Chelsea’s financial challenges have been underlined by accounts that show a wage bill soaring past the £400 million mark last season with losses reduced only by a £76.5 million property deal with a sister company.
Chelsea’s £404 million salary costs overtake those of both Liverpool and Manchester United. Only Manchester City paid more in wages — though City’s £422.9 million included large bonuses for their Treble-winning season. Despite the salary costs and heavy losses of £89.9 million, the Chelsea chairman, Todd Boehly, said he expected the club to comply with the Premier League’s financial rules “in the foreseeable future”.
Chelsea are only the second club to have gone past £400 million but that sum is believed to include payoffs for the sacked managers Thomas Tuchel and Graham Potter last season.
• Chelsea pay record £75.1m to agents as Premier League fees top £400m
The accounts of Chelsea FC Holdings Ltd, published at Companies House for the year ending June 30 2023, again make clear the challenges facing the London club in complying with Profitabaility and Sustainability Rules (PSR) next season. Chelsea are likely to have to raise significant sums from selling players before the end of June.
Advertisement
As well as the high wages, the accounts include details that were not made public by the club when their parent company, Blueco 22 Ltd, published its accounts a month ago.
That includes the revelation that Chelsea’s financial losses of £89.8 million last season would have been even heavier had the club not reported income of £76.5 million from selling two hotels to Blueco 22 Properties Ltd, which is also a subsidiary of Blueco 22 Ltd. The hotels — the Millennium and Copthorne — were part of the Chelsea Village development at Stamford Bridge overseen by the former Chelsea owner Ken Bates in 2001, and were included when Boehly and his co-owners bought the club two years ago.
Kieran Maguire, a football finance author, told The Sunday Times that in the EFL money asset sales to related parties were excluded from PSR calculations.
Maguire said: “We saw a few years ago the likes of Reading, Birmingham City, Derby County, Sheffield Wednesday and one or two others selling their properties to their owners to try to get an advantage in terms of PSR.”
However, according to Premier League sources, it appears that in the top flight profit from such sales can be used in PSR calculations.
Advertisement
In 2021 the Premier League considered following the EFL’s move to close loopholes around raising income by selling assets to owner-related companies but it was never voted on because of opposition from a number of clubs.
Boehly stated in the accounts: “The club continues to balance success on the field together with the financial imperatives of complying with Uefa and Premier League financial regulations. The club has complied with these since their inception in 2012 and expects to do so in the foreseeable future.”
The £89.8 million loss was made despite Chelsea making a £62.9 million net profit from player trading and £83 million from reaching the Champions League quarter-finals last season. There will be no income from Europe this season. Figures released by the FA on Friday showed Chelsea have spent a top-flight record £75.1 million on agents’ fees alone this season.
Chelsea lost £121.4 million in 2021-22 and the Premier League limits clubs to losing £105 million over three years, though spending on academies, stadiums and women’s football is exempt. The impact of the 2019-20 season, when Chelsea posted a £36 million profit, drops off for their next PSR calculation in December.
The accounts also show that since last season 21 players have been signed “at an initial cost of £454.3million” with ten sold at a profit of £48.2 million. Although the transfer fees can be spread out across the length of the players’ contracts — and some of Chelsea’s are as long as eight years — their wages cannot.
Advertisement
The biggest profit from player sales in terms of balancing the books would come from the sale of home-grown players such as Reece James, Conor Gallagher or Trevoh Chalobah.
Chelsea are already subject to a Premier League investigation into the secret payments during Roman Abramovich’s ownership, launched nearly two years ago. Chelsea’s owners self-reported the payments to the Premier League, many of which were related to transfers, including the signings of Eden Hazard, Willian and Samuel Eto’o, after discovering them during the takeover process.
The Blueco 22 accounts showed Chelsea’s owners have held back £150 million of the purchase price from Abramovich to cover potential sanctions from the investigation.
