https://x.com/martynziegler/status/1908450203704717711?s=46Chelsea facing Uefa fine and potential ban after overspending
Governing body will not allow Chelsea to count income from £200million sale of women’s team and sale of hotels to sister companies, with club facing ban from Europe if they reoffend.
Chelsea have breached Uefa’s limits on financial losses for last season after the European governing body did not allow the club to count as income selling its women’s team to a sister company for a world-record value of £200million.
The Sunday Times has learnt that Chelsea are now in talks with Uefa over a settlement which is likely to involve the club paying a financial penalty and agreeing to a spending plan for the next three seasons. That plan could include the threat of stiffer sanctions such as exclusion from European competition for a season if they breach the limits again.
The outcome of the settlement is due to be made public by Uefa in mid-May.
Unlike the Premier League, Uefa’s financial rules do not allow clubs to declare income from selling assets to sister companies. As well as £200m from the Chelsea women’s sale to the sister company Blueco 22 Midco Ltd — the actual value was revealed in accounts published by Companies House on Saturday showing a £198.7m paper profit — Chelsea registered income of £76.5m from the sale of two hotels to another sister company in June 2023.
That sum also has to be removed from Chelsea’s balance sheet when it comes to assessing its compliance with Uefa’s limits on financial losses.
Uefa allows clubs to lose a maximum of 200m euros (£170m) over three years and without the income declared from those related-party sales Chelsea have a total three-year loss of £358m. Deductions can be made by the club for spending on youth and women’s teams and on infrastructure so the scale of the breach is not known but is likely to be significant.
Uefa also has a ‘squad cost’ rule that says clubs cannot pay more than 80 per cent of their agreed revenue on player wages, transfers and agents fees. That will reduce to 70 per cent next season.
Sources confirmed Chelsea are already in talks with Uefa over a settlement and ‘sustainability plan’. The owners, Todd Boehly and Clearlake, are said to be relaxed about the position and maintaining good relations with Uefa. At least three other European clubs are also believed to be in breach of Uefa’s rules.
The sale of the women’s club and the hotels helped Chelsea pass the Premier League’s profit and sustainability rules (PSR) — the top-flight clubs voted last June against closing the loophole, which allows income from such sales to sister companies to be registered.
Chelsea FC Holdings Ltd’s accounts however warn that the £200m from the women’s club sale is subject to assessment by the Premier League and could be reduced.
The accounts also reveal that the £76.5m value of the hotels sale was not approved by the Premier League and Chelsea have now had to take £6m off and record the actual value of the deal as £70.5m.
A further sum of £17.1m has been recorded as “other operating income” for Chelsea after the club “recharged” the sum to their parent company for the 2022-23 financial year. “It is management’s judgement that the amounts represent costs which were only incurred due to the acquisition of the group by Blueco 22 Ltd and therefore should be borne by the parent company,” the accounts state.
Football financial experts have been sceptical about the high valuation of the Chelsea women’s team. Its accounts show it had turnover of just £11.5m and made a loss of £8.4m last season.
Christina Philippou, a professor in accounting and sport finance specialising in women’s football at the University of Portsmouth, said the figure should “be in the £50m to £80m bracket”.
The most ever paid for a women’s football team was the $250m (about £194m) paid for the United States team Angel City, which plays in the National Women’s Soccer League (NWSL).
