Chelsea have set themselves up well for the new era of financial fair play by recording a profit for the first time in the Abramovich era. Along with Manchester City, they were seen as one of the English clubs potentially at risk from the new Uefa regime.
Chelsea have set themselves up well for the new era of financial fair play by recording a profit for the first time in the Abramovich era. Along with Manchester City, they were seen as one of the English clubs potentially at risk from the new Uefa regime.
The financial year ended June 2012 showed an admittedly small profit of £1.4m. However, this has been to set against cumulative losses of more than £600m since Abramovich took charge. Moreover, last year’s loss was £67,7m, so the improvement is substantial. These cumulative losses were effectively written off by him when he converted £709m of loans to the club into equity in 2009.
The underlying picture does look good with a record turnover of £255.7m. Champions League success played a big part and was probably worth £100m to the club. However, commercial revenues have improved considerably.
What is perhaps even more important is that costs have been brought under control. Last year’s accounts included £42m in compensation payments to Luiz Felipe Scolari, his staff and other former employees. Neither Carlo Ancelotti or André Villas-Boas received lavish compensation payments. Instead, they continued to be paid until they found employment.
A £28,8m profit was made on player trading, but this is somewhat misleading. The money received from player sales, particularly that of Yuri Zhirkov, accrues as a lump sum. The fees paid for players such as Juan Mata are spread over the duration of their contacts. The expensive purchases of Eden Hazard and Oscar will show up in next year’s accounts.
Nevertheless, this is an impressive set of results. One outstanding question for the club arises from the physical limits of Stamford Bridge as a stadium, but attempts to find alternatives, most recently at Battersea power station, have not met with success.