Chelsea: a history of rib-tickling excuses and risible claims over consistently losing oodles of Abramovich’s money - HotUKDeals
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Chelsea: a history of rib-tickling excuses and risible claims over consistently losing oodles of Abramovich’s money

casparwhite Avatar
5y, 10m agoPosted 5 years, 10 months ago
Chelsea have this evening announced their latest massive financial losses, £70.9m for the year to June 2010.

This year’s comical headline on the official announcement was ‘Chelsea becomes cash positive’, above an article about Chelsea’s confidence at meeting Uefa’s financial fair play criteria.

Here is a summary of some previous losses, excuses and projections:

.

Jan 2005: Chelsea post losses of £87.8m for 2003-04, Roman Abramovich’s first season in control. Chelsea say they will break even by 2010. Peter Kenyon says: “Two years ago we were seen as streets paved with gold. That is over. Chelsea is now being run properly. The club is being run as a business.” Contemporary report

.

Jan 2006: Chelsea post world-record annual losses for any football club in history, anywhere, of £140m for 2004-05. Kenyon claims Chelsea on target to break even in 2009-10. Contemporary report

.

Feb 2007: Chelsea post £80m losses for 2005-06. Kenyon says: “”You know what? As chief executive I want to pay [Abramovich] back [his loans] because that would show we are running this club as a real proper sustainable business.” Club will be self-sufficient by 2010, says Kenyon. Contemporary report

.

Feb 2008: Chelsea post £74.8m losses for 2006-07. Kenyon says: “Our long-term target of operating profit break even by 2009/10 remains ambitious but we are determined to meet it or get as close as we can.” Contemporary report

.

Feb 2009: Chelsea post £66m losses for 2007-08. Kenyon says: “In line with our long-stated business aims, any squad restructuring in the summer will be funded predominantly by sales…” Contemporary report

.

December 2009: Chelsea post losses for 2008-09 of £44.4m. They claim Abramovich has wiped the debt although apparently he hasn’t according to the Guardian’s David Conn, in the contemporary report here.

.
Jan 2011: Losses of £70.9m announced. Chairman Bruce Buck says: ‘That the club was cash generative in the year when we recorded a historic FAPL and FA Cup double is a great encouragement and demonstrates significant progress as regards our financial results.’

Which might mean: ‘We make a lot of money from TV and tickets and stuff (and then we spend even more, loads more).’
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casparwhite Avatar
5y, 10m agoPosted 5 years, 10 months ago
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#2
Reminds me so much of St Mirren over the last few years.
#3
I have no time for chelsea and man city.
#4
seeyounever
I have no time for chelsea and man city.

Lol such a big loss.
#5
Why do you bother, posting such things? Does it affect your daily life - No... Support your own team rather then ranting like a sore jealous little child.
#6
At least the debts are actually paid unlike Leeds Portsmouth etc etc who cop out through administration
#7
I wonder how Chelsea are going to deal with the fifa fair play thing that kicks in this year? (no losses of more than 39m per year over 3 years or something of the like). Ive heard city are going to buy their way you by having an associated company of sheik mansour 'sponsor' Man City for a crazy about of money thus 'earning' money. Will ambramovich do the same? Are the losses due to buying players only or paying wages?
#8
ei8hty5ive
I wonder how Chelsea are going to deal with the fifa fair play thing that kicks in this year? (no losses of more than 39m per year over 3 years or something of the like). Ive heard city are going to buy their way you by having an associated company of sheik mansour 'sponsor' Man City for a crazy about of money thus 'earning' money. Will ambramovich do the same? Are the losses due to buying players only or paying wages?


Chelsea’s bullishness that they won’t immediately fall foul of Uefa’s imminent Financial Fair Play (FFP) rules is because they will be able to ‘write off’ a huge chunk of their wage bill in the scheme’s early years, sportingintelligence can reveal.

This has been confirmed this afternoon to sportingintelligence directly by Andrea Traverso, the Head of Club Licensing and Financial Fair Play at Uefa, and as such the man in charge of implementing FFP.

The same ‘write off’ technique will be allowed to all clubs under certain conditions, for the first two monitoring periods of FFP, effectively meaning that most clubs won’t actually need to start any real degree of belt-tightening before the 2012-13 season.

The FFP rules and terms have been widely misunderstood which is not surprising because they are immensely complex. But to try to summarise how they will work:

* From next season, 2011-12, clubs must not spend more money than they earn. To be crassly simplistic, they mustn’t spend more on wages and other expenses than they earn in ticket, media and commercial income in any one ‘monitoring period’ (MP). The first MP will last two years, the second will last three years, and so will MPs thereafter.
* Uefa will monitor spending, and for the first few years, will allow certain losses as long as they’re met unconditionally by benefactor funding.
* The first MP is 2013-14, for seasons 2011-12 and 2012-13 combined, and the losses allowed will be €45m over that whole period, or roughly £39m, or £19.6m per year.
* The second MP is 2014-15, for seasons, 2011-12, 2012-13 and 2013-14, and the losses allowed will be €45m over that whole period, or €45 a year, or £13m a year. And so on, like this:
http://www.sportingintelligence.com/wp-content/uploads/2011/02/FFP-accounting-periods.jpg
.

At first glance, on current trends, the losses at Chelsea (£70.9m in one year to June 2010) and some other clubs, notably Manchester City (£121m loss in one year to summer 2010) make it seem extremely unlikely that they will get anywhere close to meeting the FFP requirements.

And if a club fails to meet the FFP limits, then punishments including bans from European competition, including the Champions League, will be applied.

So why do Chelsea, despite the losses posted yesterday, seem so upbeat that they can spend £70m-plus in the transfer window and release a statement they’re on course for FFP?

The statement said: ‘The club is in a strong position to meet the challenges of UEFA ‘financial fair play’ initiatives which will be relevant to the financial statements to be released in early 2013.’

The reason is because they know that for the first and second MPs, namely the two-year period before 2013-14 and the three-year period before 2014-15, they will be able to deduct from any losses the amount of any players’ wages agreed in deals signed before 1 June 2010.

In other words, if Chelsea’s wage bill is currently in the vicinity of £160m per year (give or take £10m-ish), the majority of that is going to players who signed their most recent deals before 1 June 2010. Let’s assume, for the purposes of this example, only half that sum, £80m, is on wages agreed before last summer.

Again, to be crassly simplistic, in the financial year just reported, Chelsea lost £70.9m but could actually write off the wages (£80m in our example) agreed before 1 June 2010. In other words, they didn’t lose £70.9m for FFP purposes, they actually made money!

Contrary to some reports, no club can write off any transfer fees agreed before 1 June 2010. ‘All clubs must amortise all transfer fees, even those spent before June 2010,’ Traverso tells sportingintelligence.

He adds: ‘However, should a club be in breach [of the FFP break-even requirements] and they are able to prove that the breach is exclusively due to salaries for players under contract before 1 June 2010, and they can also show an improvement trend in their accounts, they will not be sanctioned.’

In other words, and to be simplistic (because there is a lot of small print), for the first two MPs of the FFP, a lot of wages can be written off, if a club can argue they’re heading in the right direction, which will be a semantic but surmountable tussle for anyone. Example here.

The full FFP rules document can be downloaded here.

On the very last page, you’ll see the words that allow the wages write-off.

.

After the first two monitoring periods, all bets are off, and all wages will be counted.

So for example, for monitoring period 2015-16, which includes seasons 2012-13, 2013-14 and 2014-15, all wages will count and clubs who have continued to spend more than they earn will be in big trouble.

But it’s a long way off, or seems it to the clubs still spending.

That may explain why Chelsea were happy to splash the cash yesterday on Torres and Luiz.

Actually getting serious about cutting your losses is a headache for a slightly more distant time.

Edited By: casparwhite on Feb 02, 2011 23:33
#9
Marty1981
At least the debts are actually paid unlike Leeds Portsmouth etc etc who cop out through administration


lol so you didnt even read the article......

let me help you with that

http://www.guardian.co.uk/football/2010/may/19/roman-abramovich-chelsea-loan-debt
#10
Ruscoe21
Why do you bother, posting such things? Does it affect your daily life - No... .


classic irony

Ruscoe21
Support your own team rather then ranting like a sore jealous little child.


jealous of a £700 million quid debt.......lmao
#11
Which clubs does this apply to Caspar? Is it everyone?
#12
PhearFactor
Which clubs does this apply to Caspar? Is it everyone?


yes mate its uefas new rules......
[mod]#13
Chelsea and Man City won't make the criteria for the new UEFA rules. They don't generate enough income to meet the turnover/wage criteria so there mega rich owners can't even get them out of that.

Until they become big global football brands like Man Utd and Liverpool or run a good profitable business like Arsenal with healthy wage structures they will fall foul of the new rules.
#14
Syzable
Chelsea and Man City won't make the criteria for the new UEFA rules. They don't generate enough income to meet the turnover/wage criteria so there mega rich owners can't even get them out of that.

Until they become big global football brands like Man Utd and Liverpool or run a good profitable business like Arsenal with healthy wage structures they will fall foul of the new rules.


its all quite complicated but its about time something was done with the majority of premiership clubs running at a loss yet still ridiculous transfers happening.

interesting to see which loopholes the big clubs can find and if uefa actually follow through on their promise to kick clubs out of competitions
#15
Think I need to read about this some more. So it applies for all teams in the EPL even those who have no chance of going into any European league/cup etc?
[mod]#16
casparwhite
Syzable
Chelsea and Man City won't make the criteria for the new UEFA rules. They don't generate enough income to meet the turnover/wage criteria so there mega rich owners can't even get them out of that.

Until they become big global football brands like Man Utd and Liverpool or run a good profitable business like Arsenal with healthy wage structures they will fall foul of the new rules.


its all quite complicated but its about time something was done with the majority of premiership clubs running at a loss yet still ridiculous transfers happening.

interesting to see which loopholes the big clubs can find and if uefa actually follow through on their promise to kick clubs out of competitions


Apparently they have had their lawyers combing over the rules for some time but they look watertight and they are worried. No more than 70% of turnover on wages and owner pumping money in does not count as it has to come from viable regular ongoing commercial deals/sponsorhip and gate receipts.

It's certainly going to put the cat amongst the pigeons. Liverpool and profitable and well within the wage structure and despite Man Utd's debt they are well within and profitable as well. Arsenal sail through. Real & Barcelona are also coasting it. The clubs it's going to hurt are Chelsea, Man City, some of the German and Russian clubs.

Roll on 2012/2013 season.........should be interesting.
[mod]#17
PhearFactor
Think I need to read about this some more. So it applies for all teams in the EPL even those who have no chance of going into any European league/cup etc?


It only applies if you attain qualification into European Competition and if you don't meat the fair play financial regulations you are immediately expelled from that years European Competition.
#18
So they start monitoring once you qualify, but do they monitor the season you qualify, the season before, or only the ones after?

Trying to work out if it would be possible to qualify, then purposely not qualify, then re-qualify to some how reset your books without being banned.
#19
PhearFactor
So they start monitoring once you qualify, but do they monitor the season you qualify, the season before, or only the ones after?

Trying to work out if it would be possible to qualify, then purposely not qualify, then re-qualify to some how reset your books without being banned.


http://www.goal.com/en/news/755/europe/2011/02/02/2334351/financial-fair-play-rules-do-not-prevent-clubs-from-spending
[mod]#20
tommay
is there anything stopping the owners from buying an executive box for £100m per season, or sponsor the training kit for £100m etc, to meet the new rules?


Yep, not allowed.
#21
casparwhite
Ruscoe21
Why do you bother, posting such things? Does it affect your daily life - No... .
classic irony
Ruscoe21
Support your own team rather then ranting like a sore jealous little child.
jealous of a £700 million quid debt.......lmao

What team do you support? Just so we can all see what perspective you are writting this from. Also Chelsea must have some of the best executives available and im sure they will sort it out.
banned#22
Ruscoe21
casparwhite
Ruscoe21
Why do you bother, posting such things? Does it affect your daily life - No... .
classic irony
Ruscoe21
Support your own team rather then ranting like a sore jealous little child.
jealous of a £700 million quid debt.......lmao
What team do you support? Just so we can all see what perspective you are writting this from. Also Chelsea must have some of the best executives available and im sure they will sort it out.

Classic Irony. He supports Leeds United. The team who weren't big enough to support its debts after spending too much, got relegated, got put in administration and had several wonderful years in League 1.

I laughed.
banned#23
seeyounever
I have no time for chelsea and man city.


who are you anyway oO
#24
guv
Ruscoe21
casparwhite
Ruscoe21
Why do you bother, posting such things? Does it affect your daily life - No... .
classic irony
Ruscoe21
Support your own team rather then ranting like a sore jealous little child.
jealous of a £700 million quid debt.......lmao
What team do you support? Just so we can all see what perspective you are writting this from. Also Chelsea must have some of the best executives available and im sure they will sort it out.
Classic Irony. He supports Leeds United. The team who weren't big enough to support its debts after spending too much, got relegated, got put in administration and had several wonderful years in League 1.I laughed.

out loud?
#25
dog_cop
seeyounever
I have no time for chelsea and man city.
who are you anyway oO

classic :D
1 Like #26
guv
Ruscoe21
casparwhite
Ruscoe21
Why do you bother, posting such things? Does it affect your daily life - No... .
classic irony
Ruscoe21
Support your own team rather then ranting like a sore jealous little child.
jealous of a £700 million quid debt.......lmao
What team do you support? Just so we can all see what perspective you are writting this from. Also Chelsea must have some of the best executives available and im sure they will sort it out.


Classic Irony. He supports Leeds United. The team who weren't big enough to support its debts after spending too much, got relegated, got put in administration and had several wonderful years in League 1.

I laughed.


is that all youve got.....

i laughed too, its like a laughathon in this thread

all we need now is a scum fan to carry on the laughter

oh man you cant keep the wolves at bay........as if by magic!!!!!


Edited By: casparwhite on Feb 07, 2011 14:07: bold
#27
Syzable
tommay
is there anything stopping the owners from buying an executive box for £100m per season, or sponsor the training kit for £100m etc, to meet the new rules?


Yep, not allowed.


Sy, where does it say that sort of thing isn't allowed?
[mod]#28
greg_68
Syzable
tommay
is there anything stopping the owners from buying an executive box for £100m per season, or sponsor the training kit for £100m etc, to meet the new rules?


Yep, not allowed.


Sy, where does it say that sort of thing isn't allowed?


I saw it on a feature that Sky Sports did on it.

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