If Todd Boehly, Clearlake Capital and the rest of the ownership regime give their blessing, Chelsea are in a position to capitalise on their momentum on the pitch going into the January transfer window.
The 2-0 win over Heidenheim last night maintained their 100 per cent record in the Europa Conference League, while Enzo Maresca’s side are in 3rd place in the Premier League having lost only twice.
In years gone by, that would be an unremarkable set of achievements at Stamford Bridge. But the chaos that has characterised the post-Roman Abramovich era so far has shifted Chelsea fans’ perspective.
In reality, 3rd in the Premier League is still a major underperformance relative to the astronomical sums invested by Todd Boehly, Clearlake and other members of the regime.
The appointment of tracksuit manager Maresca, however, was a tacit admission that 2024-25 is as much about developing players and increasing their value as it is about results on the pitch.
Enzo Maresca, Manager of Chelsea, shouts from the touchline during the Premier League match between Leicester City FC and Chelsea FC at The King Po...
Photo by Chris Lee – Chelsea FC/Chelsea FC via Getty Images
The caveat here is that Champions League qualification is a must, both in the context of prize money next season and the wider long-term health of the business.
Without it, Chelsea’s leverage in talks with potential commercial partners – which the owners consider a key part of their strategy – is decimated.
MORE CHELSEA STORIES
In an instance of Déjà vu from 2023-24, the Blues have failed to secure a front-of-shirt sponsor so far this season. Without Champions League exposure, their £60m asking price is simply too high.
Ahead of the January window therefore, investing in the squad is a gamble but one the owners may feel they can’t afford not to take if it gives a better chance of a return to Europe’s top table next term.
However, thanks to three pesky letters, Maresca and his dual sporting director team of Paul Winstanley and Laurence Stewart may not be able to spend as freely as they would like.
An infographic explaining how PSR (Profit and Sustainability Rules) work in the Premier League and UEFA
Chelsea have so far bypassed PSR, or Profit and Sustainability Rules, with some innovative accounting methods and a fair degree of filibustering.
That said, the chairman says he is wholly confident that his club are on track to comply with both UEFA and Premier League PSR this season despite the forecast of a £100m loss for the last financial year.
But with Newcastle’s Alexander Isak linked with the Blues alongside the likes Ricardo Pepi from PSV, can Chelsea pull another rabbit out of the hat and free up the PSR headroom to go big in January?
Premier League fail to close PSR loophole: An opportunity for Chelsea?
One method Chelsea have used to circumvent PSR is intra-company sales.
In layman’s terms, this involves the owners selling an asset to another company in their network. Basically, taking money out of one pocket and putting it into the other.
It doesn’t improve the health of the club as a business in cash terms, but it does carve out more breathing space under PSR.
Infographic showing Chelsea's revenue in recent years and the breakdown between commercial matchday and media income.
Chelsea have taken advantage of this by selling two hotels and the women’s team to another entity in the BlueCo network. It may have added almost £250m to the PSR calculation.
Unlike the practice of amortising new signings over ultra-long contracts, the Premier League – although not UEFA – have not yet closed this loophole.
With Chelsea’s accounts showing £156m of intangible assets (AKA non-player assets) on the books, could they repeat this trick to create even more financial flex?
Chelsea balance sheet
“They have got something of a green light here,” says Kieran Maguire, a football finance lecturer at Liverpool University and author of the Price of Football.
“With UEFA’s transition to a soft wage cap, I think Chelsea are in a moderately strong position.
General view of the Chelsea corner flag during The Emirates FA Cup Fifth Round match between Chelsea and Hull City at Stamford Bridge on February 1...
Photo by Catherine Ivill/Getty Images
“They don’t get credit for the level of player sales they have compared to the rest of the Premier League.
“In the last three seasons, they have got player sale profits of £200m. Chelsea make more money from player sale profits than they do on matchdays.
“It’s a wild card but, realistically, you can only play the card once.
“Chelsea have made efforts to get big earners of the wage bill, but we have just seen the likes of Palmer get a new contract which will have come with a big pay rise.
UEFA PSR might not be an issue for Chelsea
The intra-company loophole sales are not recognised by UEFA, whose PSR system is stricter both in terms of its allowable loss limit and the newly-introduced squad cost rule.
However, while Chelsea could well breach UEFA PSR this calendar year, that might not necessarily be the worst thing.
Why? Because UEFA appears to have set a precedent of handing out miniscule fines for those who are found to have exceeded the threshold.
Barcelona breached by £222m and were handed a fine of less than one per cent of their revenue. That would be easily absorbed by the billionaire owners.
Related Posts