Chelsea Posts Loss Of £49M In '12-13 Fiscal Year, But Still Reports Record Revenue
Chelsea had a loss of £49.4M during the '12-13 fiscal year "after income was held back by elimination from the Champions League in the group stage," according to Peter-Joseph Hegarty of BLOOMBERG. The London-based team "still had record revenue" of £255.8M for the year through June 30, "during which it won the second-tier Europa League." Sales "were boosted" by a 19% increase in commercial income to £79.6M. The previous year’s profit of £1.4M came after a “significant’’ player trading surplus and an "exceptional profit" on the cancellation of Sky Broadcasting shares in its digital media operation, "factors absent from the latest year" (BLOOMBERG, 1/2). In London, Owen Gibson reported Chelsea has "insisted they remain on track" to comply with UEFA's Financial Fair Play rules, "despite plunging to an annual loss" of £49.4M. The figures show that, for all the club's "long-stated ambition to operate at break-even" following a decade in which they have been subsidized by Owner Roman Abramovich to the tune of more than £1B, "they remain loss-making." Last year, Chelsea "posted a first profit of the Abramovich era and claimed it marked a milestone in their journey towards self-sustainability," though it later emerged that the profit of £1.4M owed much to a one-off £18.4M share windfall. For the 12 months ending in June, however, the results "show a return to heavy loss‑making ways" (GUARDIAN, 12/31).
PLAYING FAIR: REUTERS' Tony Jimenez reported FFP regulations state that a club "can have a deficit of no more than" €45M ($62M) a year. However, Chelsea Head of Communications Steve Atkins said that "because of complicated accounting rules," Chelsea's actual loss was around £34M. Chelsea said, "The latest financial result combined with the previous year's profit of 1.4 million pounds means for the first monitoring period for FFP regulations -- which spans the 2011/12 and 2012/13 seasons -- we will fall comfortably within the break-even criteria set by UEFA. We have the fifth highest revenue of all football clubs in the world according to the latest published Deloitte figures" (REUTERS, 12/31). In London, Roger Blitz reported Chelsea Chair Bruce Buck said that under Abramovich’s ownership Chelsea’s long-term objective "had been financial sustainability." Buck: “We are pleased therefore that we will meet the stipulations set down by UEFA in their first assessment period.” UEFA "will spend the next few months assessing each club’s finances over the last two seasons before announcing in the Spring which clubs have failed to comply with its regulations." Earlier this season, UEFA said that at least five clubs "were at risk of breaching its rules." Clubs "expected to come under particular scrutiny" are Qatari-owned Paris St. Germain and Man City, owned by the Abu Dhabi ruling family (FINANCIAL TIMES, 12/31).
MEETING GUIDELINES: In London, Jeremy Wilson reported UEFA’s "acceptable variation for the next monitoring period," the three accounting years from '11 to '14, is also £37.5M. It means that Chelsea must not lose more than about £4.5M in the current financial year, '13-14, "to comply with FFP." The challenge then "gets even harder," with UEFA "only accepting losses on a rolling three-year basis" of a maximum of £25M ($41M). Given that these new '12-13 accounts will form the first year of that equation, Chelsea "will actually have to make an overall profit" of around £9M ($14.8M) over the next two years "to meet the Uefa guidelines" at the end of the monitoring period in '16 (TELEGRAPH, 12/31).