Most of the focus is on how much Chelsea has to gain by selling Eden Hazard. But what of the cash they are losing by keeping him?
Opportunity cost is a term in economics that means the money lost by not making a decision at a certain interval. Eden Hazard is the perfect example of it for Chelsea and how it can be a gamble.
The Telegraph says Chelsea has upped their asking price for Eden Hazard from £100 million to £130 million. After the season that Eden Hazard has had, and with the transfer ban still in play, that increase in price seems understandable.
The consensus last season after the World Cup was that Hazard was worth closer to £200 million. Part of why Antonio Conte was replaced by Maurizio Sarri was a belief that it would convince Hazard to stay and extend his contract. He stayed, but he did not extend.
Now, if Hazard was worth £200 million a year ago and is worth £130 million now, it means opportunity cost for this season was £70 million. Given how much Hazard gave to the club this season on the pitch, that £70 million price tag for the year seems well worth it.
Things get tricky, however, when considering the next £130 million. Hazard already contributed roughly half of the team’s goal involvements this season. The managerial switch can in part be linked to keeping Hazard this year too. So keeping Hazard and switching managers cost £70 million, saw Chelsea rise two spots in the table, but saw only two more points gained and roughly the same amount of goals scored.
So if Chelsea was to hold on to Hazard next season, they are gambling two things. The first is that he will change his mind and extend which makes all this a moot point. The second is that he will be worth even more to Chelsea next season than this one considering they are valuing his opportunity cost even higher. In short, Chelsea would be saying they would be willing for Hazard to leave for free if he performed even better next season.
Of course the transfer ban and Callum Hudson-Odoi’s injury muddles things. As things stand, if Chelsea loses Hazard, they will not have a replacement in the market available. Hudson-Odoi will not be fit enough until well into the season. Christian Pulisic could cover, but that means an aging Willian or Pedro on the other side.
Chelsea already left £70 million on the table by not selling Hazard last summer. Would they be willing to risk another £130 million this season in hopes of an extension or an even higher value contribution? That would be pretty unlikely and very unlike this current Chelsea board.
Yes, the ban means that cash cannot be used right away and Chelsea would have to cope with the on field loss. But in the risks versus the rewards, the board will most likely decide that the balance is off. Real Madrid will surely haggle the £130 million price, perhaps back down to the £100 million that was previously reported (which is still higher than what they want to pay).
If it comes down to it, the board may just need to accept what they can get for Hazard rather than pay the opportunity cost to keep him and let him leave for free. This is a saga that will drag out as the club weighs their options of risk versus reward.