Chelsea await punishment for financial losses and could get ban if they reoffend

Chelsea are set to reach a settlement with UEFA for breaking their financial rules.

And they could even face a ban from European competition if they continue to fall foul.

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The European governing body have decided not to count the £200million income generated by selling Chelsea Women and club-owned hotels to sister companies, meaning the Blues were deemed to have breached spending limits.

Chelsea were accused on talkSPORT of ‘making a mockery’ of the Premier League’s profit and sustainability rules (PSR) and ‘finding gaps’ in the system by announcing profits of £128.4m before tax for the financial year ending June 30, 2024.

According to the club, the turnaround is due to ‘increased profit on disposal of player registrations and repositioning of Chelsea Football Club Women Ltd’.

That ‘repositioning’ was the sale of the women’s team by Chelsea Holdings to the club’s American-based owners, BlueCo.

The profits from the sale helped Chelsea move from the red into the green, having posted a loss of £90.1m the previous year.

However, the move to sell Chelsea Women to themselves is still being assessed by the top flight,but has been ignored by UEFA.

According to the Sunday Times, Chelsea and UEFA are now in talks over a settlement, likely a financial penalty, and also a spending plan the Premier League giants must stick to for the next three seasons.

It’s also reported that stiffer sanctions will be in place if the Blues breach spending rules again, including a possible exclusion from European competition, with the outcome of the settlement expected to be made public in May.

The £200m sale of Chelsea women was a world-record fee paid for a women’s football team and raised some eyebrows within the world of football finance.

The Times report Chelsea Women – which made a loss of £8.4m last season and posted a turnover of just £11.5m – should be valued at between £50m and £80m.

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The previous record deal of a women’s football team was the $250m [£194m] sale of American NWSL club Angel City – a team that boasts a number of celebrity investors and whose most recent revenue was £24m, which is more than double Chelsea’s.

Angel City was purchased by Bob Iger, CEO of the Walt Disney Company and his wife, with tennis legends Serena Williams and Billie Jean King, USA soccer legend Mia Hamm and actors Natalie Portman, Jessica Chastain, Jennifer Garner, Eva Longoria, Sophia Bush and also James Corden among their ownership group.

Together with the sale of the women’s team, Chelsea also posted £76.5m profit from the sale of two club-owned hotels to BlueCo, while they also sold Kingsmeadow – the ground where the women’s team and Under-21s play – to themselves.

However, accounts show the valuation of the hotel deal was not approved by the Premier League and Chelsea have since had to knock £6m off the fee in their books.

UEFA financial rules don’t allow clubs to declare income from selling assets to sister companies. 

It’s not outlawed in the Premier League, though. In fact, clubs voted last June against closing the loophole.

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UEFA’s rules allow clubs to to lose a maximum of €200m [£170m] over three years.

Without the sister-company deals, Chelsea have a three-year loss of £358m, although deductions can be made for spending on youth and women’s teams and on infrastructure.

Despite the apparent severity of the situation, The Times claim owners Todd Boehly and Clearlake Capital are said to be relaxed about the position and maintaining good relations with UEFA.

Ally McCoist was among those to react on talkSPORT to the news of Chelsea’s in-club deals, with the Scottish legend raising his concerns.

The talkSPORT co-host told Breakfast: “It just makes a mockery of it.

“Let’s be brutally honest about it, they’ve made a rule and clubs, particularly Chelsea, they’re not breaking it, but they’re bending it to suit themselves.

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“Which in one way, you can’t blame them for at all, as long as they’re abiding by the rules they’re entitled to do it.

“You can guarantee they’ll be exploring the avenues right now as we speak, but how do you stop it?”