Chelsea Announces Annual Profit

[Ankit 3,176]

Chelsea's holding company (Fordstam, iirc) owes this debt to Roman. They are not in the club's books but exist in the parent company's books and while interest-free, can be called in by Roman if and when he wants, on giving the requisite period of notice of course. There are no external debts owed to 3rd parties (bank loans, financial institutions, etc).

Can you please explain it in detail. I mean how can Roman call a company if and when required? What are external debts? And how can a company not be in a company's books but present in company's books. I am not at all a finance guy so i would love if you could just clarify these things. Thanks.

[Blu4Lyf 46]

i find it difficult to work this one out. Yes we won the champions league but 67M loss to profit in 1 fiscal year.

Not to mention the 28M profit in transfer market (even considering transfers based on parachute payment ) is unbelievable.We dint sell anybody only released 3 players and even if you say wages were slashed how can 28M profit result out of it.

I guess Im being paranoid for no reason hope no window dressing has been done to our account books to meet FFP. Atleast our accountants are working overtime

Alex sold for about 5m pounds, Zhirkov was 13-14m pounds. So that's 18-19m pounds, plus whatever their wages were, plus Anelka's wages came off the books. That sounds like 28m to me.

[Madmax 9,219]

Can you please explain it in detail. I mean how can Roman call a company if and when required? What are external debts? And how can a company not be in a company's books but present in company's books. I am not at all a finance guy so i would love if you could just clarify these things. Thanks.

When Roman bought the club, he channeled money to the club through a company called Chelsea Limited (name changed to Fordstam later). So the 'debt' people speak of as Chelsea being under is the money loaned by Roman to Fordstam who in turn loaned it to Chelsea PLC (ie company which owns Chelsea Football Club). These loans are interest-free and were converted into equity by Roman a couple of years back (ie he coverted the loan into 'capital'; the money transformed from being money owed to an outsider to money invested by a benefactor). Here's the catch - this happened at the level of Chelsea PLC, but not in the books of Fordstam. That is to say, Chelsea does not owe money to Roman any longer, Fordstam does. Roman still retains the right to ask for his money back from Fordstam any time he wants on giving 18 months' notice. Say tomorrow he wants to sell the club and calls back his money, then Fordstam ( not Chelsea FC) is bound by law to return it within 18 months.

Roman Abramovich -> Fordstam (formerly Chelsea Limited) -> Chelsea plc -> Chelsea FC.

We've got smart guys running this club.

P.S - 'External debts' is a term I used to describe loans owed to 3rd parties like banks. I did so to avoid confusion with loans owed to Fordstam, who is the holding company of Chelsea plc and hence an 'internal' group undertaking.

[Rmpr 8,977]

MOST SUCCESSFUL SEASON SO FAR, LOWEST SPENT IN TRASFERS AND PROFIT!

Can somebody explain me how we made profit in transfers?

Also, how much money on soft loans do we own Roman?

[Peppen 934]

Loads of discussion going on regarding this announcement on Danish forums. Other fans are pretty much rambling about Chelsea using every single technicality available to 'manipulate' this fine profit.

Can someone who's decent at economics tell me if anything about this seems suspicious? And it is allowed to turn the intergroup debt into equity in compliance with the FFP regulations? Thanks

[Beirut_Blues 306]

Great news.

[Superblue 6,372]

Loads of discussion going on regarding this announcement on Danish forums. Other fans are pretty much rambling about Chelsea using every single technicality available to 'manipulate' this fine profit.

Can someone who's decent at economics tell me if anything about this seems suspicious? And it is allowed to turn the intergroup debt into equity in compliance with the FFP regulations? Thanks

I'm an accountant and whilst not well versed with accounting in football clubs, things seem to be above board.

Other clubs are just bitter because they thought FFP would fuck us up. They can point to £60m+ spent in the summer but the money is not fully realised within the first year, but over the players contract. Also these new partnerships, etc with Sauber, etc will have not kicked in the accounts just published.

Very good start to the weekend - time for City to show their cards now lol!

[Peppen 934]

I'm an accountant and whilst not well versed with accounting in football clubs, things seem to be above board.

Other clubs are just bitter because they thought FFP would fuck us up. They can point to £60m+ spent in the summer but the money is not fully realised within the first year, but over the players contract. Also these new partnerships, etc with Sauber, etc will have not kicked in the accounts just published.

Very good start to the weekend - time for City to show their cards now lol!

Cheers mate! I'm also emphasizing the importance of preparations for FFP. And this is one big step on the way. I'm sure the club board is working their ass off to ensure that we are fit and ready for it. Plus, Arsenal are not alone in making a profit now Hahaha, nah, it's great to see this positive development. May it long last! KTBFFH!

[Superblue 6,372]

Cheers mate! I'm also emphasizing the importance of preparations for FFP. And this is one big step on the way. I'm sure the club board is working their ass off to ensure that we are fit and ready for it. Plus, Arsenal are not alone in making a profit now Hahaha, nah, it's great to see this positive development. May it long last! KTBFFH!

Am i wrong in thinking there is a new tv deal kicking in from next season for even more money?

[Peppen 934]

Am i wrong in thinking there is a new tv deal kicking in from next season for even more money?

The TV money tends to increase every year, so I wouldn't be surprised if that would turn out to be the case

[BlueLyon 9,359]

But the most recent summer transfers (Oscar, Hazard, Moses, Azpi and Marin) are not included, are they?

[Rmpr 8,977]

But the most recent summer transfers (Oscar, Hazard, Moses, Azpi and Marin) are not included, are they?

No, fiscal year of 2011/2012.

[Sheva. 5,373]

Alex sold for about 5m pounds, Zhirkov was 13-14m pounds. So that's 18-19m pounds, plus whatever their wages were, plus Anelka's wages came off the books. That sounds like 28m to me.

And Meireles for about 8m.

[Superblue 6,372]

And Meireles for about 8m.

Sold after June.

We also sold a few to Hamburg remember. And we also get loan fees on some players.

[Superblue 6,372]

But the most recent summer transfers (Oscar, Hazard, Moses, Azpi and Marin) are not included, are they?

No but as said previously the club doesn't take the full hit of transfer fees in just one year.

[NiclasCFC 2,582]

Chelsea proving you can win titles and still manage your Economy!

ARE YOU WATCHING ARSENAL?

[TorontoChelsea 4,064]

This was a profit based more on luck than on good management. The only reason we made money, is winning the CL which made us 47M pounds. Had we not gotten to the finals, we'd have recorded a significant loss. The trick is building long-term sustainability based on smart planning and spending. I think we're heading in that direction, but this profit was based on a highly unlikely success beyond the board's control rather than good planning.

[mediator 2,026]

That' why we shouln't sign falcao and prefer a young striker for the next 10 years.