Roman Abramovich Owned Chelsea Records Losses Worth £96M
Financial accounts for the 2018/19 season show Roman Abramovich owned football club, Chelsea to have witnessed an after tax loss of £96m ($126.3m exchange rate 1.31) for 2018-19. The fall out is major as compared to the £60m profit generated in the past 12 months.
Even though Chelsea enjoyed great success on the pitch in the early years of Roman Abramovich, the reports clearly show the extent of losses suffered in recent times. With a minor profit of £1m in 2011-12, the Club showed overall losses worth £670m between 2004 to 2013. Diminishing financial records of the Club clearly signify lack of proper decisions by the team.
One of the major reasons for losses is flat turnover over the years. The match day turnover alone dropped from £71,751 in 2017-18 to £64,761 in 2018-19. Moreover, the gains made from commercial revenue, worth £158,688 in 2018-19 did not benefit due to the losses in match day receipts and broadcast revenue.
The profit earned via sale of players, worth £60.5m were only half of what the Club earned earlier in a year. One of the key strategies of Chelsea has been to sell players at a great margin. The losses incurred in this arena have therefore hampered the future business plans of the Club.
As reports suggest, Chelsea spent £6m for buying back “certain retail and licensing rights” in 2017-18. In the following year, the expense rose to £26.6m for paying coach Antonio Conte and his staff. With this, the termination costs for Roman Abramovich era amount to £90m.
The club’s amortization costs have rosen from £88.5m in 2016-17 to £167.6m in 2018-19. Over the coming years, the Club will absorb the fees paid for big players like Kepa Arrizabalaga, Christian Pulisic and Jorginho.
Under the ownership of Roman Abramovich, the Club has paid wages to its players much above the market rate. Consequently, wage costs rose from £40m to £263m last year. Moreover, the increase in non-playing staff year-to-year from 236 to 283, has been a major driver of Club losses.
Any prospects of sale have been dismissed by the accounts released, which clearly show additional funding from Abramovich. The report states, “Funding is provided by the parent company, Fordstram Limited, which is supported by the ultimate controlling party, Mr R Abramovich. The group has received an increase in funding of £247m during the last financial year [2018: an increase in funding of £69.1m]. The company is reliant on its parent undertaking, Fordstram Limited, for its continued financial support.”
Meanwhile, a great player of the team, Reece James is close to signing a new five-year deal at Stamford Bridge. Under this term, he has become the first team regular and the team has been wanting him to sign an extended term since a long time. Being the great player that he is, other teams like Manchester United and Bayern Munich showed interest in purchasing him. But Lampard has stayed true to his word and given the defender total of 17 appearances in this term till now.
With the team heading towards extended losses in the current year, Roman Abramovich will have to find some way to cut down on the exceptional costs or be ready to face heavy consequences in the football world!
Coronavirus Pandemic Raises the Demand for Ventilators Globally
As the coronavirus pandemic sweeps across the world at an alarming rate, a major need for ventilators has come up globally. Governments, health officials and ventilator manufacturers are looking to adopt desperate measures to meet the demand. According to the World Health Organisation, every sixth…
Adhering to Changing Consumer Tastes, PepsiCo Acquires Snack Brand Be & Cheery
PepsiCo Inc is all set to dig into the Chinese market with long-term plans. The US multinational beverage maker has announced plans to buy Chinese snack brand – Be & Cheery from local jujube maker Haoxiangni Health Food Co Ltd. The acquisition settled at a…