Money buys you success in football and Chelsea are a prime example

Chelsea now operate under a licence from the UK government. They were one of Roman Abramovich’s assets frozen on Thursday.

What the future holds for Chelsea it is too early to say. The past will always be divided into Abramovich and pre-Abramovich years.

Whatever you think about him as a person and how he made his fortune, I hope you will understand why I still think it is worth dissecting what he did at Chelsea because of what it tells us generally about why football clubs become successful.

Abramovich bought Chelsea in July 2003. Since then Chelsea have won 17 major trophies in 19 seasons. Previously they had won eight major trophies in 98 seasons.

The reason Chelsea became so successful is simply that Abramovich pumped money in to spend on players, particularly in the early years. As Stefan Szymanski wrote in a book called Money and Football: “Wage spending dominates in any explanation of the relative status of clubs over time.”

For Chelsea, the relationship between wages and results has been particularly close. As we go into it bear in mind that when comparing pay and performance there is always likely to be some element of regression to the mean – a movement away from extremities.

If a club have the highest payroll in the Premier League they can finish first or lower. The average finishing position of such clubs is likely to be lower than 1.0. If a club have the lowest payroll in the Premier League they can finish 20th or higher. The average finishing position of such clubs is likely to be higher than 20.0.

In the two seasons before Abramovich took over, Chelsea ranked fourth in the Premier League for wages. Their average position in the Premier League was 5.0. In each of the next eight seasons Chelsea ranked first in the Premier League for wages. Their average position in the Premier League was 1.8.

Only in one of the following nine seasons did Chelsea rank first for wages. In the other seasons they ranked second, third or fourth. They were overtaken at times by one, two or all three of Manchester City, Manchester United and Liverpool. Across those nine seasons Chelsea’s average wages rank was 2.8. Their average position in the Premier League was 4.0.

Abramovich’s Chelsea have won the Premier League five times. In four of those title-winning seasons they also ranked first for wages – when Jose Mourinho was manager in 2004-05 and 2005-06, when Carlo Ancelotti was manager in 2009-10 and when Mourinho was manager again in 2014-15. Antonio Conte was the only Chelsea manager to win the Premier League without having the highest-paid squad – that was in 2016-17 when Chelsea ranked third for wages.

Abramovich was not the first to show that money can buy success in English football, as it can in other football.

Arsenal from the late 1920s through the 1930s then Sunderland in the late 1940s were dubbed the Bank of England club because of lavish expenditure on transfer fees.

Arsenal’s spending helped to bring them their first trophies – the FA Cup in 1930 and 1936, the First Division championship in 1931, 1933, 1934, 1935 and 1938. Sunderland had won trophies before. A splurge on spending after the second world war enabled them to rise again from 20th in the First Division to third in season 1949-50. They have never finished as high since. Relative to other clubs, they have probably never spent as much since.

Jack Walker was a steel magnate who in January 1991 bought his hometown club of Blackburn Rovers. They had passed the previous quarter-century in the Second and Third Divisions. Then Walker funded loftier ambitions. Within three seasons Blackburn were in the Premier League. Within five seasons they had won it.

But no one had bankrolled a club as extravagantly as Abramovich.

Szymanski wrote elsewhere in Money and Football: “How much you spend on the team doesn’t matter in an absolute sense when it comes to winning. What matters is that you spend more than your rivals.”

I analysed the accounts of all 20 Premier League clubs in each season from 2001-02 to 2019-20. Some accounts for last season have not been published yet. No accounts for this season can be published until it is over.

I expressed every club’s payroll for a season as a percentage of the total for that season. As there were 20 clubs each season, the average was five per cent.

Let us look at those that were furthest above the average. The five highest percentages were paid by Chelsea in Abramovich’s first five seasons, 2003-04 to 2007-08. They were between 14.5 and 13.4 per cent. Three of the next five highest percentages were paid by Chelsea in the following three seasons, 2008-09 to 2010-11. They were between 12.6 and 12.1 per cent.

If you are paying players that much you should have a good team and they should be winning trophies. Clubs offering players high wages will sign some who turn out to be a success and some who turn out to be a failure. So will clubs who can only offer low wages. The successes of big-spending clubs will be better than the successes of small-spending clubs. And so will the failures.

As Abramovich’s cash turned Chelsea into one of the leading clubs in Europe, their earnings grew.

As Szymanski explained in yet another quote from Money and Football: “Improving performance means signing better players, which means investment now… Even if the strategy is successful, the club can only expect that its revenue will grow to match expenditure when it reaches the top. While it is in the process of ascent, revenues will remain low, so there is a financial bridge that someone needs to build, without any expectation of ever getting the money back.”

Chelsea evolved into a club with the earnings as well as the outgoings of one of the leading clubs in the world. What happens now is anyone’s guess.

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