Chelsea back in the black in time for FFP


After nine years and more than £1bn of investment, Chelsea are in the black for the first time in the free-spending Roman Abramovich era, thanks to their Champions League victory, a rare profit on transfers and improved commercial deals.

The chairman, Bruce Buck, claimed on Friday that the modest profit of £1.4m for the last financial year, compared to a £67.7m loss the year before, showed they were on course to meet Uefa’s new financial fair play (FFP) obligations. Those rules, designed to curb rampant wage inflation and cases of what Uefa’s president, Michel Platini, calls “financial doping”, require clubs to break even within an “acceptable deviation” of €45m over three years.

The selective figures for Chelsea, which cannot be analysed in full until they are lodged with Companies House next week, show the club banked a record turnover of £255.7m, compared to £222.3m the previous year, and overtook Arsenal to become Europe’s fifth largest club in terms of revenue.

That figure was boosted not only by Champions League prize money and ticket revenue but Uefa’s improved TV rights deal, new commercial deals and a profit on transfer dealings of £28.8m.

While Chelsea do not reveal individual transfer fees, the profit has been put down to the sales of Yuri Zhirkov to Anzhi Makhachkala, Alex to Paris Saint-Germain and Slobodan Rajkovic to Hamburg. While the fees and wages paid for players such as Hazard and Oscar will increase outgoings in coming years, the club has also moved on high earners, including Didier Drogba, Nicolas Anelka and José Bosingwa.

The figures indicate Chelsea will have to walk a financial tightrope in order to comply with FFP, but the club believe they can marry continuing investment in the squad with breaking even. Many clubs are hoping the Premier League will introduce its own rules to help curb wage inflation.

Given the constraints of Chelsea’s relatively small stadium compared to their Premier League rivals’, they will look to make up the gap through improved commercial deals.

They have signed new contracts with Gazprom, Sauber, Delta and Audi since the last financial year. The next round of Premier League TV deals, including a record £3bn domestic live contract with Sky and BT, will also help boost future revenues.

Chelsea also revealed that Abramovich had converted a further £166.6m of loans to equity, leaving its balance sheet debt- free. That does not have a bearing on FFP calculations but provides a degree of reassurance that he will not leave the club burdened with debt.

Continue reading about Chelsea’s current financial situation at The Guardian. With Financial Fair Play (FFP) coming in soon, will this simple approach where debt is turned into equity serve to bail out the billionare-owned clubs from the consequences of UEFA’s new financial regulations? Have “self-sustainable” clubs such as Arsenal put all their eggs in the FFP basket and as a result will their relative financial prudence go to waste when it comes to competing with the teams backed by super-rich benefactors? Tell us how you feel about this increasingly controversial topic in our comments section below, on Facebook or on Twitter.

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