Chelsea's Champions League winning campaign has fueled a massive turnaround in their financials, they showed a profit for the 2011/12 season.
Chelsea FC have announced that the club showed a profit for the year ending June 30, 2012. While most of us expected that we'd be in better shape financially following a Champions League victory, I have to say that I'm absolutely shocked that the numbers have turned out the way that they did. Most of the specifics are not yet available to break down, but I'm going to highlight a few things that we do know that stand out right away.
- Total revenue was up 13% over the 2010/11 season, which is an absolutely fantastic amount of growth. While the Champions League accounts for some of that, it's clear that the club is growing revenue in other areas as well. This is before any of the new sponsorship deals announced this summer or the increase in Premier League television revenue that's on it's way.
- While revenue was up by £33.4 million over the previous season, expenses had to be down by a considerable amount for the club to show a profit after losing £67.7 million a year prior. As much as winning the Champions League helped the books, it's clear the club were going to look considerably better this season anyway.
- All of Chelsea's remaining debt was converted into equity, making the club 100% debt free. I guess that's another sign that Roman Abramovich is getting bored with Chelsea, right?
- These numbers are not indicative of Chelsea's standing with financial fair play. These figures will include academy costs as well as one time expenses that can be eliminated from the books, but transfer fees may not be accounted for in the same manner that they will under the UEFA rule. Still, things look very good on that front though.
- The club announced their revenue as the 5th highest in Europe for last season. That means that they've surpassed Arsenal in terms of gross incoming money, trailing only Bayern Munich, Real Madrid, Manchester United, and Barcelona in terms of revenue generated.
This announcement shouldn't be seen as a reason to start spending huge money on older players, as the departure from that type of activity is a large reason that we're in the kind of shape that we're now in. It's good to see the approach that the club has been taking showing results in the books though, as all of Abramovich's investment in the club is starting to show massive increases in the amount of revenue the club is capable of generating. Just imagine what could be if we had a stadium that was anywhere near the stature of the ones comparable clubs are playing in...this really should serve as a reminder of what could be with improved matchday revenue.