There is renewed uncertainty regarding Chelsea’s ability to adhere to profit and sustainability regulations as reports reveal the club experienced a pre-tax deficit of £90.1m from July 1, 2022 to June 30, 2023.
In the 2022 financial reports of BlueCo 22, the company that Clearlake Capital and Todd Boehly used to acquire Chelsea from Roman Abramovich, a loss of £121.4m was disclosed. This marks a decrease compared to the previous year’s loss.
According to the financial records, BlueCo, majority shareholder of the Ligue 1 team Strasbourg, recorded a net loss of £653m from 2 March 2022 to 30 June 2023. The financial statements for Chelsea FC Holdings Limited will be released at a later time and will provide more information on the club’s financial status.
The disclosure of a loss of £90.1 million may cause worry that the Stamford Bridge club may violate the Premier League’s PSR and Uefa’s financial fair play rules. The Premier League allows clubs to incur a maximum loss of £105 million in a span of three years.
Chelsea, whose recent purchases have surpassed £1bn, are determined to abide by the regulations set by the league and Uefa. The club stated, “Despite facing financial challenges and consequences from previous sanctions, we remain committed to following the financial regulations set by Uefa and the Premier League.”
Chelsea experienced significant financial losses during Abramovich’s ownership. The current Boehly-Clearlake ownership is focused on reducing the cost of wages and has a plan of recruiting young players with lengthy and highly incentivized contracts.
Chelsea indicated that their revenue rose to £512.5m due to an increase in match-day and commercial earnings. This was a result of the government lifting restrictions on the club following sanctions imposed on Abramovich following Russia’s invasion of Ukraine two years ago.
The women’s success in winning the Women’s Super League and FA Cup, as well as reaching the League Cup final, contributed to the growth. However, the men’s first team’s 12th place finish in the Premier League last season and their early exits from both cup competitions had a negative impact on broadcasting revenue.
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The male team is at risk of not qualifying for Europe for the second year in a row, which would negatively impact the club’s revenue. Chelsea is currently ranked 11th in the league, but a win in the FA Cup would secure them a spot in the Europa League. Their upcoming match against Leicester City in the sixth round will determine their fate.
Chelsea’s recent defeat increases the likelihood of them needing to generate funds by selling players in the upcoming summer. They are anticipated to seek transfers for homegrown players like Armando Broja, Trevoh Chalobah, Conor Gallagher, and Ian Maatsen. Any revenue acquired from these academy players will count as pure profit according to FFP regulations.
Source: theguardian.com
