Skip to main content

Why Chelsea can splash out

When Chelsea’s spending total for the summer is in excess of £160 million, you can understand why some people might be asking how the club can afford all this in an era of Financial Fair Play. So far they have brought in only £6.9 million from the loan fee which saw Romelu Lukaku return to Inter Milan.

Chelsea’s last financial results showed they made a loss of £145.6 million for the year up to June 30 2021 and that their wage bill was one of the highest in the game at £333 million.

However, football finance expert Kieran Maguire isn’t worried. “I’m actually pretty relaxed about Chelsea,” he tells The Athletic. “I know they’ve made big losses in the past but they can say COVID had an impact on a couple of the seasons. They have been selling players far more than anyone else, they are the biggest generators of revenue (example of this provided by football business Twitter account Swiss Ramble, who explained that in five years up to 2020, Chelsea made £434 million from sales. The next highest were Liverpool at £276 million and Everton at £208 million).

However, Maguire adds: “Historically while Chelsea are the biggest spenders in the Premier League, they have also generated the most money from player sales over the years.   When you’re signing players, you are spreading the cost over the length of the contract. So if Chelsea spend £300 million this summer, the amortised cost per year is probably going to only be around £50-£60 million.”

Comments

Popular posts from this blog

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...

A poor financial record, but new hope at Everton

I recently saw an amusing video online in which a group of Everton fans were rebuked in jest for being hopeful.  Football fans in general tend to swing between excessive optimism and excessive pessimism, but for many it seems that moaning is in their bloodstream (Spurs fans probably take the trophy).  However, Everton fans have had plenty to moan about on and off the pitch.   Let’s hope that a new era is about to begin for this grand old club. Everton’s 2023/24 financial results covered a fairly momentous season, when they ended up 15th in the Premier League, though they would finished three places higher if they had not received an 8-point deduction for breaching the Premier League’s Profitability and Sustainability Regulations (PSR). It was a worrying time for Everton fans, as the club faced a “perfect storm” of issues, including large financial losses, an ever increasing debt burden, a challenging stadium build and the tortuous sale of the club. There were eve...