Chelsea have announced a net loss of £121.3m to underline the impact government sanctions imposed on former owner Roman Abramovich had on the club last spring.
And the new owners believe that the impact could end up having a financial impact for years to come because it prevented them from “entering into new contractual arrangements.”
The Stamford Bridge club, who were sold to a consortium led by new chairman Todd Boehly in late May of 2022, were unable to sell tickets or merchandise after Abramovich was sanctioned in early March.
But Chelsea still saw overall turnover increase to £481.3m from £434.9m the previous year on account of increased matchday revenue following the return of supporters post-pandemic.
Commercial revenue also grew to £177.1m with the club saying it “benefited from a net increase in sponsorship revenue from new contracts and existing partner renewals.”
They invested £118m in the playing squad during 2021/22 and made a profit on player trading - with the sales of Tammy Abraham to AS Roma, Marc Guehi to Crystal Palace, Fikayo Tomori to AC Milan, and Kurt Zouma to West Ham adding up to £123.2m.
Describing the sanctions, a Chelsea statement alongside the publication of the accounts read: “The club was required to operate within the limitations of a special licence issued by the UK government. These restrictions were in place until the completion of the club’s sale on 30 May 2022.
“During this period, the club was restricted in a number of areas including, but not limited to, its ability to sell matchday and season tickets, sell merchandise, accept event bookings, as well as sign contracts with players and commercial sponsorship partners, which collectively resulted in extraordinary expenses and loss of revenue.
“Furthermore, some of these limitations are also expected to have an impact on the financials in the following years due to the long-term impact from restrictions on entering into new contractual arrangements.”
Chelsea have gone on to spend a record £566m in two transfer windows under the new owners but this morning’s announcement added that the club “continues to comply with UEFA and Premier League financial regulations.”
Their strategy of offering long contracts to young players, in some cases up to eight years, will thin the repayment of transfer fees and enable them to remain within the financial fair play parameters.
But that move has led to UEFA deciding to revisit the rules around the length of contracts that can be offered to players with new regulations set to be introduced in time for this summer’s window.
