A must read on Chelsea FC and financial fair play
I think the author makes several pretty good assumptions as to what UEFA will and will not look at, and this is probably the most detailed look into our finances that I've seen yet. It's always a nice change of pace when someone who has actually read the FFP document looks at the issue as opposed to the Mail or the Sun.
3 months ago
Stephen Schmidt
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I did some further digging into Chelsea's books
Even if his ‘exceptionals’ assumption is incorrect, at least £45M of the losses are write-offable as far as FFP is concerned due to contracts signed before June 2010. Chelsea either broke even or make a profit from 6/10-6/11.
Good stuff
A lot of this explains all of the investment in younger players. For long term stability one might want to do this anyway, but it seems UEFA is providing quite a bit of financial incentive to do so, both to hold down salaries and to invest in youth programs.
We just have to pray that Chelsea effectively develops its utes.
And that the new stadium is built (that will contribute to rather than sterilize the game day experience, theoretically attracting more crowds than would otherwise be the case).
The Ute Movement
Yeah, interesting about the youf. I was struck by the fact that academy kids have a net book value of zero when they are sold. I’d like someone who understands this better, and understands accounting better to give an explanation of that.
If we buy players who are under 18, does their transfer cost not count towards financial fairplay?
It would seem then that the way forward is to buy a ton of kids for the academy. We will never sell them for huge amounts, like 10M+, because they would be valuable enough to play in the first team. But all of the other players would train, get better, and have some value. Not only does it give you the chance of getting great players who fit well in the team at a cheap price, you can just spin out cash by having youth.
The numbers in the report show why Chelsea need a new stadium. There isn’t a way forward other than that. If Chelsea are going to retain their “big” status they have to have more matchday revenue, or TV revenue allocations need to change. Being an NFL guy, I think equal distribution of TV revenue is a good thing for the PL, I wouldn’t want it to become Spain. So a new stadium is a must.
I’ve never been, but I’ve heard the Bridge is great. Craven Cottage is also great. This club can either have a historic, distinctive ground or it can have enough money to be a perennial winner. If the Bridge can’t be expanded the club has to move.
The way to quell fears is to make sure that the new stadium makes an effort to be something distinctive, somewhere the fans feel that the stadium reflects the nature of the club. Nothing boring and oval. I’ve already said my preference is to put the stadium in Battersea and to incorporate aspects of the power station into the design. Now we all know the stadium wouldn’t fit, but you could keep aspects of the exterior, to retain the chimneys (even if you had to just create new ones). It would be an unbelievably iconic stadium. Plus there is something poetic about the merging of a dominant team and a power station. And there are few things more London than Battersea Power.
Pretty sure that the costs of buying youth team players doesn't count towards FFP!
However if any team just bought loads of youth team player only to sell them on as a source of revenue for FFP then that would be pretty blatant abuse of a loophole and something would surely be done to stop it!
As for the TV revenue in Spain, I don’t think it will remain they way it is for much longer. They have to negotiate new deals in the next year or two and I can’t see Barca and Real getting anything like the proportion of the money they get now, I think there was even talk at one point of the other clubs threatening to set up a separate league without Madrid and Barca if they didn’t agree to split the revenue more evenly!
This is great news, but this part worries me:
Chelsea can only meet FFP with the sort of squad cost they have now by being in the Champions League. The stakes are high.
They really, really need to figure out a way to increase matchday revenue.
I would hate to see them leave the Bridge, but there may be no other option.
"I want to be a cowboy. I don't want to be a panda. Pandas are boring, stupid and boring. Bad panda!"
Not sure if I understood all that correctly!
Seems like missing out on the champions league would be a disaster!Also this doesn’t seem to leave a lot of room for the significant recruitments required this summer to make this team competitive again!Didn’t realise transfer fees would be counted over the length of the contract, makes the Torres transfer look like more of a disaster than ever!If he is sold this summer would the £50m still be factored in over the duration of his current contract?
I think in the next 18 months could see a lot of the big earners shipped out of the club. Drogba will go this summer, with Cole, Lampard and Cech coming to the end of contracts by the end of next season I’m not sure if they will have their contracts renewed, Cech would be most likely to get a new deal but with Cole and Lampard coming to the end of their careers I would be surprised to see them given new deals, I certainly don’t see them getting new deals at their current pay rates!I would also expect to see Torres shipped off (barring a miraculous turn around in form) as well as Kalou, Ferriera, Malouda, probably Bosingwa. So I think there is a lot to come off the wage bill but replacing all those players would be expensive in terms of wages and transfer fees, I just hope Chelsea get much more shrewd in the transfer market than they have been in recent years! Also I think a larger stadium is a must.
Thank you for this!
I’ve been wanting to learn more about Chelsea and FFP for a while. Look forward to your follow up explanation
by FootieFromAfar on Feb 9, 2012 6:33 PM GMT via mobile reply actions
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