The Right Man For Chelsea

WSJ: How Roberto Di Matteo Turned Chelsea Into a Champions League Winner

Shortly after leading Chelsea to the Champions League title Saturday, a feat that required pragmatism and diplomacy, Roberto Di Matteo was engaged in some more major mental acrobatics. Would he be staying on as Chelsea's manager?

"I don't know," he said. "It's a decision for the club to make."

 

Does he want to stay?

"Right now, I just want to go on holiday," he said. "It has been a very exhausting three months."

So what did the Chelsea owner, Russian billionaire Roman Abramovich, say when he embraced him as Di Matteo went up to collect the trophy? "I don't discuss those conversations in public," he said. "But he looked very happy."

Those three questions in one form or another were thrown at Di Matteo by a variety of media organizations in the immediate aftermath of Chelsea's victory on penalty kicks over Bayern Munich. And each time, Chelsea's interim first-team coach, to use his official title, remained coy and deflected the issue. Given what Di Matteo's club has achieved in the past 77 days, it's hard to say what's more bizarre: the fact that the club has not offered him the job on a permanent basis or the fact that he has not publicly expressed a desire to stay.

When Di Matteo replaced Andre Villas-Boas in March, moving up from the position of assistant coach, Chelsea was fifth in the Premier League and staring down elimination in both the FA Cup and especially the Champions League, where it had been pummeled 3-1 by Napoli in the Round of 16.

The media told tales of a sharply divided locker room, split between a declining old guard running on fumes and a cadre of underachieving younger players. The squad looked ill-assorted, and the play appeared inconsistent. Abramovich, who in the previous nine years had spent roughly $3 billion on Chelsea, seemed to alternate between boredom and unhappiness.

 

The season looked to be a write-off. The squad needed to be blown up and rebuilt, even though Chelsea had racked up losses in excess of half a billion dollars in the past five seasons.

Chelsea has lost just three games since then—as many defeats as it registered in the three weeks prior to Villas-Boas' removal. More important, it won both the FA Cup and the Champions League, and it did so while displaying a level of unity, spirit and grit few believed the club possessed.

Abramovich doesn't grant interviews, but the story emanating from his entourage is that he was smitten with the idea of owning a soccer club back in 2002, when he watched a Champions League game between Manchester United and Real Madrid. This prompted him to buy Chelsea in the summer of 2003. Since then, winning the most important trophy in club soccer has been something of a holy grail. Now he has finally attained his goal. Would he reward the guy who helped his team over the finish line?

This was as far as Chelsea chairman Bruce Beck would go in discussing the organization's managerial future: "I think now, in the next few weeks, we have to sit down and think about doing what's best for Chelsea... and we will. Roberto [Di Matteo] is certainly in the mix, and he's done a great job for us. He has to have serious consideration."

 

Chelsea has had five permanent managers, plus three interim bosses, in the nine seasons Abramovich has owned the club. In that time, Chelsea has won three league titles, four FA Cups, two League Cups and now the Champions League. And yet, except for a spell under Jose Mourinho and a shorter stint under Carlo Ancelotti, you often felt as if the manager was looking over his shoulder.

Abramovich's behavior is akin to those men with commitment issues who move on from girlfriend to girlfriend because the next one could be the one. Speculation is now rife that he covets Pep Guardiola, who left Barcelona this month after four seasons in which he won three league titles and two Champions League crowns. Guardiola has said he is going on sabbatical and won't be coaching for at least a year. You wonder if his unattainability only makes him even more desirable.

But Chelsea need a coach for next season. And not only does Di Matteo have strong ties to the cub, but less than two years ago, he was spoken of as an up-and-comer destined for big things. Born and raised in Switzerland to Italian parents, he played a starring role in the Chelsea midfield between 1996 and 2000, helping the club win two FA Cups and a League Cup. A horrific triple leg fracture effectively ended his career at the age of 30.

Unlike most ex-pros, he didn't go straight to the golf course or into coaching upon retirement. Instead, Di Matteo went back to school, pursuing a degree in business administration. When he did go into coaching, in 2008, he was an instant hit. He took over Milton Keynes Dons, newly promoted to League 1, the third tier of the English game, and finished in third place. That earned him a move to West Bromwich Albion, a level above. In his first season, he finished second, winning promotion to the Premier League. The team started brightly the following season, but he was let go in February 2011 after a mid-season slump.

 

He could have held out for another job, but when Chelsea asked him to work alongside Villas-Boas last summer, he accepted. He did not see working alongside a less experienced manager seven years his junior as a demotion, but rather believed that the experience of working at a big club in a coaching capacity would enhance his skill set.

His record at Chelsea speaks for itself. And what has been overlooked by most has been his pragmatism. In terms of coaching philosophy, his teams at MK Dons and West Brom played an open, attacking style. But at Chelsea, particularly in the Champions League, he has opted for a more conservative, defend-and-counter approach, which proved equally successful.

"I just did what I thought was best considering the players we have and the situation we're in," Di Matteo said Saturday. Given that he was put in charge without the benefit of a preseason camp, and with a squad assembled poorly by others, you can probably let the lack of style slide.

His critics may point out that Chelsea was lucky against Bayern. The Germans dominated much of the game and missed a series of chances, including a penalty. But Bayern coach Jupp Heynckes, for one, thinks it's an open-and-shut case. "If I was Abramovich, I'd give Di Matteo a three-year contract right now, no question about it," he said. "Yes, Chelsea rode its luck against us. But who would have thought it would even be in this position a few months ago?"

Maybe Heynckes feels some sympathy for Di Matteo's plight, given his own experience. Fourteen years ago, his Real Madrid team won the Champions League for the first time in 32 seasons. He was still fired eight days later.

Or perhaps he's just stating the obvious. Given Di Matteo's track record, given his history at the club, given the fact that there isn't exactly a platoon of managerial geniuses beating a path to Abramovich's door right now, the answer the club is looking for is right under its nose.

—Gabriele Marcotti is the world soccer columnist for The Times of London and a regular broadcaster for the BBC.

 

 

A Dream Match, This Is Not

There's no getting away from it: By recent standards, Saturday's UEFA Champions League final between Bayern Munich and Chelsea looks like a bit of a clunker.

For the past four years, the world's foremost tournament for pro soccer clubs has spoiled us with a parade of marquee-topping final match-ups. There was Barcelona's shredding of Manchester United, Inter Milan's triumph under Jose Mourinho, Barcelona's other shredding of Manchester United and United's penalty-shootout stunner in Moscow.

What made each of those duels so epic wasn't just the high stakes and storied clubs, but the knowledge that they unquestionably represented a meeting between the two pre-eminent powers on the planet.

Next to those classic jousts, this year's contest looks lackluster. The TV announcers will do their best to lather us up, but there is no escaping the fact that these teams are no one's idea of soccer's elite.

Chelsea just finished sixth in the Premier League, its lowest position in a decade, while Bayern got blitzed 5-2 by Borussia Dortmund in last week's German Cup final. Even the underlying England-Germany rivalry, which could turn a game of Pictionary into a generational grudge match, hasn't gotten anyone fired up.

It doesn't help that Chelsea and Bayern Munich are so loathed within their own countries. English soccer fans see Chelsea as a nouveau-riche upstart, while Germans refer to Bayern Munich as "FC Hollywood," which sounds like a compliment, but actually means the club's players are a bunch of entitled, egotistic monsters.

 

The result: Most fans outside of Munich and southwest London will be rooting against their country's representatives Saturday, dousing the usual explosion of patriotic fervor with a bucket of ice-cold apathy.

That is not to say this final is devoid of intrigue. It may lack the greatest-team-on-Earth narrative of the past few seasons, but this throwdown in Munich has its subplots.

Unlike most elite clubs, the star attraction on the Bayern Munich team isn't a player, but a double act. "Robbery," as Arjen Robben and Franck Ribery are jointly known, are the speedy wingers who have dazzled the soccer world and led Bayern to its second Champions final in three seasons.

Wingers were thought to be a dying breed in European soccer. For years, teams customarily used two wingers, but they've become a rare species as clubs have focused on attacking down the middle of the field. In last year's Champions League, 35% of goals from open play came from a forward or diagonal pass into the area. Crosses from the wings accounted for just 22%.

 

Now, all the action in centerfield is producing a side effect: The middle of the pitch has become congested, leaving spaces out wide for wingers to exploit. The number of goals from crosses in this year's tournament has jumped to 30%—and no team has responded to this resurgence better than Bayern. Ribery's four assists in the knockout stage is tops in the tournament, while Robben has four goals in five games since the group phase.

Meanwhile, Chelsea's unlikely run to the final has overcome the experts, a coaching change, a seemingly unwinnable semifinal against magnificent Barcelona and a geriatric roster.

Still, there is a suspicion that Chelsea is about to face its most awkward opponent in Saturday's final. And we're not talking about Bayern Munich.

Five years since leaving Chelsea, Jose Mourinho still looms heavily over Stamford Bridge. Chelsea's lack of success in the Champions League since his departure feeds the nagging idea that the club will never be as good without him, as does the fact that his lingering influence on this team still remains so visible: Seven of Chelsea's expected starters were recruited by Mourinho.

Which is why Chelsea may have more riding on this match than Bayern. It isn't just that this may be a final shot at glory for an increasingly creaky team of veterans. By winning the one trophy Mourinho failed to deliver in his Chelsea tenure, his old club could finally step out of his shadow.

Write to Jonathan Clegg

 

 

Champions League Final Also Tests Financial Muscle

COLOGNE, Germany—There is more at stake in Saturday's Champions League final between Bayern Munich and Chelsea than the title. In it, the social market economy goes head-to-head with Anglo-Saxon capitalism.

For the world of football, Bayern symbolizes the solid business man, the German middle class. At €320 million ($406 million) annually, the team places fourth in Europe by revenue. Then there is Chelsea, number six in terms of revenue, behind Bayern by €70 million, but with other financial supports. Billionaire owner Roman Abramovich pumps money into the team regularly at a rate of about €90 million euros a year, according to figures from consultancy Deloitte.

The team has personnel costs of €211.7 million, most of it going on players' wages. The personnel costs/revenue ratio is 0.84, according to consulting firm Deloitte. "That is exceptionally high," says Stefan Ludwig, director of the Sports Business Group at Deloitte Germany.

Bayern comes across as modest in comparison: about €156.3 million goes on personnel, for a 0.49 ratio. If money could score goals, the London team is the clear favorite.

But success is a question of drive, and the pressure is on both clubs. Bayern was twice defeated in the German championship by Borussia Dortmund and got creamed 5-2 by Dortmund last weekend in the German cup final. The European final is the last chance to redeem an otherwise disappointing season.

The heat is also on Chelsea. It did win a national competition with the FA Cup this season, but Mr. Abramovich is itching for a European triumph that has so far eluded him.

On top of that, at sixth place in the Premier League, Chelsea missed its chance to qualify for the coming round of the Champions League. Unlike Bayern, it can only secure a spot in the competition as defending champion. And even Chelsea wouldn't want to pass up the millions to be gained by playing in the Champions League. Last year's winner Barcelona earned €51 million through performance-related payments and income from the competition's TV pool.

Such income will gain importance for Chelsea, whose business model isn'tsustainable because of new Financial Fair Play regulations from the European sport's governing body, Uefa. Under FFP, clubs are limited to €45 million in losses in the current and coming seasons combined. Above that, they risk penalties, including being thrown out of a league. The limit will narrow in coming years.

Excluding transfer payments, Chelsea had losses in the 2010/11 season of €53.9 million, up from €46.3 million in the previous season. Including transfers, the deficit was €86.7 million. "The limit set by Uefa would be exceeded in one season alone," Mr. Ludwig said.

The goal is to stop owners funneling in their own funds to compensate for losses. Whether FFP could survive a lawsuit at the European level is questionable, but the point is clear.

"It is justified to establish a level playing field," says sports economist Joern Quitzau. "It can't be that clubs amass losses to the point of collapse." Mr. Quitzau nevertheless doubts whether everyone will play fair, and anticipates loopholes. "In U.S. leagues that restrict salaries, stars are showered with advertising contracts," he notes.

Mr. Quitzau thinks it unlikely Uefa would banish a club from the Champions League. "There'll be a way to reach agreement, a horse-trade," he says, not unlike the European monetary union, where members regularly exceed deficit limits. "Still, there's evidence of a disciplining tendency."

Bayern has nothing to fear. "Behind the success lie years of work—the club has been profitable for years," says Philipp Kupfer, football expert at sports marketing consultancy Sport+Markt. Last season Bayern had a €1.3 million after-tax profit, it has said. Liabilities, many related to building the Allianz Arena, fell to €177.7 million from €242.6 million as of June 30, 2011.

Chelsea has made no move to cut debt. Its liabilities at end-June exceeded €900 million, though most sit with the parent company. The club itself had €101.9 million in debt, according to Deloitte.

 

Bayern should have paid off the costs associated with its stadium by 2020 at the latest, allowing the club to become the "richest club in the world," according to club President Uli Hoeness.

Investments in the Allianz Arena are already paying off. "The new stadium has brought Bayern a jump in revenue of about €40 million, essentially due to income from additional executive boxes and stadium naming rights," Mr. Ludwig at Deloitte Germany said.

Yet ticket prices for Munich are moderate in comparison. Although the Allianz Arena holds 69,000 spectators—27,000 more than Chelsea's Stamford Bridge—the London club earns higher ticket income. For every day there's a game, the two teams take in roughly the same amount. At last count, annual ticket income for London was €74.7 million compared with €71.8 million in Munich.

Chelsea is looking to increase that. Mr. Abramovich has his eye on a famous old power plant on the banks of the Thames, Battersea Power Station, which he hopes to incorporate into a 60,000-seat stadium.

 

Elsewhere, Bayern Munich and the Bundesliga—Germany's top soccer league—will make headway with its recent deal to sell national TV rights, which will bring in €628 million annually from the season after next, 50% more than now. That doesn't match the English Premier League, where rights for TV broadcasting bring in an average €740 million a season. And the Brits could soon move beyond that. With the auction of national media rights coming up, competing bidders are likely to lift the figure.

The Premier League is unbeatable when it comes to marketing abroad. In the coming rights period until 2015, the Bundesliga on average will get €70 million a year, about one-sixth of what the English teams take in with international TV marketing. That is reflected in the teams. While Bayern's TV revenue was most recently €71.8 million, Chelsea reached €112.3 million, according to Deloitte.

 

Thanks to its presence in free TV, however, the Bundesliga draws advertisers. In sales with sponsors and other revenue such as merchandise, Bayern is far ahead of Chelsea: €177.7 million to €62.8 million in the last season, according to Deloitte's figures.

According to Sport+Markt, Bayern has 9.4 million national fans compared with 1.7 million for Chelsea. "At home, Chelsea is in the shadow of the more successful clubs like Manchester United and previous [league title] record-holder Liverpool," says Mr. Kupfer. This reflects the lack of tradition: three of Chelsea's total of four league championships have come since Mr. Abramovich stepped in.

Rich investors can't leave English football alone, and with their millions they can help drive clubs like Chelsea and Manchester City to titles. But in Germany the so-called 50+1 rule gives clubs majority ownership, with the exception of Wolfsburg, which is controlled by Volkswagen AG and Leverkusen, controlled by Bayer AG, BAYN 0.00% as there is an exception made for companies that were financially active in a club for 20 years before 1999.

"There's less inequality in the Bundesliga than in England," says sports economist Mr. Quitzau.

The English system is taking its toll. In 2010, Portsmouth became the first club in the Premier League to file for bankruptcy protection. And big clubs continue to pursue mega-deals. According to press reports Chelsea wants to bring Argentine striker Gonzalo Higuain of Real Madrid to London for a transfer fee of €40 million.

That's about as much as Bayern has spent to buy new players all season. Bayern lost €100 million in the transfer market over the past three years, while Chelsea lost twice that amount.

"British football has proven to be tough, and keeps developing," says Mr. Quitzau. "The Anglo-Saxon model for the foreseeable future will continue to be successful. There is so much liquidity, there is always someone interested in spending his money."

Our bet for which financial model will triumph? Undecided, with extra time.