Thank you, Mr Abramovich – Chelsea lose heavily, but wages climb

CHELSEA really did hit the jackpot when they were taken over by Russian oligarch Roman Abramovich in 2003. He has not only presided over one of the big success stories of 21st century football, funding the unprecedented growth of the club and covering financial shortfalls, but trophies have poured into the Stamford Bridge boardroom at an average of almost one a year. 

In the current climate, Chelsea’s ownership model has allowed the club to ride the waves of the pandemic, even though in 2020-21, they made a massive pre-tax loss of £ 155.9 million. But the Blues rewarded Abramovich with their second UEFA Champions League triumph, won in an all-England final against Manchester City in Porto. This brought the total number of major trophies won by Chelsea in the Abramovich era to 17 in 18 seasons.

Furthermore, Abramovich sanctioned the spending of £ 222 million on new players in 2020-21, including big names like Kai Havertz (£ 72m), Ben Chilwell (£ 45m), Timo Werner (£47m), Hakim Ziyech (£ 36m) and Édouard Mendy (£22m). Abramovich’s backing, whatever the fans may think of it, has proved to be resolute, consistent and unwavering. This has cushioned Chelsea during a difficult time for the game and allowed them to remain highly competitive in the transfer market, even if they did suffer a transfer window ban.

Trophies in the Abramovich era

PLFA CupLge CupUCLEuropaTotal
Chelsea5532217
Man.United5241113
Man.City5260013
Arsenal150006
Liverpool111205
Leicester110002
Tottenham001001
Wigan Ath010001
Portsmouth010001
Birmingham001001
Middlesbrough001001
Swansea City001001

Chelsea’s pre-tax loss, while having limited impact, could so easily have been less, although the influx of new talent obviously pushed their expenses up. But the deficit of close to £ 156 million represented a negative swing of £ 185 million from the profit of £ 35.7 million made in 2019-20.

Turnover increased by 7% to £ 434.9 million, largely thanks to a 50% rise in broadcasting income to £ 274 million. Unsurprisingly, given that most games were played behind closed doors, matchday revenues slumped by 86% to £ 7.7 million.

Against this backdrop, Chelsea’s wage bill soared by £ 49.4 million, a rise of 17%, translating into a wage-to-income ratio of 77%, a jump of seven percentage points on 2019-20.

Abramovich’s ownership of Chelsea has also been characterised by a revolving door on the manager’s office. Trophyless seasons are rarely tolerated and in the 18 years since he arrived in London SW6, the club has never gone more than one season without some form of silverware. Ironically, the two Champions League successes have come in a year in which the manager changed mid-term. In 2012, Roberto Di Matteo was effectively a stand-in manager and in 2021, Thomas Tuchel was appointed after the first half of the campaign under the popular Frank Lampard suggested a second consecutive barren season was unfolding.

Season-by-season trophies

SeasonCupsWinning coachWage bill
£
2003-040 Ranieri116m
2004-052Premier, EFL CupMourinho109m
2005-061Premier Mourinho114m
2006-072FA Cup, EFL CupMourinho133m
2007-080 Grant172m
2008-091FA CupHiddink166m
2009-102Premier, FA CupAncelotti173m
2010-110 Ancelotti190m
2011-122Champions League, FA CupDi Matteo171m
2012-131Europa LeagueBenitez176m
2013-140 Mourinho191m
2014-152Premier, EFL CupMourinho216m
2015-160 Hiddink222m
2016-171PremierConte220m
2017-181FA CupConte244m
2018-191Europa LeagueSarri286m
2019-200 Lampard284m
2020-211Champions LeagueTuchel333m

Chelsea also depend on player trading as part of their business model and in 2020-21, they made a profit of £ 27 million from sales, a big decline on 2019-20 when the sale of Eden Hazard to Real Madrid boosted their bottom line. Among the players unloaded in 2020-21 was Victor Moses, who joined Spartak Moscow after multiple loan periods. Chelsea had around 40 players out on loan at various stages during 2020-21, a strong feature of their player trading activities.

Between 2003-04 and 2020-21, Chelsea spent £ 2 billion on new players but also recouped over £ 1 billion on player sales. Their net outlay during this period was £ 950 million, a figure exceeded by Manchester City (- £ 1.3bn) and Manchester United (-£962m).

Chelsea’s squad, valued at € 790 million by Transfermarkt, had 10% of the Guardian’s top 100 players for 2021 and four of the top 30 most valuable players according to KPMG’s Football Benchmark. Furthermore, no club had more players than Chelsea’s 15 among the Euro 2020 squads.

While Chelsea are in a privileged position, they have one glaring weakness in their model and that is dear old Stamford Bridge. A neat, modern ground it may be, but the capacity of 40,000 is way behind the elite group dominating Europe. Whether the project to create a statement stadium designed by the likes of Herzog & De Meuron is rekindled now that Abramovich has more flexible movement remains to be seen. But with fellow Londoners Arsenal, Tottenham and West Ham all boasting 60,000 capacity arenas, Chelsea are missing out on a huge chunk of revenue.

It also means a lot of Chelsea fans are unable to see the team at Stamford Bridge because of limited ticket availability. However, their global franchise is underpinned by a vast social media following that numbers almost 100 million across the three main platforms (Facebook, Instagram and Twitter). Only Manchester United have more followers in the Premier League.

Chelsea’s position in post-pandemic European football is relatively robust compared to many of their peers in England. It is worth noting, though, that since Pep Guardiola arrived at Manchester City, the trophy haul has been eight to City, four to Chelsea and since 2011 when the new City won their first piece of silverware, they have lifted 13 to Chelsea’s nine.

Although the club remains reliant on the financial support of its parent company, Fordstam, there is no sign the Abramovich era is coming to an end any time soon. The enigmatic Russian has proved he acquired Chelsea for the long haul.

2 thoughts on “Thank you, Mr Abramovich – Chelsea lose heavily, but wages climb

  1. Good article right up to the Transfer ban but. This was not due to breaking FFP, it was for the illegal signing of players from abroad.

    This glaring mistake makes me question the research for the rest of the piece, and so I have deemed it inaccurate. Maybe the author should rewrite this bit, as it takes away any credence the article may have had.

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