Todd Boehly and Chelsea have five days to fix £100m FFP nightmare

Chelsea face a race against the clock to raise funds to comply with the Premier League’s Profit and Sustainability Rules before the end of the month.

The Blues are one of several Premier League sides that are under pressure to engage in player trading to ensure they are not at risk of breaching the division’s financial regulations.

Last week, the Blues, Aston Villa and Everton were the talk of the game as several home-grown players moved between the clubs in deals that raised eyebrows across the Premier League. Chelsea are also set to sell Ian Maatsen.

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However, Chelsea will need to do more than offload Maatsen, who is set to join Aston Villa in a £35m deal – if they are to avoid becoming the third Premier League club to be found guilty of breaching Profit and Sustainability rules.

Reach PLC’s Business of Football Writer Dave Powell has assessed the financial predicament Chelsea find themselves in ahead of the end of the financial year on June 30.

“Chelsea’s approach to the transfer market under the ownership of Todd Boehly and Clearlake Capital has proven to be enormously disruptive, although the fruits of the efforts are yet to be seen on the pitch,” said Powell. “Transfer spend of more than £1bn since their arrival in 2022, including breaking the British transfer record twice in the space of 12 months to land Moises Caicedo and Enzo Fernandez, has been offset considerably by the club’s ability to player trade to a level that no other Premier League side has been able to match.

“Having such a conveyor belt of talent from the Cobham Academy has allowed the club to realise pure accounting profit from their sales, with them holding no book value. Losses of £90m last year, and £121m for the 2021/22 financial year have meant that a high volume of player trading has been vital.

“Revenue for the 2022/23 period stood at £512.5m, although estimates from football finance expert Swiss Ramble suggest that the revenue for the current financial year could be driven down to £460m, although the wage bill is likely to be significantly lower.

“Ian Maatsen is set to complete a £37.5m move to Aston Villa this week, with 18-year-old Omari Kellyman heading the other way in what is reported to be a £19m deal with a six-year contract. In the wake of Chelsea offering long contracts to new signings to reduce annual amortisation charges, all signings are limited to a maximum amortisation period of five years, regardless of contract length.

However, research from Powell shows that the Blues are still roughly £100m short of falling in line of the Premier League’s Profit and Sustainability rules, which landed Everton two separate points deductions last season.

“For Chelsea, Maatsen represents pure profit that can be booked prior to financial year end, while a £19m deal, if that sum was guaranteed up front, would add £3.8m in amortisation charges,” added Powell.

“But including that sale, Swiss Ramble estimates point to Chelsea needing a little over £100m still to remain compliant. Selling more players with a high level of profit would go some way to addressing that, but given Conor Gallagher had long been seen as a potential makeweight in that respect, him being with England at Euro 2024 likely stymies the ability to get a deal done in a swift manner ahead of the financial year end, meaning that the impetus may not be there to do a deal into a new financial year.

“What that points to is the potential for Chelsea to conduct another inter-company asset sale/purchase, as they did for the last accounting period with the club’s hotel. One potential option has been the sale of the Cobham Academy training ground and its parcels of land being sold to an intra group company, allowing the club to book those profits and ease PSR concerns.

“Chelsea either had, or has, to do something in order to make themselves PSR compliant for the coming financial year.

“One alternative could be a willingness to take a sanction and look at it as valuable transfer work that has laid the foundation for future success, but that would come with a points deduction that could impact the ability to qualify for the Champions League and book valuable future transfer revenue, although the club will know that it has the lucrative and revamped FIFA Club World Cup to look forward to in 2025 in the USA, something that has been reported to be worth potentially £50m to successful clubs.”