounting gain, and not enough of the Boehly-Clearlake signings trend upwards next season to compensate for the loss of squad value.

In any case, it is a stark illustration of the fact that Chelsea’s investment portfolio is faring no better than their football team.

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(Top photo: Marc Atkins/Getty Images)