Cancelled Shares Allow Chelsea To Record First Profit Under Roman Abramovich

Chelsea's first profit under Owner Roman Abramovich from its Champions League-winning year was "only achieved as a result of one-off exceptional items," including a £18.4M paper profit on cancelled shares in a digital media joint venture with BSkyB, according to Owen Gibson of the London GUARDIAN. When Chelsea unveiled its top-line figures in November, the Premier League club said the £1.4M profit was the result of its "European success, a sizeable profit on transfers and improved commercial deals." The full accounts, lodged at U.K.'s Companies House on Wednesday, show that the profit stemmed partly from the cancellation of £15M in "shares held by BSkyB in a digital media joint venture" of which the club took full control, and £3.4M of "dividends from those shares." While the figures "still support the club's case that they are controlling costs and moving towards a sustainable model that would comply with Uefa's rules," wages rose by just £8M to £176M. For example, critics will claim that it is "disingenuous to publish the top-line figures without accompanying accounts" (GUARDIAN, 1/9).

FAIR PLAY: BLOOMBERG's Tariq Panja reported Abramovich has spent more than $1B to help Chelsea win three Premier League titles. Last season, he became the first London team to win Europe’s elite Champions League. However, his "largesse has come at a cost." Chelsea has suffered an average loss of £77.6M during the previous seven seasons under Abramovich. Chelsea is among top European clubs "trying to ensure" it meets new fiscal requirements set by UEFA. Teams that fail to keep losses below €45M ($59M) across three seasons "face sanctions that include a ban from the Champions League." (BLOOMBERG, 1/9). In London, Roger Blitz reported Chelsea Secretary Alan Shaw said UEFA's Financial Fair Play regulations posed "a significant challenge." The club will have to endure "weaker Champions League revenues" after its failure to reach the knockout stages of the competition. Its playing staff and coaching numbers rose by 20 to 89 (FINANCIAL TIMES, 1/9).