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European champions Chelsea slump to £156m loss despite surging broadcast revenue

European champions Chelsea have reported a massive loss for the covid-impacted 2020-21 season. The West London side posted pre-tax losses of £155.9 million, compared with a £35.7 million profit the previous year, when figures were buoyed by the sale of Eden Hazard to Real Madrid.

Surging broadcasting income enabled turnover to rise from £407.4 million to £434.9 million, still lower than two seasons earlier, before covid hit. But this was nowhere near sufficient to cover ordinary operating expenses of £588.3 million.

Increasing wage costs, as a cluster of new players were brought into the club, was the main explanation for the jump in expenses. Employee remuneration pushed well beyond the £300 million-mark to £332.9 million.

The new figures also included just under £42 million of “exceptional administrative expenses”. A terse Note explained that these costs consisted of £17.9 million in player registration impairments and £24.1 million of “amounts payable in relation to ongoing legal matters”.

The club, which replaced Frank Lampard as head coach with ex-Paris Saint-Germain boss Thomas Tuchel last January, reported a near £28 million profit on player sales. With the likes of Kai Havertz, Ben Chilwell and goalkeeper Edouard Mendy being brought in, however, the impact of transfers on cash flow appears to have been rather different. The cash flow statement reveals a well over £80 million deficit between intangible assets (ie players) purchased – £205.9 million – and those sold – £119.7 million.

The turnover breakdown disclosed an impressive leap in broadcasting revenue – up from £182.5 million to £273.6 million. This more than compensated for the collapse in matchday income, which slumped from £54.5 million to just £7.65 million because of the number of games played behind closed doors. Commercial revenue held up reasonably given the difficult circumstances, sliding from £170.4 million to £153.6 million.

After repaying funding to Russian owner Roman Abramovich in 2019-20, the new accounts stated that the club had received an increase in funding of £19.9 million during the latest year.

The going concern statement makes clear that the company is “reliant” on Abramovich-supported Fordstam Limited for “its continued financial support”, while underlining that it had received confirmation that sufficient funds would be “provided to finance the business for the foreseeable future”. Inside Football World

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