Last time, I wrote about Fulham. Time now to broaden our horizons, and where better to start than Fulham’s near-neighbours Chelsea. They’ve just had a triumphant season on the pitch, with victory in both the Champions League and the FA Cup. On the other hand, they didn’t maintain their usual standard in the Premier League, finishing only sixth. So where does all that leave Chelsea’s finances? Here’s how it looks to me.
1. The relatively weak Premier League finish won’t have hurt much. It will have meant about £3m less in prize money than the year before. But the FA Cup win will have made up for that – winning a semi-final is worth just under £1m in prize money, winning the final is worth nearly £2m, and the clubs that play in these matches get some of the gate proceeds as well. Meanwhile…
2. …winning the Champions League has a big financial effect. Chelsea usually earn around £30m from that competition. But for winning it, they got £50m. And with numbers like that…
3. …it’s no wonder that Abramovich’s trigger finger started to itch when AvB’s faltering team began to look as though it might miss out on Champions League qualification. Rich beyond the dreams of avarice he may be, but £30m of Champions League income is no small matter.
4. It’s been a good year for sponsorship income too. A new deal with Adidas took effect, increasing the amount they pay Chelsea from about £10m to over £20m. (Samsung pay about £13m.) All this means that…
5. …it was probably a record year for Chelsea, in terms of income. I reckon that they will have pulled in a whopping quarter of a billion pounds for the season just ended. To put that in context, it’s about three times as much as Fulham bring in each year.
6. The average Chelsea player earns about £120K a week. That’s my best estimate, anyway, and it certainly ties in with press reports that the likes of Lampard and Terry get around £150K, with lesser lights like Sturridge and Cahill on £80-90K. That’s pricey stuff – it means, for instance, that the £30m Chelsea usually earn from the Champions League only pays the wages for a couple of months. Which in turn means that…
7. …Chelsea are nowhere near self-sufficiency, even after winning the Champions League. Having spent heavily last pre-season (on Lukaku, Mata, and Meireles – and of course AvB’s Porto release clause) I reckon their cash outflow for the season will have been nearly £50m. If so, then…
8. …only once in the past five seasons have Chelsea broken even in cash terms (in Ancelotti’s first year, 2009-10). The aggregate cash outflow over that period will have been some £250m. It would be a bit less if they didn’t have such a penchant for sacking the world’s most highly-paid managers: they’ve shelled out a cool £60m in getting rid of the Special One, Big Phil, and Ancelotti himself. However…
9. …the Roman Empire can probably cover Chelsea’s cash needs easily enough. At an annual average of about £50m, it’s roughly equivalent to the interest on, say, one or two billion pounds – and Abramovich has eight billion. Which helps to explain why…
10. …the cash outlay on transfers this summer is already huge. It’s at least £60m (Hazard and Oscar, plus an undisclosed fee for Marin). Some of that may be deferred, or contingent on appearances, so it may not all flow out this season. And there may yet be some cash in from player sales. But at the same time…
1. The relatively weak Premier League finish won’t have hurt much. It will have meant about £3m less in prize money than the year before. But the FA Cup win will have made up for that – winning a semi-final is worth just under £1m in prize money, winning the final is worth nearly £2m, and the clubs that play in these matches get some of the gate proceeds as well. Meanwhile…
2. …winning the Champions League has a big financial effect. Chelsea usually earn around £30m from that competition. But for winning it, they got £50m. And with numbers like that…
3. …it’s no wonder that Abramovich’s trigger finger started to itch when AvB’s faltering team began to look as though it might miss out on Champions League qualification. Rich beyond the dreams of avarice he may be, but £30m of Champions League income is no small matter.
4. It’s been a good year for sponsorship income too. A new deal with Adidas took effect, increasing the amount they pay Chelsea from about £10m to over £20m. (Samsung pay about £13m.) All this means that…
5. …it was probably a record year for Chelsea, in terms of income. I reckon that they will have pulled in a whopping quarter of a billion pounds for the season just ended. To put that in context, it’s about three times as much as Fulham bring in each year.
6. The average Chelsea player earns about £120K a week. That’s my best estimate, anyway, and it certainly ties in with press reports that the likes of Lampard and Terry get around £150K, with lesser lights like Sturridge and Cahill on £80-90K. That’s pricey stuff – it means, for instance, that the £30m Chelsea usually earn from the Champions League only pays the wages for a couple of months. Which in turn means that…
7. …Chelsea are nowhere near self-sufficiency, even after winning the Champions League. Having spent heavily last pre-season (on Lukaku, Mata, and Meireles – and of course AvB’s Porto release clause) I reckon their cash outflow for the season will have been nearly £50m. If so, then…
8. …only once in the past five seasons have Chelsea broken even in cash terms (in Ancelotti’s first year, 2009-10). The aggregate cash outflow over that period will have been some £250m. It would be a bit less if they didn’t have such a penchant for sacking the world’s most highly-paid managers: they’ve shelled out a cool £60m in getting rid of the Special One, Big Phil, and Ancelotti himself. However…
9. …the Roman Empire can probably cover Chelsea’s cash needs easily enough. At an annual average of about £50m, it’s roughly equivalent to the interest on, say, one or two billion pounds – and Abramovich has eight billion. Which helps to explain why…
10. …the cash outlay on transfers this summer is already huge. It’s at least £60m (Hazard and Oscar, plus an undisclosed fee for Marin). Some of that may be deferred, or contingent on appearances, so it may not all flow out this season. And there may yet be some cash in from player sales. But at the same time…
11. …income looks likely to fall this season. That’s because the lion’s share of Champions League proceeds go to the sides that finish first or second in their domestic league (or that actually win the thing). The way the euro is currently losing value against the pound is also ominous (CL prize money is paid in euros). So…
12. …it looks to me like another £50m of cash out at Chelsea this season. (Even without sacking the manager.) All in all, it’s hard to see Chelsea as a club that’s mending its spendthrift ways in response to Financial Fair Play.
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