Chelsea continue to hemorrhage money after announcing a loss of £67.7million for the financial year ending June 30, 2011.
That is only a slight drop decrease from the loss of £70.9million in 2010, as Chelsea struggles to fall in line with UEFA’s new financial fair play rules.
Since Roman Abramovich bought the club, Chelsea have now lost a combined £620million.
Transfer fees were a main contributor to the loss, while Chelsea tried to spin the story to focus on the record club turnover of £222.3million. The £17.5m in increased revenue was due to higher receipts from the Champions League as well as an increase in TV rights relating to overseas broadcasting of Premier League matches.
Chelsea chairman Bruce Buck told the club’s official website, www.chelseafc.com:
“The club is focused on complying with the requirements of UEFA’s financial fair play regulations while maintaining its ability to challenge for major trophies. We would expect this to be reflected in our results for the current financial year.”
Chelsea chief executive Ron Gourlay added:
“Achieving a record level of turnover is satisfying given the economic background against which we are operating.”
This is pure spin from Buck and Gourlay. Yes about half the loss is due to Chelsea paying off Carlo Ancelotti and his staff and also compensating Porto for Andre Villas-Boas and his coaching staff.
But the £67.7m loss only takes into account 20% of the £71m paid out last January for Fernando Torres and David Luiz. And it does not include the £65m spent on Juan Mata, Romelu Lukaku, Raul Meireles, Oriol Romeu and Thibaud Courtois last summer.
Chelsea’s problem is that they spend more than they take in. Last year, Chelsea spent £290m against that £222.3m in revenue. To comply with Uefa’s FFP rules, Chelsea need to cut their losses to £39.5m combined for the 2011/12 and 2012/13 season.
That means that they need to cut that loss in half. If you assume that Chelsea don’t change managers again at the end of the season, then they are looking at about £34m loss. Which sounds good, until you look at those £121.8m in transfer signings that they need to cover. And I cannot see anyway that Chelsea can grown revenue enough to cover those signings, plus any other ones they want to make this summer.
From here it looks impossible for Chelsea can get into line with UEFA’s FFP rules unless they have a massive clearing out of the side, selling many of their older stars and cutting their wage bill massively.