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- [00:01]
Dane Brugler
I'm Dane Brugler. I cover the NFL draft for the Athletic. Our draft guide picked up the name the Beast because of the crazy amount of information that's included. I'm looking at thousands of players putting together hundreds of scouting reports. I've been covering this year's draft since last year's draft. There is a lot in the Beast that you simply can't find anywhere else. You can get the Beast and all the great coverage my colleagues do by subscribing to the Athletic. You can do that@theathletic.com subscribe subscribe.
- [00:32]
Unknown Host
The Athletic FC Podcast Network.
- [00:38]
Ayo Akinwalere
Welcome to the Athletic FC Podcast with me, Ayo Akimwaleere. Since Chelsea's takeover by Todd Boehly and Clearlake Capital, the Blues have spent unlike any other club.
- [00:48]
Liam Toomey
Chelsea have confirmed the signing of Joao Felix.
- [00:52]
Unknown Host
An agreement has been reached between Chelsea and Benfica for the British record 105 million pound signing of Enzo Fernandes, a British record trans that takes Moises Caicedo.
- [01:03]
Liam Toomey
From Brighton to Chelsea.
- [01:05]
Ayo Akinwalere
Despite their massive outlays, Chelsea announced a 128.4 million pound profit for the year to June 2024. So how have Chelsea done it? And have they found another PSR loophole? So today we've got with us our Chelsea correspondent, Liam Toomey, and a debut on the Athletic FC podcast for our new dedicated football finance writer, Chris Weatherspoon. Chris, firstly, great to have you with us, but I'm just going to throw you straight into it. I've got a question for you. You know, at the top we said Chelsea has spent big since the takeover almost three years ago now, yet they've announced a profit of more than 100 million pounds for their last accounting year. How on earth have they done it?
- [01:54]
Liam Toomey
A Nice to be here. B. Yeah. What is going on? Yeah, I mean, it's Chelsea, isn't it? I'm sure Liam will agree. It's the weird and wonderful things that go on at Stamford Bridge show no sign of slowing up. But they made 128.4 million pound profit. They lost 90 million a year before that. How did they turn that around? The main answer is, well, they sold the women's team to another group entity for the princely sum of £200 million, which worked out at 198.7 million in profit. But to be fair, the other thing that drove that profit up as well was they set a new English record for selling players. They recorded 152 and a half million profit on player sales last season, which beat Their own record of about 142 million from four years ago. So it wasn't just the headline grabbing women's sale, but it was quite a lot of that.
- [02:51]
Ayo Akinwalere
Okay, Liam, we'll talk about the women's sale in just a bit. But, you know, on the article you dropped on the Athletic on Sunday, along with Dan Sheldon, the top comment from a guy called Brian G reads, financial musical chairs. Round and round we go. When it stops, nobody knows we took the hotel and the women's team out. Circle is getting tighter, music is getting slower. Look, after the sale of the hotels last year and now the women's team, does that sum up the mood amongst supporters you interact with? Round and round we go, the music is getting slower and slower.
- [03:26]
Unknown Host
Profit on disposal of subsidiaries, you'll never see that. I think it's generally slight bewilderment from Chelsea fans because most football fans aren't hugely interested in this stuff, I don't think. At least they don't get into the weeds of it, like Chris certainly does, and I occasionally have to do. And I think they're just slightly bewildered by how abstract it all is, but also how nonsensical it all looks. You know, just the notion of being able to sell something effectively to yourself and book a massive profit in the accounts that isn't real, isn't tangible. The actual ownership hasn't changed, really, other than the name on the paperwork.
- [04:13]
Liam Toomey
Yeah, paperwork, sorry, paperwork is the perfect, like, perfect word for it, because if you look in the accounts, like Chelsea, the Club are owed 200 million by the end of the day that you sold it to. So it's not like there was like, oh, there's actually £200 million of cash. We're going to give you it. It is literally just like a paper transaction that they've done.
- [04:33]
Unknown Host
Yeah. And I think most supporters kind of look at this and go, can we just get back to the football, please? But it's all set within the wider context of the massive recruitment that Chelsea have undertaken under Clearlake Capital and Todd Boehly over the last three years. And that in itself has left a lot of Chelsea fans non plus. I mean, we've spoken about it many times. The fact that they've invested so heavily and at times it feels like almost solely in youth, some of which is not even playing for Chelsea yet and may not play for them for some time. It's really future focused. It is clearly pushing against the boundaries of what they're allowed to do by the Premier League and UEFA's rules. And there's no denying, and I don't think anyone should ever doubt it again, just how creative Chelsea's accountants can be to find ways to make this work. I mean, if you're Everton, you must be absolutely kicking yourself. What were their accountants doing? Did they not think of this? You know, these ways around PSR to avoid points deductions. I mean, whether it's clever or cynical depends on your point of view. They're not actually cheating because it would have to be against the rules for them to be cheating. But it's, it's certainly something that I think people look at and Chelsea fans look at with a raised eyebrow.
- [05:57]
Ayo Akinwalere
Yeah, Chris, I mean, clever accountants, PSR loophole is what comes to mind. But also how sustainable is it to sell assets to yourself and be indebted to yourself as well?
- [06:10]
Liam Toomey
Yeah, I mean, I guess there's probably two strands to that. I mean, ultimately they're going to run out of assets to sell to themselves eventually. And the other point is, I think really this is a loophole that exists within Premier League psr, but it doesn't with UEFA and actually it doesn't with the efl. So, like, the EFL have actually already made rules to stop clubs doing this, which probably doesn't shine the Premier League in the best light. And I think whenever it may come, the idea is that the independent football regulator will also close this loophole. So I think, is it sustainable? Maybe for a little bit longer, but not that much longer. And I guess the issue for Chelsea has been, and obviously they've wanted to fund this massive transfer spend, and so is that Chelsea have no shortage of funding or they have no shortage of ability to get funding. They're the owners, but they see themselves as constrained by the rules. So I guess their argument would be, as I think some other clubs have already tried to argue, is that the rules shouldn't be there. And I think this is their way of kind of showing that thinking.
- [07:16]
Ayo Akinwalere
Liam, without the sales of the women's team and also the hotels, as we've mentioned, over the last couple of seasons, Chelsea would have lost posted losses of 358.3 million pounds. Is there a conversation about long term sustainability? Because from what Chris is saying, ideally this leadership would rather there were no rules, so they could just keep throwing money at it and hope something lands.
- [07:45]
Unknown Host
Well, I think, I mean, there's a dissonance here between words and actions, because the messaging coming out of Chelsea's ownership since the start has been they want to work within football's financial rules. I know people will scoff when they hear that, based on what we've seen them actually do, but their strategy, the fact that they're buying young players on long contracts and trying to put themselves in a position where they can trade players profitably and at scale, is with a view to, so they say, trying to make Chelsea more sustainable. And in the back of their minds, they are operating the club at a significant revenue deficit to rivals, not just because they're out of the Champions League, which is a. Well, they hope, a temporary problem, but because Stamford Bridge its capacity, the match. They income is increasingly a massive issue that's hanging over Chelsea's future viability as an elite club. So that is the kind of logic behind it. I don't necessarily think that they are deliberately trying to torch the rules, but I think that they are doing what they're allowed to do. They're being aggressive. They're being as aggressive as they possibly can be within the loopholes, for want of a better word, that they've identified, that can enable them to stay on the right side, at least the Premier League psr, because I'm sure we'll get onto this. There are discussions ongoing with UEFA about a breach of their financial rules, but I suspect from Chelsea's perspective, that is a little bit less of a concern, because we've already seen if you breach Premier League psi, you get a points deduction, which is no joke, especially if you're trying to make top four, top five, which Chelsea are. You breach UEFA's rules, at least for kind of a first offense, it's more likely a fine from what we've seen. So I think that's a different calculation, isn't it? It in if you're a club that is trying to spend and push things as far as you can.
- [09:45]
Ayo Akinwalere
Okay, well, next we'll focus in on the detail around Chelsea's sale of their women's team, as well as their breach of UEFA's spending limits.
- [09:57]
Chris Weatherspoon
You're listening to the Athletic FC podcast with IO Akinwalere.
- [10:05]
Ayo Akinwalere
Well, in June last year, two days before the 30th of June, PSR cutoff, ownership of Chelsea's women's team was transferred to Bluco, the parent company, for £200 million. Chris, 200 million sounds like a lot of money. Where on earth did they get that valuation from?
- [10:21]
Liam Toomey
Yeah, I think, well, based on Chelsea women's latest accounts, last year they had revenue of 11 and a half million and they lost eight and a half million off that because of the amount that Chelsea spent on the women's team. So 200 million works out at nearly 17 and a half times revenue, which is quite a big multiple. Where did they get the valuation from? You know, it's a good question and I think one of the things that Chelsea would point to is there's a women's team in the women's league in America called Angel City who were sold last September. They went for $250 million, which works out today's rate, works out about 195 million. So you could argue Chelsea are actually, the Chelsea women are the most valuable women's team in the world now, and I guess they would point to that as comparable. But I think it's probably safe to say that women's football is probably more mature in the us. I think really the valuation comes from potential rather than anything that is tangible right now. I think they would argue women's football is only going to grow, and that's where this valuation comes from. It does look high. That Angel City one was very much the kind of outlier, I think, prior to that San Diego wave. They got sold in March of 2024 and they went for roughly £100 million. So we're talking double that. And I think the point to it actually is that, look, Chelsea, I think, were short on PSR last year and they needed something, but they didn't need 200 million. It's not like if they'd done it for 195 million, they would have breached PSR. So I think there's an out. There is clearly an element of using it to get around psr. But I think there's a. There's a broader point of why they've done it, because this does help their future PSR calculations. You know, it gives them more. More headroom to spend and stuff. So the other point to make is the accounts get audited, the valuation passed the muster there, but they do see in the accounts that it's still subject to the Premier League's fair market value. So there is a chance that that comes down. How much it will come down. Very difficult to see if it even will. I'd be very surprised if the Premier League felt comfortable being like, really slashing at it, though.
- [12:40]
Unknown Host
Well, this is the thing, I think what Chelsea have done, and I'm not suggesting this is why they've done it, because we can only speculate as to why they've done it. But I think the really interesting thing about what they've done is it puts the Premier League in an interesting position, assessing the fair market value of this sale, because it is quite hard to value leading women's teams. There aren't many benchmarks to look at. Chris has just mentioned pretty much the only ones we've got to go on.
- [13:09]
Ayo Akinwalere
Chelsea are one of the most, if not the most successful women's team in the wsl. Multiple league titles, multiple domestic cup titles, Champions League finals. You know, like, they're very good under Emma Hayes. They were outstanding.
- [13:22]
Unknown Host
Well, they're essentially peers on a European level with Barcelona and Lyon. Now, they don't actually have the Champions League trophy to show that, although they might get it this season, but they, they clearly are in terms of quality and consistency of success on that same kind of level. But it puts the Premier League in a position of. Are you going to really go to some sort of arbitration process or some sort of adversarial process to argue that the leading light of the WSL is much less valuable than Chelsea claim it to be? Would the Premier League want to be associated with that argument? I don't know. I don't know the answer to that. But I do think it puts the Premier League in an interesting position that they haven't been in before because of the nature of this transaction and the fact that it's a women's team, one of the best women's teams that is at the forefront of an area, a sport that many people think is still in the very early stages of its growth.
- [14:21]
Ayo Akinwalere
What about the sale of the women's team? Because this can't be included in UEFA's financial assessments and neither can the sale of the hotels in the previous year, which actually, we've spoken about it earlier, leaves Chelsea, liam, with a 237 million pounds loss over that two year period. I know it might be a fine, but is it a worry for Chelsea or is there a feeling that, you know what, we'll throw some money behind this and we'll just keep moving?
- [14:44]
Unknown Host
Well, the first thing to say is we don't know how far over Chelsea actually will be by UEFA's internal calculations, because Chris would know more than me. But there are some additional allowable losses that UEFA factor in, aren't they?
- [14:59]
Liam Toomey
Yeah, as do the Premier League. And actually, and this is kind of going back to what I was saying before that they didn't need was like they did their PSR cog and went, we need 200 million, let's value that. Actually, I think it's somewhere short of that because they can deduct what they spend on youth development. Now, these are all estimates because Hardly any clubs. There's only Ipswich and Aston Villa really actually kind of tell us what they spend on these things. Aston Villa last season spent 19.7 million on youth development. I would expect Chelsea to actually probably spend a little bit more than the likes of Aston Villa. I think Chelsea probably are one of the highest in the country, alongside the likes of Manchester United. But even if we did a 20 million a year over the three years, that's 60 million they can deduct the women's team. We can see how much gets spent on the women's team by looking at the accounts over the last three years. That's 41.4 million. So you're over 100 million in deductions already there. And then there's community development expenditure, which is a bit harder to estimate. I think Villas last year was about 7 million. And then they can deduct like fixed asset depreciation. So like the cost of like, infrastructure being on the books and that, and that comes to about 43 million over the last three years. So actually Chelsea have quite big deductions. So I think, don't get me wrong, I think they needed something in order to pass Premier League PSR, but it was nowhere near 200 million. I don't really think it was near 100 million. If we assumed that the hotels were fine to stay, which they have been. So, yeah, I mean, they're going to breach UEFA. They just start. Because even with those deductions I've just gone through, they aren't enough to get them back to the loss limit. But it's not going to be as high as it looks. If you just look at the pre tax loss. And yeah, it does appear that with UEFA they'll get a fine. I think from my perspective. And Levi, I don't know if you've got a view on this. I think the concern for them probably should be going forward because it sounds like UEFA are going to find them. But then, you know, if they keep doing this, that's when they'll start saying, look, no, you don't get to come play in our competitions. And that really, as we've kind of articulated, they need to get back the Champions League. So I think it's going forward really where they need to be wary.
- [17:07]
Unknown Host
When is the worst time to speed? When you've just been done for speeding? Never speed kids. But, you know, that's kind of the principle here, isn't it, that UEFA, I mean, they'd already put Chelsea on a watch list of clubs coming out of COVID with the suggestion that they were one of a number of clubs around Europe that may not have stayed compliant with FFP as it was then, were it not for exceptional Covid deductions. So this would probably be the first yellow card, as it were, for this ownership, but it does mean that UEFA would be looking very closely at you.
- [17:47]
Liam Toomey
Do you think they get some good grace from UEFA as well for the, you know, the historic issues that they self reported? I was thinking about that this morning. I was thinking, you know, first of all, like, okay, it's the right thing to do, but I wonder if part of that, what the thinking was, well, you know, what we've come and told you about these historic things that the last guys didn't tell you about. Does that not help our standard?
- [18:10]
Unknown Host
It's possible. I mean, I think probably the biggest motivation for doing that was to get mitigation on any punishment for that particular offense, and it turned out to be just defined in it. So it's really hard to say whether UEFA would, would extend that kind of goodwill going forward. I mean, I think those of us who've had any dealings with governing bodies on this sort of thing know that they're. They're pretty opaque as to. As to the way they're thinking at any given moment until they announce some sort of decision and reasoning. You. You really don't know where they're leaning. But it does seem pretty clear that Chelsea are going to get some sort of punishment if, as, as it looks, they have breached UEFA's rules. And then it comes down to maybe it's a tighter limit going forward for them over the next two or three years, and they do have to be that bit more disciplined in terms of what they spend versus what they bring in.
- [19:06]
Ayo Akinwalere
Is there any fan reaction, Liam, in terms of splitting or separating the women's team from the men's team? You could arguably say that both have been very, very successful in the history of Chelsea Football Club's tenure.
- [19:20]
Unknown Host
I haven't sensed a big fan reaction to that particular aspect of it. I think a lot of the coverage has just been on the. On the mechanics of selling to yourself, and that has dominated the conversation. But I can say that as someone who has covered Chelsea women for quite a while, albeit not with the same regularity as the men's team. I know there was some level of discomfort always, and this is preceding the current ownership that Chelsea's women's team was traditionally kind of under the umbrella of Chelsea foundation, which almost created the. The impression that it was a charitable endeavor. When by that stage it was an elite sporting operation under Emma Hayes and had been for some time. And so I think there has been a much longer direction of travel to try to give Chelsea women parity within the club with the men. Obviously, financially, that will not be the case for a long, long time, given where the women's game is relative to the men's game, but just in terms of renaming them Chelsea Women from Chelsea Ladies, the increasing frequency of which they play games at Stamford Bridge, play massive games. I'm going to the Champions League semi final against Barcelona in a few weeks. And the way that they are now investing in trying to grow Chelsea Women as a business, and I think in that aspect they are very much sincere in terms of trying. They do see Chelsea women as a big area of growth, given that they win every season, all the time, it seems, and that seems to have outlasted even Emma Hayes herself. I wonder, Chris, could there be any rationale you mentioned that they didn't need 200 million to get past PSR? Could there be any rationale in this valuation of simply establishing a benchmark from their perspective of what Chelsea Women is worth? Because it's already been mooted in the last year or so that Chelsea might look for minority investment in the women's team. They're not looking to sell it, but, you know, an external partner to come in and help provide some extra investment to help grow it. So does putting that valuation on it help that in any way?
- [21:32]
Liam Toomey
It doesn't. It doesn't. I think if there wasn't this kind of the noise around PSR and basically what we're discussing right now, I think there would be a much stronger argument for that. I think really what the kind of. The shame of. Of this is is that people will kind of look upon it and scoff at it because it's seen as just a brazen attempt to circumvent psi. I mean, I went back and had a look at the kind of the announcement Chelsea put out when they originally said they were going to do this, and they said it should sit alongside rather than beneath the men's team. I think that's commendable. And they said, you know, at the moment, any prospective investor in a WSL team is required to invest through a men's team and they wanted to kind of remove that hurdle. And they said they've picked up on a strong desire to invest solely into the women's game. I don't doubt that that's true. I think the problem really is that it's been done in such a way and you know, obviously it's followed on the back of the hotels last year that people kind of scoff at it. But that's football fans. That's people who are following the sport from, with a sport and lens from an investor side of things, you know. Yeah, I mean, like we've already talked about Angel City. I still think, I still think it seems high. Don't get me wrong, it does. But I think in terms of kind of putting down a marker and saying, look, this is what it could be worth and this is where it's headed. And yeah, I can certainly see that that would be the case. I mean, the WSL announced a new TV deal. Was it the start this season? I think obviously it pales in comparison to the men's game and that, but there's a clear like direction of travel in the women's game. And like I say, I'm not going to sit and try and value it here but and it probably is a bit high, but I think there's definitely merit in that suggestion.
- [23:14]
Ayo Akinwalere
Okay, well, let's move on because next we'll talk about Chelsea already spending ahead of this summer's transfer window open.
- [23:23]
Chris Weatherspoon
You're listening to the Athletic FC podcast with IO Akinwalere.
- [23:27]
Ayo Akinwalere
McDonald's meets the Minecraft universe with one of six collectibles and your choice of a Big Mac or 10 piece McNuggets with spicy nether Flame sauce. Now available with a Minecraft movie meal at participating McDonald's for a limited time. A Minecraft movie only in theaters.
- [23:42]
Dane Brugler
Pro Baller Lonzo Ball for Buzzballs ready to go. Cocktails take 12.
- [23:46]
Ayo Akinwalere
Buzz balls just dropped their biggest blue balls.
- [23:49]
Dane Brugler
Script says Biggie's Blue balls Lonzo take 13.
- [23:52]
Ayo Akinwalere
Blue balls just dropped their biggest buzz balls. Ugh.
- [23:55]
Liam Toomey
Let's try a vocal exercise.
- [23:57]
Ayo Akinwalere
Buzz Balls Biggies. Blue balls. Buzz Balls. Biggies Blue balls. Big balls just drop. Get BL with Buzzball. Please read responsibly.
- [24:08]
Unknown Host
Buzzball is available in spirit, wine and malt.
- [24:09]
Ayo Akinwalere
15% Alco Bavo and Buzzballs LLC.
- [24:11]
Chris Weatherspoon
Carrollton, Texas this is the Athletic FC podcast with IO Akumalara.
- [24:20]
Ayo Akinwalere
Liam Osama Johnson detailed a couple of weeks ago on the podcast. Chelsea already splashing the cash ahead of the summer window with a double deal to sign both Giovanni Kenda and also Dario Asugo from Sporting. Look, at the start of last week you wrote about Chelsea fans becoming, dare I say, bored of transfers. I mean, when does the spending stop? And actually when do we start seeing some of these players even Play for Chelsea.
- [24:47]
Unknown Host
Yeah, well, the idea for that piece was very much just observation. The comments on the articles and the news stories that we would publish every time Chelsea agreed a deal for one of these players was some variation of, oh, another teenager, bright future for Strasbourg. Stockpile fc. Give us a transfer ban, please. You know, you don't see this at many clubs. I don't think maybe I'm wrong, maybe it's becoming more common across the board. But it does seem to be particularly loud and notable at Chelsea. And it's worth saying as well that it did begin under the Abramovich era. I do remember because Chelsea did actually have transfer bans in the Abramovich era. I do remember when they were allowed to buy players again. It was like, oh, no, please put us back under a transfer ban because certain fans didn't like the players that were being signed. But it does feel like the scale of it all. Not just the numbers, but the sheer numbers of players. Chelsea have signed more than 40 players under Clear Lake and Boli in the last three years. They've signed or released more than 30 more. So the, the scale of the churn and the speed of it I think has, has left fans understandably a bit dizzy. The fact that they often sign incredibly young players that only, you know, niche tactico accounts and, and influencers either know of or claim to have heard of. Most normal fans have never heard of these guys before they become Chelsea players. I think that adds to the underwhelming nature of it. And when you have deals, particularly like Kendrick Estival now, Giovanni Cuenda, I think Chelsea would regard them on certainly at the more exciting end of the spectrum of players that they're bringing in, given how high they are on those guys potential, it's hard to get fans excited for a player who at the very earliest won't be able to help you for 12 months, 18 months, I mean, Kwenda won't even play for Chelsea next season. So I know Chelsea's argument would be this is all with the big picture, the long term picture in mind. But I think a lot of Chelsea fans look at it and there's a lot of the normal frustrations that you see with other clubs where we need this position, we need that position at Chelsea, it's, you know, why, why won't they sign a striker, why won't they sign a goalkeeper? But it's made more fraught, I think, at Chelsea because they're spending so much and they're signing so many players. While these seemingly obvious holes in the current first team squad are for now left unaddressed. But it is also worth pointing out that they plan to be active again this summer. So who knows, I'm going to come.
- [27:32]
Ayo Akinwalere
On to that as well a little later on. But you know, Chris, I wonder what this long term solution is and whether or not it has anything to do with the sort of the multi club model. And you know, we did a series on multi clubs and the podcast feed a couple of weeks ago and it's really fascinating to explore how multi club models were potentially looking to make money from trading players. I think the conclusion was that there's very few that have actually successfully done it really. But is this something we can see happening with Chelsea, of course, Clear Lake own places like Strasbourg for instance?
- [28:07]
Liam Toomey
Yeah. I'll be honest, when I listened to that series, I was quite surprised by how low the level of trades within groups was. And yeah, I don't know, I mean the Strasbourg question's an interesting one because if they qualify for the Champions League this season, that puts Clear Lake and Bully in a very interesting position because you would have always assumed Chelsea were like the head of the group and.
- [28:31]
Unknown Host
Chelsea become the David Mitchell meme. Are we the sister club?
- [28:37]
Liam Toomey
But yeah, then I think just based on available evidence today, I'm not sure that that is where this will go from the. And obviously Liam's got a much more informed view than me, but from the outside I've always kind of viewed it as is this them kind of, you know, taking advantage of the rules as they are now, building up a squad full of really quite a lot of young players. And that and the intent, obviously there was kind of a lot of mockery of like the big long contracts they were handing out and that being a PSR workaround. But there was a part where they thought, yes, okay, maybe it was a PSR workaround, but is the idea here that they want to have like these youngsters tied down for the bulk of their careers, like they believe in them and, and maybe we'll see the activity, the transfer activity tail off as kind of regulations change. Obviously UEFA have their squad cost rules which were meant to be coming in the Premier League. It still hasn't been ratified, so they're still not coming in. So. But in a way those rules are a little harder to navigate than kind of the loss limit rules. Like as we've seen, Chelsea have found ways to navigate those, whereas if the rules directly target how much you can spend on the, on the squad, it's a little bit harder. So I didn't know if maybe this is a bit like, look, they're private equity, aren't they? And this is what happens often with private equity. They'll spend a lot early and then the idea is that, you know, it then goes off and sorts itself out. So I don't know. I mean, at the moment it doesn't seem like they are going to let up and there is going to be any kind of turning down of the transfer activity. But I do wonder if in a few years time, if we were sat here having this discussion, we'd look back and go, actually, that was like the kind of, they're big, pouring the money in and they've kind of calmed themselves down.
- [30:27]
Ayo Akinwalere
Yeah. Liam, how does wages fit into all this? You know Chris's report, Chelsea's finances? He explained how their wage Bill accounted for 72% of the revenue from last season, the highest of the traditional big six. But we've also so often heard since the takeover about low wages and spreading them out. Is it simply down to the quantity of wages on their payroll?
- [30:49]
Unknown Host
I mean, there was a lot of talk coming out of Stamford Bridge that they'd lowered the average wage to 60, 70,000 pounds a week across the first team before you add in relative bonuses for individual performance, team success, all these sorts of things. Maybe that's true. I was a bit surprised that the wage bill didn't come down more in the accounts that we just saw, given that it was coming down from what was at the time, I think, a record level of 404 million in the 22, 23 accounts. And that was at the time that was a snapshot of when Chelsea's squad was at its most bloated, I think, after they'd done their January 23rd recruitment. So I would have expected maybe a bigger drop. But the counterpoint is, as you say, IO they own a lot of footballers and even if they're not all individually paid a huge amount, if there are more of them, then that still adds up to quite a lot. And I think Chelsea's focus will be more on the revenue side of things. I think they feel pretty good about where the wage bill is, but they don't feel good about the revenue because they want to be a Champions League club and in the medium to longer term, they want a solution to the stadium situation which can unlock masses more in terms of match day and commercial. So in the short term, I think that's why there is such a focus from everyone at Chelsea on trying straining every sinew to get that top Four top five finish this season to get that Champions League money back into the accounts. I mean, it was worth around 80 million to Chelsea the last two Champions League campaigns they had when they reached the quarter final. The Conference League, you're barely in the black, really, even if you win that for a club like Chelsea, and even the Europa League doesn't massively move the needle, although it does help. So, yeah, the Champions League, the revenue side of it, is their focus and the Champions League is very much their focus.
- [32:52]
Ayo Akinwalere
Chris, we talk about the size of this squad and you've called it the most richly assembled squad in football history. A squad cost of £1.437 billion at the end of June 2024. So there's no revenue coming in from Champions League. Liam tells us they're looking at potentially bringing more in in the summer. Where on earth do they find the headroom to operate in this way? I mean, that's the million pound question. Or dare I say billion pound question in this case.
- [33:27]
Liam Toomey
Well, I guess that's the thing. I mean, really, they've got quite a lot of headroom and it's because of, you know, it's because of these transactions. I mean, let's, let's just very quickly, and I'll try to do this without anyone's eyes glazing over. We can have a look at, like. So last season they booked a profit of 128.4 million. They're allowed in a single season. Obviously it gets done over three years, but they're allowed in a single season, 35 million a season. So add them two together, you're just under 165 million. And then so they basically. They had 165 million a headroom last year is what I'm saying. But then you've got all those deductions. We talked about, like 20 million for the women's team, probably 20 plus million for the youth team and that. So really, while they didn't need 200 million to pass PSR last year, this then has an impact going forward, like the next two seasons. Last year is going to be included in the calculation. They're going to have a huge amount of headroom. The funny thing about it is it's almost like. It's almost like they're constantly juggling, because this year I've got them down to make a pretty massive loss, because really, they're not going to have that 200 million unless they find something else to sell before the end of June. They're not, they're not going to have that 200 million Liam's articulated. They had the Conference League, but even if they win the Conference League, I think they start to make about 15 million quid. I think. I think it's something along those lines.
- [34:55]
Ayo Akinwalere
The Champions League's the one. I think we, we did. We deduced that basically by making it, or even making it to the group stages in the Champions League, you earn more money than winning the Europa League. You also earn more money than winning the Conference League as well. So, you know, it's a lot of money to play with.
- [35:09]
Liam Toomey
So I think this year they're going to make a pretty whopping loss. I mean, in the accounts that they just put out, they said that the profit on the players they'd sold since June was only 28 million. So that's like 120 million down on last year. So I think they're going to make a huge loss. But from a PSR perspective, certainly for the Premier League, psr, not UEFA, they could afford to do it because I think really the transaction to sell the women's team last year gave them so much headroom. If you look at just their pre tax loss, it came to 83 million over the three years. So they were already 22 under the 105 limit before we take away all those deductions that we talked about earlier. So they got absolutely loads of room to do it. Problem is, further down the line, you know, they're going to have to juggle it because eventually 23, 24 is going to drop off the calculation and the merry go round starts again and again. This won't cause them to be anywhere close to a breach because the headroom's so big. But one of the interesting things from the accounts was that player amortization, which basically, like the transfer fees getting spread across players contracts, actually went down last year, which when you think, well, hang on, they're spending so much money, how on earth can that happen? And that's basically a byproduct of the big long contracts that they were handing out. Now, the thing that makes it difficult for people like me to do my job now is that both UEFA and the Premier League have said, well, okay, that might be the contract and that might be what you put in the accounts, but from a PSR perspective, you can only spread players contracts across five years. So now actually what you'll find, if we were lucky enough to get hold of Chelsea's PSR calculations, the amortization figure in that would bear little resemblance to what's in the accounts. So I Mean, that would. Like I said, that won't be enough to cause them to be anywhere close to a breach this year. And it is not a surprise to hear Liam say that they plan to be active this summer, but it's a very big. It's a big juggling act. And I think they're probably assuming that the rules that are in place right now won't be in place in three years time, certainly not in the Premier League. So we'll have to see the other.
- [37:19]
Unknown Host
Two things that Chelsea are looking at in the next few months, certainly with an eye towards this summer. One, the Club World cup, which I think they're expecting that to be a significant windfall, which obviously varies depending on how far they get in the competition. But given that you're only playing a maximum of seven games, the bang for your buck, as it were, for the big European clubs participating in that is real. Obviously, Chelsea want to try and win the trophy for the prestige of it, but that's another reason why Chelsea have always been determined to take the Club World cup very seriously. Because if you add that to the admittedly very modest Conference League income, you might get a bit closer to what a year in the Champions League looks like. And the other thing in the summer that they're looking at is something that they'll be looking at in every summer, as far as the eye can see, is that as well as buying, they will be looking to sell and sell a lot. Because when you have this many players, you've deliberately put yourself in a position where you have to trade both ways. You can't just keep adding footballers. I know that's like the perception of the outside of Chelsea, but they do also sell a lot and they're going to need to keep selling a lot in order to keep this wheel turning.
- [38:36]
Liam Toomey
And I think the Club World Cup 1 is a good point to bring up as well, because now that 30 June has become such an important date in club calendars, if they go far in the Club World cup and if they win it, they'll book like half of the money. They won't work out as exactly half, but they'll book a chunk of it this season and a chunk of it next season. So I think. So that'll again, like what I was saying before about, like, further down the line, that'll help them in the future and stuff. But, yeah, I can definitely see why they would like the couple. The amounts that are on offer for that tournament are huge, and especially to a club like Chelsea who aren't in the Champions League this season.
- [39:14]
Ayo Akinwalere
All right, let's leave it there. And I hope at some point, Liam, and I'm sure we'll have this chat again at some point they'll start winning things and it will all click into gear because that's why they're doing it. Right? Anyway, that's another question for another time. Liam, Chris, thank you so much for your time. And thank you guys for listening as well. That's it for now. Thanks so much for joining us.
- [39:33]
Chris Weatherspoon
You've been listening to the Athletic FC Podcast. The producers were Guy Clark, Mike Stavroot, and Jay Beal. The exact executive producer was Ailee Moorhead. To listen to other great athletic podcasts for free, search for the Athletic on Apple, Spotify and all the usual places. The Athletic FC Podcast is an athletic media company production.
- [39:55]
Unknown Host
The Athletic FC Podcast Network.