Chelsea’s efforts to meet UEFA’s financial regulations have become more challenging after the European football governing body announced it will not permit clubs to count income from selling assets to affiliated companies.
Chelsea co-owner Todd Boehly has managed to reduce some of the club’s losses by selling two of the club’s hotels to a related company for £76.5 million.
Additionally, the women’s team was sold to Chelsea’s parent company just two days before the financial year ended in June.
While the Premier League allowed these financial moves due to an existing loophole, UEFA has confirmed that clubs will not be allowed to report income from such asset sales.
Complying with UEFA’s financial rules is already more stringent than adhering to the Premier League’s guidelines. The Premier League’s Profit and Sustainability Rules allow clubs to incur losses of up to £105 million over three years, while UEFA’s ‘football earnings’ rule limits losses to just £34.5 million over two seasons.
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If Chelsea fails to meet these standards, they could face various penalties, including a potential ban from European competitions.
However, any sanctions would not affect their participation in this season’s Europa Conference League, but would instead apply in the following season.
In a similar case from 2019, AC Milan reached an agreement with UEFA to accept a one-year ban from European competition due to several financial infractions.
Chelsea’s latest financial statements, released in April, include a reaffirmation from Boehly that the club is on track to comply with UEFA’s regulations.”The club continues to balance success on the field together with the financial imperatives of complying with UEFA and Premier League financial regulations,” he said.
“The club has complied with these since their inception in 2012 and expects to do so in the foreseeable future.”
Boehly and Clearlake had already spent over £1 billion on transfer fees even before the start of this summer’s transfer window.
The London club has generated some revenue by selling players like Conor Gallagher and Ian Maatsen, but their spending has once again far exceeded their income, with new signings such as Pedro Neto and Joao Felix adding to the expenditure.
The Blues reported a loss of £89.8 million for the 2022/23 season, leaving them far beyond UEFA’s financial limits unless they can recover a significant amount during the 2023/24 season, a period when they lacked the revenue boost from European football.
Football finance expert Kieran Maguire suggests that it may be “more than challenging” for Chelsea to comply with UEFA’s financial regulations this time around.
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