Chelsea make a loss as revenues flat-line, but what of the future?
Posted on January 9, 2020
CHELSEA received almost a quarter of a billion pounds in additional funding from owner Roman Abramovich as the club made a loss of around £ 100 million in 2018-19.
Chelsea’s turnover totalled £ 447 million which was more or less on par with 2017-18 (£ 443) as a result of lower broadcasting (£200m) and matchday income (£67m) streams. Commercial income was up by 9% to £ 180 million, largely due to a string of new sponsorship agreements.
Although the club did not have the benefits of UEFA Champions League revenues, Chelsea enjoyed success in the Europa League, winning the trophy in Baku. However, the income from UEFA’s second competition does not compare to the lucrative Champions League.
The figures suggest Chelsea may have difficulty in growing revenues significantly given the relatively modest-sized Stamford Bridge stadium. With the club’s main London rivals all playing in stadiums of 60,000 capacity, Chelsea are certainly restricted with their 41,000 capacity. There is no sign that the new ground project that was abandoned two years ago will be rekindled any time soon. Abramovich is still an absent owner due to the problems he has had with the UK authorities.
Until Chelsea are able to increase their capacity, they will trail behind their domestic peers in terms of revenue generation. While income compares favourably to London rivals Arsenal (£368m), Manchester City, for example, reported income of £ 535 million for 2018-19.
Chelsea’s average league attendance at home in 2018-19 was 40,436 which was slightly down on 2017-18 due to work to improve disabled facilities at the ground.
Another issue that should perhaps concern Chelsea is the amount of money they had to pay former manager Antonio Conte. The 2018-19 financials show an exceptional figure of £ 26.6 million which they described as “changes in the men’s team management and coaching staff, together with associated legal costs”. How much have Chelsea paid out in compensation to managers over the past 16 years? Given that most appointments do not go to full term, pay-offs must be a regular “exceptional” cost in the Abramovich era.
Chelsea’s wage bill increased by 17% to £ 286 million, which is more than £ 80 million higher than Arsenal but some £ 30 million less than Manchester City and £ 50 million lower than Manchester United. It will be interesting to see what 2019-20’s salaries will look like, especially as the club lost Eden Hazard in 2019 and started to field more young players. It is not an unreasonable assumption the wage bill may be smaller.
Losing around £ 2 million per week should hoist a red flag or two at Chelsea, even though their financial backing is undoubtedly solid and in 2018 and 2017, the club made a profit. Rumours that Abramovich is losing interest appear to be fanciful given his continued investment in the club. And just before Christmas, media reports said Abramovich turned down an offer for the club from the owner of the LA Dodgers baseball team, Todd Boehly. Apparently, Abramovich valued Chelsea at £ 3 billion. How many people in the world are able that pay that much for a football club? Is Abramovich pricing himself out of the market?