Chelsea’s defeat at Brighton last night places their European hopes in even greater jeopardy. Fans have been eager to criticise the coach, but there are deeper problems.
Next month marks the fourth anniversary of the arrival of an
ownership group who need Chelsea to be worth a lot of money if they are to make
a success of the most brazen deployment of private equity strategy football has
ever seen.
Four seasons of new ownership have seen almost £2 billion
($2.7bn) spent on new signings as BlueCo undertake the most aggressive
player-trading strategy in football. Financial regulations have been skirted at
home and breached abroad. A second club, Strasbourg, have been added to the
group. Players and coaches have been ferried between the two clubs at pace.
The over £4 billion committed to the project has been added
to with borrowings that don’t show on Chelsea’s books, accruing interest at
significant rates. The fate of the club’s home ground, an impediment to higher
earnings, has caused rifts within the consortium; no decision on its future has
yet been made.
Chelsea’s UEFA-reported loss has gone up to £342 million, and
the loss at 22 Holdco Limited, the uppermost UK-registered company in the
BlueCo group, was even more stark: £700.8 m. In its first 38 months of
existence, losses at 22 Holdco were £1.852 billion.
The Athletic has been told that the £1.7 billion
post-takeover commitment has already been met, reflecting how more than that
has flowed into 22 Holdco in the first three years. That commitment is deemed
met even as £1. 3bn of it came via debt held in Chelsea’s parent companies
rather than as equity. Even as the group has the funds to, and almost certainly
will put more money in, there is no obligation for BlueCo to provide more
equity funding than has already been committed.
In all, Chelsea under BlueCo have spent £1.867 billion on new
signings. The net is some way lower, but still around £1 bn. The idea is that
the club, alongside Strasbourg, can turn significant player trading profits
from a pipeline of talent.
There are signs of a slowdown in buying, and a move to the
next stage. Chelsea’s net spend of £179.6 million last season was the Premier
League’s third-highest but low by their recent standards. This season, a
reported £300m was made on player sales. The club’s net spend might well have
been negative last summer.
Chelsea’s latest accounts highlight the difficulty of
turning it all into consistent profits. The policy of lengthy contracts and
high purchase fees meant those £300 million in sales likely didn’t even generate
£50m in profit. And only £31.8m landed in 2025-26.
Turnover last season of £490.9 million meant just a £9.6m improvement in three years, and Chelsea have fallen from the eighth-highest earning club in football to 10th under BlueCo.
Commercial income at Stamford Bridge last season was
£200.9m, £62.3m behind the next-lowest in that cohort (Arsenal) and over £100m
below the average of the five top clubs. Flailing
commercial performance is made all the more stark by the fact BlueCo appear to
have poured plenty of resources into improving it. Administrative and
commercial staff have grown by almost half since the current owners arrived,
including a 20 per cent jump last season alone.
Chelsea’s finances, like several in football’s elite now,
are heavily reliant on sustained revenues from Champions League football.
Missing out again this season would not only delay an improvement in those
finances, it would also heighten the likelihood of breaching a UEFA settlement
agreement which would, in turn, lead to further absence from the competition.
With no progress on Stamford Bridge and repeated exile from
the Champions League, Chelsea’s value does not look discernibly higher than
four years ago. The synergies of multi-club ownership have been slow in
materialising; commercial revenues, a clear focal point of the project, are
falling behind rather than overtaking rivals.
There is time left and plenty that may change. BlueCo will
point to two trophies last season and massive player sales last summer as
partial proof of concept. But the reality is they need an awful lot more for
their gambit to pay off.
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