There are concerns about Chelsea’s ability to follow profit and sustainability regulations as they have reported a pre-tax loss of £90.1m for the year ending on 30 June 2023.
BlueCo 22, the company that Clearlake Capital and Todd Boehly used to purchase Chelsea from Roman Abramovich in 2022, reported a loss of £121.4m in their latest accounts. This marks a decrease from the previous year’s losses.
BlueCo, the majority shareholder of Strasbourg’s Ligue 1 club, recorded a loss of £653m after taxes during the period of 2 March 2022 to 30 June 2023. The accounts of Chelsea FC Holdings Limited will be released at a later date, providing further information on the club’s financial status.
But the news of a £90.1 million deficit may cause worries that the Stamford Bridge team will violate the Premier League and UEFA’s financial regulations. These rules allow clubs to have a £105 million loss in a span of three years.
Chelsea, with new owners who have invested over £1 billion in player transfers, maintains that they are abiding by both the league’s and Uefa’s regulations. In a statement, the club stated, “Despite facing a financial loss this year and dealing with the consequences of previous sanctions, Chelsea remains committed to adhering to the financial rules set by Uefa and the Premier League.”
Chelsea suffered significant financial losses during the time Abramovich was in charge. The current Boehly-Clearlake ownership is focused on reducing the team’s salary expenses and has a plan to sign young players to lengthy and highly incentivized contracts.
Chelsea’s turnover grew to £512.5m, thanks to higher revenue from match-day and commercial activities as the government lifted sanctions imposed on the club following Abramovich’s involvement in Russia’s recent invasion of Ukraine.
The women’s team’s triumph in the Women’s Super League and FA Cup, as well as their appearance in the League Cup final, contributed to the growth. However, due to the men’s team finishing 12th in the Premier League and being eliminated in the third round of both cup competitions, there was a decline in broadcasting revenue.
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The men’s team could potentially not qualify for Europe for two years in a row, leading to potential financial issues for the club. Chelsea currently ranks 11th in the league, but can secure a spot in the Europa League if they win the FA Cup. Their upcoming match in the sixth round against Leicester City will determine their fate.
The newest defeat increases the likelihood of Chelsea needing to generate income by selling players in the upcoming summer. It is anticipated that they will seek to part ways with homegrown talents such as Armando Broja, Trevoh Chalobah, Conor Gallagher, and Ian Maatsen. Revenues earned from these academy products are considered pure profit in terms of FFP.
Source: theguardian.com
