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Chelsea reports annual losses of more than $80m
Chelsea has posted annual losses of more than $80 million but the Premier League club remains confident of complying with UEFA's Financial Fair Play rules
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helsea has posted annual losses of more than $80 million but the Premier League club remains confident of complying with UEFA's Financial Fair Play rules.
The club slipped back into the red a year after making a profit for the first time since Russian billionaire owner Roman Abramovich's takeover in 2003.
Chelsea lost 49.4 million pounds ($81.7 million) in the year to June 30, after making a profit of 1.4 million pounds ($2.3 million) in 2011-12. But UEFA, the governing body for European football, allows unlimited investment on infrastructure and youth development, which Chelsea believes accounted for around 15 million pounds ($25 million) in spending in 2012-13.
UEFA is allowing losses of up to 45 million euros ($62 million) in the first FFP monitoring period ' 2011-2013 ' without the risk of being barred from European competitions.
UEFA wants clubs to move toward breaking even on their football-related activities, and will be preparing in March and April to punish the first clubs for FFP breaches.
"We will meet the stipulations set down by UEFA in their first assessment period," Chelsea chairman Bruce Buck said Tuesday in a statement giving a partial breakdown of financial results. "And by our own analysis we are progressing from a commercial viewpoint as well as continuing to add trophies to our collection, which we never lose sight of as our most important goal."
The 2011-12 profit of 1.4 million pounds ($2.3 million) came on the back of generating around 90 million pounds ($149 million) from the transfer market and a successful Champions League campaign.
But Chelsea's UEFA income was hit despite winning the Europa League in May because the team was knocked out of the more lucrative Champions League at the group stage.
So, although Chelsea posted a record turnover of 255.8 million pounds ($423 million) in 2012-13, it only rose by 100,000 pounds ($165,500).
But commercial income grew 20 percent year-on-year to 79.6 million pounds ($132 million), and there should be a more significant uplift in 2013-14 when the first year of a 300 million-pound ($497-million), 10-year contract extension with kit maker Adidas kicks in.
Chelsea has also advanced beyond the Champions League group stage this season and is third in the Premier League, two points behind leader Arsenal.
"For Chelsea FC to achieve a record level of turnover despite our first group-stage elimination from the Champions League shows we have structured our business and are growing in the correct way for long-term stability," chief executive Ron Gourlay said.
"Our philosophy is we build upon success on the pitch and although in these financial results we haven't repeated the sizeable profits made the previous year from player transfers, we believe the age profile of the existing squad means we will benefit from that investment for many years to come."
