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Chelsea loss prompts FFP concerns

Chelsea’s latest accounts have revealed a £90.1 million annual loss, raising serious doubts over their ability to comply with the Premier League’s financial rules.

The club, who were taken over by the Todd Boehly-Clearlake Capital consortium in May 2022, lost £121.4 million in 2021-22 and, after a transfer spree and with a soaring wage bill, are facing another financial deficit for this season, when they will have no money coming in from the Champions League. The Premier League limits clubs to losing £105 million over three years but spending on academies, stadiums and women’s football is exempt.

The £90.1 million loss was made despite Chelsea raising £142 million from player sales and £83 million from reaching the Champions League quarter-finals last season. Another issue for Chelsea is that the impact of the 2019-20 season, when they posted a £36 million profit, drops off for their next Profit and Sustainability Rule (PSR) calculation.

The accounts of Chelsea’s holding company, Blue Co, reveal that since last season, 22 players have been signed “at an initial cost of £454.8 million” with ten sold at a profit of £48.2 million. Although the transfer fees can be spread out across the length of the players’ contracts — and some of Chelsea’s are as long as eight years — their wages cannot.

Blue Co’s wage bill for 2022-23 was £441.9 million and although it is not stated how much of that relates to Chelsea, it is likely to be a large part of it. Chelsea’s total wages for 2021-22 were £340 million.

The result is that Chelsea face having to take remedial action between now and the end of June, including selling players and securing new commercial deals. The club insist they are not at risk of a Premier League charge for the period ending this season, but Everton’s experience — a ten-point deduction reduced to six on appeal — shows a points deduction would follow any such breach.

If Chelsea decide to sell players, the biggest profit would come from offloading home-grown stars who graduated from the academy such as Reece James, Conor Gallagher or Trevoh Chalobah — which count as pure profit in PSR terms — but that could risk alienating fans.

Chelsea’s turnover has risen from £481.3 million to £512.5 million for 2022-23. That made up 95 per cent of Blue Co’s turnover for its first financial year.

Stefan Borson, a lawyer who previously worked with Manchester City as a financial adviser and has an interest in football finance, believes Chelsea will be charged with a breach of PSR next year.

A judgment on Manchester City's alleged rule breaches is not expected until the autumn and any appeal would defer matters until the spring of 2025.

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