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Woke up this morning to read this:

http://www.dailymail.co.uk/sport/football/article-1341591/Chelsea-crisis-new-40million-loss-Abramovich-continues-funding-freeze.html

Chelsea in crisis after new £40million loss as Abramovich continues funding freeze

Carlo Ancelotti, without a win in five Premier League matches, will not be allowed to bolster Chelsea's faltering title hopes by adding to his squad in the January transfer window.

Chelsea will announce in the new year that the club lost £40million last season despite winning the League and FA Cup Double.

Only if owner Roman Abramovich has a major change of heart and subsidises a new signing will Ancelotti be able to bring in new blood next month. And the Italian has been told that such an about-turn is not on the agenda.

The lack of funds will further frustrate a manager who is expected by Abramovich to improve on last season's performance, despite having to operate with a squad that captain John Terry admits is weaker than the one that completed the Double.

Ancelotti, who has insisted that despite recent injuries he cannot blood his youngsters at such a time of crisis, now faces Arsenal in a vital match tomorrow knowing that his principal rivals for the titles - Manchester United, Manchester City and Arsenal - have significant funds to strengthen in January.

City will make a further move for £35m Wolfsburg striker Edin Dzeko, while United are monitoring Liverpool's £20m goalkeeper, Pepe Reina, and Atletico Madrid's £15m David de Gea, as Arsenal contemplate a £10m move for Bolton centre-half Gary Cahill.

But potential Chelsea moves for a new striker, such as City's unsettled Carlos Tevez or Liverpool's Fernando Torres - either of whom would cost £40m - or for Benfica centre-half David Luiz, who is valued at £25m, are seemingly impossible.

Despite enjoying an historic season in 2009/10, Chelsea's financial figures are unlikely to see a significant change from the previous year's loss of £44.4m, taking the total amount of losses since Abramovich took over seven years ago to more than £500m.

The Russian has committed to reducing the club's annual deficits ever since announcing a record loss for a football club of £140.2m in 2005.

Chief executive Ron Gourlay has already told players, in a team meeting at the start of the season, not to expect major signings, as the club are now expected to generate their own transfer funds through sales rather than rely on hand-outs from Abramovich.

Gourlay has been instituting a number of economies this season, which included refusing to renew the contracts of Joe Cole and Michael Ballack and cutting the win bonuses of some players.

Chelsea need to show UEFA they are making progress in reducing their losses from next season. Europe's ruling body will monitor club accounts as part of new financial fair play regulations.

Any club making persistent losses, such as Chelsea and Manchester City have done, will be banned from the Champions League from 2013.

Chelsea are confident recent cutbacks and improved sponsorship deals negotiated by Gourlay, including an eight-year kit deal with adidas worth potentially £30m a year, mean the deficit will be considerably reduced by the time the new regulations come in.

The rules will permit clubs to incur exceptional losses of around £38.5m in the two years running up to the 2013/14 season, if they are underwritten by shareholders and owners. The measures Chelsea have taken mean they should meet those criteria.

But to do so would mean continuing to run a steady financial ship until the club can significantly increase their income.

Of course it's the Daily Fail so it might be complete rubbish, but do you think there's any truth in it?

Honestly, I thought we were doing quite well financially. Not making loads of money perhaps, but atleast not losing alot every season.

If it's true we're losing money each season then what is wrong with the club? We usually go far in the CL, we won the double last season and certainly don't have a huge and expensive squad. We don't even spend loads of money on players anymore.

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the reason we make losses is mainly down to our wage bill...can't be transfers anymore...we don't make any!

I didn't think we had such high wages but apparently we spend more than any team. £167m :shok:

Not sure if the wages of Ballack, Joey, Deco and the rest we let go are excluded.

And I'm shocked that ManC - who seem to give all new players ridiculously high wages - only have £83m (though I think those numbers came before this seasons signings).

If all those numbers are correct then the board at Chelsea really have to make some changes because £167m is way too much.

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It's the Mail. It's written by Rob Draper, and Rob Draper is a prize prick of the highest order. Love this comment though:

Jamie from Maidenhead, replying to some no-nothing muppet wrote:

Since 1945, when football resumed after WW2, do you know which four teams have finished in the top 6 the most times? Manchester United Liverpool Arsenal and... Chelsea. Not Tottenham, not Aston Villa, not Everton, not Manchester City, not Newcastle, not West Ham, not Leeds - Chelsea. And that's since 1945, not since 'Abro' (as you call him) came in. Tony in Herts knows nothing about football, that's his downfall.

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This should really go under rumours. It is the Daily Heil after all and so far nothing has been confirmed by the club. It certainly makes sense that we would not spend big money on players if we are 40 million in debt. We have to start coming in line with UEFA regulations by 2013. However the losses sound highly unlikely given that we haven't spent money on big signings and have trimmed the wage bill. Lets wait and see the official club statement.

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This should really go under rumours. It is the Daily Heil after all and so far nothing has been confirmed by the club. It certainly makes sense that we would not spend big money on players if we are 40 million in debt. We have to start coming in line with UEFA regulations by 2013. However the losses sound highly unlikely given that we haven't spent money on big signings and have trimmed the wage bill. Lets wait and see the official club statement.

The losses -if true - will be for the last financial year, so before we took Ballack, Deco, RC, JC and Belletti off the wage bill (and before we sold Stoch and bought Ramires), so we have already made progress in cutting the losses for the current financial year. Things aren't great but they're not as bleak as the Heil would have you believe. And RA will invest in the side, as neglecting the playing staff would put CL qualification - and major sources of income (TV, gates, sponsorship, merchandise - at risk.

Edited by Backbiter
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I too assumed those numbers were for last year. But clearly, this is the main problem

I didn't think we had such high wages but apparently we spend more than any team. £167m :shok:

If that is the wage bill last year, okay. But that is still FAR FAR too high. Clearly the club didnt see financial regulation happening a few years ago. Still, I struggle to get my head around the numbers. Ballack, Joe and Deco were expensive players, but I doubt they ate up that much of the bill.

If 167m is the wage bill this year, it would be shocking. 17 senior players should never add up to that much, and if its right they would obviously be on about 10m pounds each. Which would be around 192k pounds a week. Thats Tevez/Rooney money. I doubt even JT earns that much, and he put the club's balls in a vise grip a couple of years ago.

I know I may be ripped for saying so, but there needs to be a hard wage cap system like at Arsenal. If we lose a few to Barca, Madrid or City, so be it, but once you get one person elevating a wage into the stratosphere, the rest will surely follow.

I am obviously not some financial whiz, but I would love to see the numbers, and what is spent on what, in front of me. While I know we have a very experienced core of players who have guided us to success, it bothers me that to get them and keep them, we had to spend much more than would the likes of Arsenal and Man Utd. This club promises a chance to win trophies in one of the greatest leagues and cities on earth. You'd think that would be enough to overcome the fact that the club isnt as famous worldwide as some of its rivals.

I really wonder how some of the people at the club run things. We have seen the PR disasters, heard about the agents fees and hangers on like Zhavi. After all the success, new commercial deals, income generated, if we are in the same financial boat in 3 years, heads should be rolling in the club's front office.

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I will add to that, the effects of high wages are clearly the cramp on the recent spending. I have recently advocated adding to the squad by 1 or 2 players, or 3 if i can dream, to give us more depth. Well, if those signings all have to be handed an 100k a week pay packet, then forget about it.

Even 50k for someone like Benayoun is probably too much. But its clearly par for the course with players these days. Just to put it in perspective, if all the non-academy players + Studge were on the same wage as Yossi, the club's bill would be less than 47m before win bonuses and ancillary fees. That is 120 MILLION less than the figure quoted.

Again the Heil claiming to know what Abramovich is thinking, what is being said in the backrooms, and who all of our transfer targets are? Torres, Tevez, really???

Right, its comical. To add to the fact that we havent made a big splash of a signing since 2006. Since that time City, Arsenal, Liverscum, Scum Utd, and Tottenham have all bought players with higher profiles than our transfer targets

Edited by TheWestwayWonder
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Well, some of the details are probably wrong, but the 40m loss thing is too widely circulated and repeated by reputable financial sources. I have seen it too, albeit in disbelief because I believe we made a profit the year before. Either that, or the loss had shrank to almost nothing, and a profitable year this year looked inevitable.

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This would actually mean an increase in the wages, as if I recall correctly last season the wages were around 140m. This would also mean bigger losses as in 2009 the losses were 44m including a 12m compensation to big fail and his backroom team.

Adding the fact that the financial report for 2010 is not even out yet this seems to be massive speculation... The main figures will be on the OS by the end of the week probably (it was released on dec 30 last year) so we will know more in a couple of days.

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I didn't think we had such high wages but apparently we spend more than any team. £167m :shok:

Not sure if the wages of Ballack, Joey, Deco and the rest we let go are excluded.

And I'm shocked that ManC - who seem to give all new players ridiculously high wages - only have £83m (though I think those numbers came before this seasons signings).

If all those numbers are correct then the board at Chelsea really have to make some changes because £167m is way too much.

Where are you getting these figures from?

From Money & Finance : F.C. Business

According to their latest accounts, Chelsea's wage bill in the last financial year was £142.6 million

I can't actually find the article, just the google link. This may be because you need to register, but either way, I'm unsure whether that figure is for players only or whether it also includes management and coaching staff.

However, I'm assuming this is for last year, and if you deduct the wages saved from the players released at the end of last season, then you can deduct a further £20 million (roughly), which takes it down to somewhere around £125 million. I've heard suggestions that Arneson won't be replaced, so if the figure is for total wages, that's a few million less again.

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Backbiter's got it right, the accounts are for financial year 2009-10. It is the reports for next season that are the ones that will really make a difference. Which is why I'm still doubtful that we'll buy anyone, because chucking 20mil in the expenses column, can't be good for that result, and right now that appears to be our main priority.

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Where are you getting these figures from?

I found them on a few places.

http://www.bbc.co.uk/news/10249101

http://www.caughtoffside.com/2010/06/08/the-premier-league-wage-table-11-annual-increase-represents-very-real-problem/

I also found this which is a much more recent article:

http://www.theaustralian.com.au/news/sport/chelseas-bid-to-balance-the-books-delayed-by-soaring-wages/story-e6frg7mf-1225971337555

"The club's transfer spending has been modest for several years, the £18million signing of Yuri Zhirkov from CSKA Moscow being the only noteworthy outlay, but it has been unable to exert any significant downward pressure on wages. The new contracts awarded to John Terry and Didier Drogba last summer have sent the wage bill soaring past last year's figure of £167million, which was a Premier League record."

Found this as well:

"Considering it was always Abramovich’s aim for Chelsea to break even by 2010, the lack of forward planning is staggering. Although the precise figure has not yet been released, Chelsea’s wage bill for the last financial year was more than £150 million. United’s was a not inconsiderable £123 million, but the champions’ turnover was £72 million higher than Chelsea’s. In terms of wages as a percentage of turnover, Chelsea spent at least 70 per cent. The equivalent figures at United and Arsenal are 44 per cent and 33 per cent respectively."

Now that last quote comes from caughtoffside.com and I don't know how reliable they are, but if those numbers are true then it's really scary.

Also found an old chart on staff wages and in the top 10 we had people on places 1-6.

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I found them on a few places.

http://www.bbc.co.uk/news/10249101

http://www.caughtoffside.com/2010/06/08/the-premier-league-wage-table-11-annual-increase-represents-very-real-problem/

I also found this which is a much more recent article:

http://www.theaustralian.com.au/news/sport/chelseas-bid-to-balance-the-books-delayed-by-soaring-wages/story-e6frg7mf-1225971337555

"The club's transfer spending has been modest for several years, the £18million signing of Yuri Zhirkov from CSKA Moscow being the only noteworthy outlay, but it has been unable to exert any significant downward pressure on wages. The new contracts awarded to John Terry and Didier Drogba last summer have sent the wage bill soaring past last year's figure of £167million, which was a Premier League record."

Found this as well:

"Considering it was always Abramovich’s aim for Chelsea to break even by 2010, the lack of forward planning is staggering. Although the precise figure has not yet been released, Chelsea’s wage bill for the last financial year was more than £150 million. United’s was a not inconsiderable £123 million, but the champions’ turnover was £72 million higher than Chelsea’s. In terms of wages as a percentage of turnover, Chelsea spent at least 70 per cent. The equivalent figures at United and Arsenal are 44 per cent and 33 per cent respectively."

Now that last quote comes from caughtoffside.com and I don't know how reliable they are, but if those numbers are true then it's really scary.

Also found an old chart on staff wages and in the top 10 we had people on places 1-6.

Did they refer to united as "the champions"? :rolleyes:

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The BBC article is from June of this year, so refers to last year's figures. Since that, Man City's wage bill will have rocketed and ours will have been substantially reduced following the release of Ballack, Carvalho, Deco, Joe Cole and Belletti.

Going back to the australian.com article (sourced from The Times):

Chelsea are confident that this year's results will mark the end of a sustained period of heavy losses, however, and predicts that a combination of increasing commercial revenues and cutbacks will bring it close to breaking even next year.

Ron Gourlay, the chief executive, recently signed a £160million, eight-year shirt sponsorship deal with adidas that will be included in next year's accounts and an £8million sponsorship with Singha, the Thai beer company, which doubled the previous deal with Heineken.

Negotiations are continuing to sell the Stamford Bridge naming rights, which they hope will raise £100million over 10 years. Chelsea has made progress towards getting its wage bill on to a more sustainable footing that will not be reflected in this year's figures, the decisions to release Joe Cole, Michael Ballack, Deco and Juliano Belletti last summer saving £20 million a year.

So we've saved on wages and have an increased income (Adidas, Heineken, naming rights) to look forward to. Suddenly the financial future looks a lot brighter, wouldn't you say?

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With the new rule coming into all place it has to affect the players wage demands wherever they go man city won't able to compete in the champions league, only the teams in the top 5 turnover will be able to offer big contacts. so after a decade of astronomcal transfers and wages it will be reduced somewhat. My worry is that we will struggle to attract top players because of the new wage structure. esecially with our tax laws. I wonder how this will effect real Madrid?

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The new rule is skewed towards the teams with big stadiums as they have more ability to raise revenue. I think something had to be done to prevent more clubs overspending and going bankrupt like Pompey. But this rule seems like it was put together by the old boys network. It will favour the teams that are already well established in Europe since they don't need to go to as great lengths to bring in more revenue. Smaller clubs cannot hope to make it into the Champions League now unless they happen to put together a fantastic squad of no-namers. Even if that happens those players will quickly get snapped up the by the big teams who can offer the bigger wages. In my opinion the only way to truly level the playing ground is to have a Europe wide salary cap to force all teams to consider their wages. That will never happen though.

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Carlo pretty much confirms that we won't be buying unless Alex doesn't recover.

http://www.skysports.com/story/0,19528,11661_6617821,00.html

Assuming that this is related to the cost cutting measures I would also suggest it offers a better chance of Carlo staying put longer term. If the club is trying to balance the books the last thing they will want is another expensive golden handshake on the line items.

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