Chelsea Becomes Cash Positive

[Spike 12,049]

This is getting me all anxious.

[Blue Armour 4,312]

It means we don't have to be too worried...

[coolhead23 1,146]

In simple term, it means that we have a law in place and now here are different ways to break it.

[Blue In Green 86]

Oh UEFA, too gutless to institute a salary cap.

[LDN Blue 7,903]

Good article Kostas, as always.

Seems the Annex XI will save us from such humiliation..

[Kostas 1,468]

Rampant Chelsea a long way off satisfying financial fair play agenda

A new manager and talk of players being bought for huge fees does not suggest a tightening of purse strings in west London

When Michel Platini unveiled his financial fair play agenda he held up the Chelsea owner, Roman Abramovich, as its unlikely standard bearer. The Uefa

president claimed club benefactors had pleaded with him to find ways to control rampant wage inflation and stem spiralling losses.

And yet the publicity-shy Russian has followed up the headline-grabbing, if not yet wholly successful, January splurge on the £74m pair of Fernando Torres and David Luiz by limbering up for another spending spree. First there was the £5m compensation for Carlo Ancelotti, the Italian manager who won the Double in his first season but was sacked after his second.

Then there was the £13.3m due to Porto to trigger the release clause for the new 33-year-old manager, Andrés Villas-Boas. That took the amount spent on hiring and compensating managers and coaching staff alone to an estimated £69m since Abramovich bought Chelsea in 2003. During that time he has pumped £739m into the west London club.

Now back-page headlines scream of huge fees being considered for Tottenham Hotspur's Luka Modric, Anderlecht's Romelu Lukaku, Porto's Radamel Falcao, the Ajax right-back Gregory van der Wiel and the Santos striker Neymar.

Chelsea insiders say nothing has changed and that any signings must fit into an overall strategy drawn up by the chief executive, Ron Gourlay, that still has breaking even as its target. But outsiders could be forgiven for wondering how on earth they plan to get there.

The high-wire act that the club with the highest wage bill in the Premier League at £174m, running at 82% of revenues, has to pull off is far from easy. It must at once try to get that wage bill down while overhauling an ageing squad, bringing down pretax losses that stood at £78m and considering the imminent arrival of FFP.

There is more time than most realise. Through a series of reforms negotiated by the powerful European Clubs Association, the body that replaced the G14 and represents the views of the continent's 191 most powerful clubs, the path to compliance with Uefa's rules has been smoothed considerably.

While Platini continues to talk tough, and argues privately the looming threat has already caused clubs to put the brakes on their out of control spending, they know they have some grace.

The first accounts that will qualify concern the next financial year, 2011-12. But Uefa's accountants will not start examining them until the 2013-14 season.

Even then, there is an "acceptable deviation" of €45m over the first two years. And, as long as they can prove they are moving in the right direction, they are also allowed to discount the wages of players on contracts signed before June 2010. That rule will hold for the first two "monitoring periods" – the two years ending 2013-14 and the three years ending 2014-15.

With a maximum Premier League squad size of 25 and Chelsea's need to bring average age and salaries down, expect at least as many departures as arrivals. Many of the players the club will seek to move on will not attract big fees. Yuri Zhirkov, José Boswinga, Florent Malouda, Nicolas Anelka, Salomon Kalou, Mikel John Obi, Paulo Ferreira and Alex, for instance, could fall into that camp.

Up to five senior players are expected to leave, plus the usual turnover of youngsters going out on loan and the sale of other fringe players. Then there is the cadre of established players that have been at the heart of Chelsea's success in the Abramovich era but will represent Villas-Boas' first big call. How he decides to handle John Terry, Frank Lampard, Didier Drogba and Michael Essien could well set the tone for his tenure. If two new strikers arrive, it could signal Drogba's departure while Essien was a shadow of his former self for much of last season.

Of those in first group the key from a FFP point of view is getting them off the wage bill. Chelsea then hope to attract younger players – whose fees, even if high, can be amortised over long contracts – on lower salaries than those they replaced.

The holy grail is to mix them with some promising youngsters from the academy - where Abramovich is still hoping that his big investment at Cobham will pay off despite mixed results and the departure of Frank Arnesen - and a sprinkling of superstars in the Torres mould. It is not an original model and it is one that, to a greater or lesser extent, Chelsea's rivals are also following. But for the London club the need is more pressing, because its losses and wages are higher and the potential for increasing matchday income is lower.

Those star signings are also important in executing another plank of the Abramovich strategy that has been long talked about but yet to be effectively implemented.

Given the relatively small capacity at Stamford Bridge, and the decision to put plans to move on ice, Chelsea are even more reliant than their Champions League rivals on commercial revenues. They currently have the third highest income in the Premier League, but it is hard to see where substantial growth will come from.

While its deals with Adidas and Samsung are lucrative, in order to keep up in a world of Financial Fair Play that threatens to lock in the established order - aiding those with big grounds and big revenue bases like Manchester United and Barcelona most - Chelsea need to step up efforts to drive overseas income.

Like Liverpool and Arsenal, Chelsea are looking longingly at the Manchester United model of boosting overseas revenues in a range of categories. Whether or not they will ever have the global reach to do so has remained one of the great unanswered questions of the Abramovich era, for all their success on the pitch. A naming rights partner for Stamford Bridge willing to pay up to £10m a year is yet to be found and, despite repeated pre-season forays west and east, significant funds are yet to flow from global deals.

If – and it is a big if, given the owner's craving for instant success and swashbuckling football – Villas-Boas can deliver on the pitch, while also balancing all of those competing financial demands, the £13.3m it has taken to bring him back to Stamford Bridge will represent Abramovich's best investment yet.

[LDN Blue 7,903]

Good read..

Really hope the club are doing something about our large wage-bill at the moment. Despite shedding a couple of million off it last summer, it's still quite high and needs to be dealt with in the immediate future.

[Henrique 9,133]

Financial Fair Play is ridiculous.

First there was the 6+5 rule, that FIFA wanted to impose, and now this. Football is business, and business means liberalism. The clubs must be allowed to spend as much as they want.

This rule will not work.

[Guest justin_3d]

Financial Fair Play is ridiculous.

First there was the 6+5 rule, that FIFA wanted to impose, and now this. Football is business, and business means liberalism. The clubs must be allowed to spend as much as they want.

This rule will not work.

:goodpost:

If FIFA kills business in Europe i am sure it will go somewhere else.

A booming Brazilian economy sounds interesting to you?

[Guest justin_3d]

Some stuff i saw about making money from the CL how much Chelsea made from last season.

http://uk.eurosport....d-46-6m-cl.html

UEFA said other top earners were Chelsea (44.52 million), Schalke 04 (39.75 million), Real Madrid (39.28 million), Inter Milan (37.98 million), Bayern Munich (32.56 million) and Tottenham Hotspur (31.13 million).

Also something interesting about United:

Manchester United looking to raise £600m in Singapore share sale

http://www.guardian....pore-share-sale

I wonder if Chelsea can do the same?

[LDN Blue 7,903]

Manchester United looking to raise £600m in Singapore share sale

http://www.guardian....pore-share-sale

I wonder if Chelsea can do the same?

Chelsea wouldn't do this. Because I doubt Roman would even want to sell a quarter of Chelsea..

[warnie_666 1,081]

At the moment.....Roman's the boss. and we have no debt. Thats all that matters.