Chelsea FFP F£$%£@D
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Chelsea have become the 50p shop of the Premier League, only it’s £50m they’re charging. You want Gallagher? £50m please. Broja? £50m. Wonder how much they’d want for Thiago Silva?
But it’s OK because Simon Jordan thinks they’ll be fine, he said so a few months ago and people believed him.
And it’s hilarious hearing Borson say they must know what they’re doing, they’re really smart guys. No mate, they’re chancers, just like your boys `City, and they’re running out of road. Still, at least they built a squad that was lucky to only get humped 4-1 in mid-week.
But it’s OK because Simon Jordan thinks they’ll be fine, he said so a few months ago and people believed him.
And it’s hilarious hearing Borson say they must know what they’re doing, they’re really smart guys. No mate, they’re chancers, just like your boys `City, and they’re running out of road. Still, at least they built a squad that was lucky to only get humped 4-1 in mid-week.
Yeah but TBF Borson also says they are fucked ! He said they are smart guys in response to the interviewer saying they have no idea what they are doing. However he goes on to say that they didn't account for points deductions - thinking it would only be a fine. So now they are toast.
And he said City would get away with it, because, reasons.
He puts numbers on it - says £500m turnover and £350m wages. I think the wage number is low, but I reckon they may not make that big a loss for 2023 due to the sales they made (principally Mount and Havertz). But in 2024 you’ll be looking at lower revenue (no Europe) and similar wages, maybe higher given the size of their squad in relative terms. I think they’ll have best part of £190m amortisation on top of that (BEFORE changing the long contracts to max 5 years, so the `UEFA picture will be worse). Which means they’ll have lost at least £40m before they’ve even paid any bills.
EDIT - for context, their other costs were over £130m in 2022 (last published accounts).
Pass the popcorn.
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Only academy players though.. so they can recognise full profit.
So do you pretty much think now that these rules are gonna have teeth? Because if that's true, and with the stadium finished, our revenue should be pretty much all that counts now. And ours is within touching distance of anyone else's (I think), so we should be in a great position to compete, really.
First thing is that the actual financial measures will be changing to ratio of wages amortisation to turnover so the profit side become less important, but you still need to control the direct football costs. This is already in place for UEFA but hasn’t been formalised for the PL, it I’m sure they’ll introduce a half-arsed measure in due course.
As far as the deterrent goes, I think we’ve seen that in the January window - much lower spending than in previous years and a lot of that seems to be down to fear of the rules - there are plenty of articles in the media to this effect. The Everton case was a real shot across the bow, and if you read the judgment they do talk about the sanction being a deterrent (which is where I think Everton may have a case for reducing it).
But that only really helps keep mid-table and below in check. UEFA’s measures are much stricter, in theory, but the sanctions are much lighter - usually fines, often suspended; they need to start banning teams. So I can see City continuing to take the piss because UEFA is too weak to punish them adequately and the Premier League rules are too relaxed to bite on them. So the argument about FFP rules preserving the status quo is a valid one - it may not be what was intended but it is what is happening, and the inability of the likes of Newcastle to splash their owner’s cash with abandon makes the case.
EDIT - and yes, we’re in a strong position with infrastructure and solid (genuine) commercial revenues. If everyone were to play by the rules we’d be laughing. But that’s a big IF.
On that last point, I'm hoping that these regimes at least have a dampening effect, so the likes of City try to push at the boundaries rather than sprint right through them. I think that's all we really need to stay on a similar footing. Personally I can't see a return to the really excessive spending that we can't compete with. Although I might be naive there.
A couple of points I didn't follow: why does the deterrent only really affect lower and midtable clubs? You mean the threat of relegation?
And I thought the PL rules and FFP were basically the same? There are some pretty major differences then? Beyond the ratio/absolute position one, I mean.
Thanks
On deterrent, the point is that the bigger clubs are geared up to manage within tighter margins for UEFA purposes so the PL rules don't bite them, but they do deter smaller clubs from going on spending sprees, unless they can raise cash first through sales (eg Villa after selling Grealish, Brighton etc). And yes, with penalties of 10 points or so the knock on effects could be serious.
We're in flux in the regimes at present. The UEFA rules have changed over to the ratio, PL is still in profit-based but has indicated it will move to a ratio in future if clubs approve (not yet voted on as far as I can tell).
Oh ok, so they're not deterred by the new PL rules simply cos they were already deterred.
As long as the PL stick to their guns then it should have a long-term effect.
As long as the PL stick to their guns then it should have a long-term effect.
Decent summary from the Guardian, underlining that Chelsea have a mountain to climb on PSR for 2023-24 (Swiss Ramble suggesting a loss of `£201m against my back of fag packet estimate of £170m above).
You don’t see much of Todd Boehly these days. In the first weeks after he fronted the Clearlake takeover of Chelsea, he was a regular presence, telling European football what it could learn from US sport, proudly announcing his disruptive intent. Which is a shame: it would be good to know exactly where spending $1bn to transform a Champions League-winning squad side into one that sits 11th in the Premier League fits into his master plan.
There had been a thought around the turn of the year that things might be falling into place for Chelsea. They reached the Carabao Cup final and won three league games in a row to haul themselves into the top half of the table. Maybe Mauricio Pochettino was at last starting to find some order amid a chaotic squad. The last two games have obliterated that idea.
Having let in four while being comprehensively outplayed at Liverpool in midweek, they leaked another four at home to Wolves on Sunday. The former may be understandable, the latter is not. This wasn’t a team having four chances and taking them all; Wolves were much the better side and could easily have won by more. Chelsea were a shambles, players arguing among themselves as sections of the crowd called for Pochettino to be sacked and wistfully sung about the Roman Abramovich era.
The problems go far deeper than results. In the short term, Chelsea’s activities since the Boehly/Clearlake takeover are not a problem. The football finance expert Swiss Ramble noted in August that the transfer activity since the takeover was exactly neutral, with £143m in wages plus £116m in amortisation from purchases offset by a £192m reduction in wages and £62m in amortisation from sales. Even better, there was a £215m profit in terms of player sales.
Which looks excellent – in the short term. But Chelsea’s signings have committed them to £1.9bn of future spending. And this is a club that has posted operating losses in each of the past 10 seasons, a picture that has been getting worse in the past four years. In 2021-22 operating losses were £224m, bringing total losses over the decade to £944m. That has to an extent been balanced by £706m in player sales.
Taking into account the reduction in wage bill, and projecting other income and outgoings for this season, Swiss Ramble calculated estimated losses of £131.6m for 2023-24 to go with £70.2m last season and £121.4m the season before that. There are allowable deductions for ‘healthy’ spending such as that on the academy and women’s team, which can be estimated at £40m or so a season. Which, when the extra allowances for losses in the Covid season are taken into account, kept Chelsea just above the threshold of £105m in losses for the three-year period up to 2022-23.
For 2023-24, though, they would appear to be in big trouble, with Swiss Ramble estimating their losses at £201m – and that was on an assumption they would finish sixth, which now looks extremely optimistic.
Uefa’s regulations are not immediately relevant but it is changing its FFP model to a cost control ratio, by which player wages, transfers and agent fees will by 2025 be limited to 70% of revenue and profit on player sales. At the moment, Chelsea’s is around 90%.
Chelsea are already being investigated for possible historical breaches of FFPin the Abramovich era, which could lead to points deductions (or worse) that would make their job even harder going forward. And it is extremely hard already. They just about kept their heads above water in the three-year period to last June but that was with exceptional sales. They don’t have many academy products or fully amortised players left. Say they sold Moisés Caicedo next summer for the £100m they paid for him: yes, they would reduce costs from his amortisation and wages, but his eight-year contract means the profit would only be £100m minus his book value which, with seven of the eight years of his contract remaining would be £87.5m: that is, £12.5m.
To keep making the sort of profits that have sustained them over the past decade will be extremely difficult. Those academy products who remain, the likes of Conor Gallagher and Reece James, are likely to find the owners extremely eager to listen to offers. And of course this is the reverse of standard footballing wisdom, that clubs benefit from having a core of players brought up in the ways of club, the John Terry and Frank Lampard figures, who have an attachment to the institution that goes beyond salary.
Perhaps Chelsea will be granted additional dispensation for losses suffered after the imposition of sanctions on Abramovich, although there are no guarantees, but with the likelihood of no Champions League football, it’s hard to see how revenues will rise significantly next season. With 12 players on contracts of eight years or more, the amortisation trick looks increasingly like an albatross.
This is a club in a terrible mess and the only people who can really be blamed are the disruptive new owners.
You don’t see much of Todd Boehly these days. In the first weeks after he fronted the Clearlake takeover of Chelsea, he was a regular presence, telling European football what it could learn from US sport, proudly announcing his disruptive intent. Which is a shame: it would be good to know exactly where spending $1bn to transform a Champions League-winning squad side into one that sits 11th in the Premier League fits into his master plan.
There had been a thought around the turn of the year that things might be falling into place for Chelsea. They reached the Carabao Cup final and won three league games in a row to haul themselves into the top half of the table. Maybe Mauricio Pochettino was at last starting to find some order amid a chaotic squad. The last two games have obliterated that idea.
Having let in four while being comprehensively outplayed at Liverpool in midweek, they leaked another four at home to Wolves on Sunday. The former may be understandable, the latter is not. This wasn’t a team having four chances and taking them all; Wolves were much the better side and could easily have won by more. Chelsea were a shambles, players arguing among themselves as sections of the crowd called for Pochettino to be sacked and wistfully sung about the Roman Abramovich era.
The problems go far deeper than results. In the short term, Chelsea’s activities since the Boehly/Clearlake takeover are not a problem. The football finance expert Swiss Ramble noted in August that the transfer activity since the takeover was exactly neutral, with £143m in wages plus £116m in amortisation from purchases offset by a £192m reduction in wages and £62m in amortisation from sales. Even better, there was a £215m profit in terms of player sales.
Which looks excellent – in the short term. But Chelsea’s signings have committed them to £1.9bn of future spending. And this is a club that has posted operating losses in each of the past 10 seasons, a picture that has been getting worse in the past four years. In 2021-22 operating losses were £224m, bringing total losses over the decade to £944m. That has to an extent been balanced by £706m in player sales.
Taking into account the reduction in wage bill, and projecting other income and outgoings for this season, Swiss Ramble calculated estimated losses of £131.6m for 2023-24 to go with £70.2m last season and £121.4m the season before that. There are allowable deductions for ‘healthy’ spending such as that on the academy and women’s team, which can be estimated at £40m or so a season. Which, when the extra allowances for losses in the Covid season are taken into account, kept Chelsea just above the threshold of £105m in losses for the three-year period up to 2022-23.
For 2023-24, though, they would appear to be in big trouble, with Swiss Ramble estimating their losses at £201m – and that was on an assumption they would finish sixth, which now looks extremely optimistic.
Uefa’s regulations are not immediately relevant but it is changing its FFP model to a cost control ratio, by which player wages, transfers and agent fees will by 2025 be limited to 70% of revenue and profit on player sales. At the moment, Chelsea’s is around 90%.
Chelsea are already being investigated for possible historical breaches of FFPin the Abramovich era, which could lead to points deductions (or worse) that would make their job even harder going forward. And it is extremely hard already. They just about kept their heads above water in the three-year period to last June but that was with exceptional sales. They don’t have many academy products or fully amortised players left. Say they sold Moisés Caicedo next summer for the £100m they paid for him: yes, they would reduce costs from his amortisation and wages, but his eight-year contract means the profit would only be £100m minus his book value which, with seven of the eight years of his contract remaining would be £87.5m: that is, £12.5m.
To keep making the sort of profits that have sustained them over the past decade will be extremely difficult. Those academy products who remain, the likes of Conor Gallagher and Reece James, are likely to find the owners extremely eager to listen to offers. And of course this is the reverse of standard footballing wisdom, that clubs benefit from having a core of players brought up in the ways of club, the John Terry and Frank Lampard figures, who have an attachment to the institution that goes beyond salary.
Perhaps Chelsea will be granted additional dispensation for losses suffered after the imposition of sanctions on Abramovich, although there are no guarantees, but with the likelihood of no Champions League football, it’s hard to see how revenues will rise significantly next season. With 12 players on contracts of eight years or more, the amortisation trick looks increasingly like an albatross.
This is a club in a terrible mess and the only people who can really be blamed are the disruptive new owners.
View: https://twitter.com/Matt_Law_DT/status/1762187578734788953
Chelsea’s Premier League rivals believe the club must make major sales by June 30 to avoid the threat of running into profit and sustainability trouble.
Speculation among some of Chelsea’s rivals is that they need to raise around £100 million by the end of June this year. Club sources refute that figure and stress any early sales would be done with making signings in mind, rather than needing to bring in cash before the next PSR cut-off.
Regardless of the reasons why, Chelsea are braced for another summer exodus of players. They proved they can bring in quick cash last year by raising over £130 million before June 30, although the task is complicated this year by the European Championships, which run from June 14 to July 14.
Since taking over the club from Roman Abramovich, co-owners Behdad Eghbali and Todd Boehly have spent over £1 billion on new players, but have also recouped almost £400 million in sales.
Chelsea have not commented on their profit and sustainability situation, but there is a feeling that rumours of needing to raise £100 million by June 30 could constitute mischief-making among clubs seeking to try to create more uncertainty around the club and some of their players.
Newcastle United’s obligation to buy Lewis Hall is on course to guarantee Chelsea a quick £28 million without the need for any further negotiation.
Chelsea will expect to earn over £30 million from the permanent sale of Belgium international Romelu Lukaku after agreeing a £37 million release clause in the new contract he signed before joining Roma on loan last season.
While Roma might not be able to fund a move for Lukaku, his 24 goals for club and country this season will attract new interest from Saudi Arabia in the 30-year-old.
Chelsea also inserted a £35 million release clause into the contract of Ian Maatsen before he joined Borussia Dortmund on loan in January, which they expect to be triggered.
Left-back Maatsen has been a regular for Dortmund since moving to Germany and the Bundesliga club may face competition for his permanent signature.
Selling Lukaku and Maatsen for anywhere close to their release clauses would just about guarantee Chelsea £100 million from sales, but the club will also look to offload Tervoh Chalobah and Armando Broja, while the futures of England international Conor Gallagher and Marc Cucurella are in doubt. The expectation remains that Chelsea will make Gallagher some sort of contract offer to extend his deal, but an agreement is still far from certain.
Chelsea opened the door for Gallagher to move to Everton in a deal worth £45 million just over a year ago, but the player was not interested in swapping Stamford Bridge for Goodison Park.
Raising significant money by June 30 from the sales of Hall, Maatsen and Lukaku would put Chelsea in a better negotiating position over Gallagher, who Tottenham Hotspur will make a bid for if he does not agree a new contract. The expectation remains that Chelsea will make Gallagher some sort of contract offer to extend his deal, but an agreement is still far from certain.
Having raised over £130 million from the sales of Kalidou Koulibaly, Edouard Mendy, Mateo Kovacic, Kai Havertz and Ruben Loftus-Cheek by June 30 last year, Chelsea earned another £100 million-plus after that from selling Mason Mount, Christian Pulisic and Ethan Ampadu, as well as bringing in a number of loan fees.
Chelsea left all their spending until after the end of June last year, which they may choose to do again, eventually spending over £448.5 million which included the £115 million British record signing of Moises Caicedo.
That left Chelsea with a post-June 30 deficit of more than £200 million last year, with clubs allowed to report losses of up to £105 million over a three-year period to remain within profit and sustainability rules.
The final date of the financial reporting year is June 30, which last year created an unofficial transfer deadline day.
So who do we want from Chelsea if there is a fire sale?
LB Ian Maatsen - though at his release clause of £35m, will be a luxury signing
No, he looks too mongy
He's at Dortmund isn't he. Looks decent but, as you say, that's a lot of money and we do have several LBs on the academy escalator, Owen Beck in particular.
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I am going to say no-one! As everyone knows I love window shopping but without knowing who the manager and SD is, advocating signings (for me) is gonna be difficult. I like Hincapie, Frimpong and Wirtz. I can see how Hicapie fits in the squad and to an extent Frimpong if Salah leaves but not Wirtz (unless we go for more bodies in MF). Let's say its Xabi, which players we have right now would not work in his system he employs at BL?
Seeing youngsters like Danns, McConnell, Clark, and Bradley holding their own against established players is just as thrilling.
Other seasons I would be one of the first lamenting the club for not buying in the winter but I hadn't this winter - a) Klopp has announced his departure, it would be insane to buy players who might not fit the mould of any new manager b) things feel different this year, the youngsters are filling the gap far better than I could ever hope
None of those cunts.
Hurrah - at last!!!!
Hurrah - at last!!!!
We don’t need anyone from Chelsea and obviously won’t sign any of them. But as an exercise to identify who we think could make it at Liverpool. For me I’d be interested in Colwill, Gallagher, Nkunku and Enzo.
Obviously Reece James is a very good player but completely broken.
Obviously Reece James is a very good player but completely broken.
Nkunku looks like there's a player in there. Needs a good coach to find
You think…albeit Chelsea are a mess, but he looks weak and ineffective to me…a hard no…
Palmer looks like he's rented his brain out. At the end of the game, Klopp hugs him and says a few words and he looked like he had no idea.
Our lot would turn down BJs for that.
Brilliant footballer but do wonder how much he is likely he has the right mentality to develop, there was pics of him out after Chelsea defeat to us. Not sure about the rest of him...
Our lot would turn down BJs for that.
Brilliant footballer but do wonder how much he is likely he has the right mentality to develop, there was pics of him out after Chelsea defeat to us. Not sure about the rest of him...
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