Peter Kenyon, the Chelsea chief executive, yesterday signalled a summer clear-out of some big-name players as the club announced losses of £65.7m – including £23.1m paid in compensation to former managers Jose Mourinho and Avram Grant and their coaching staff.
The vast bulk of that money – around £18m – was paid to Mourinho, as first revealed by The Independent soon after his departure in September 2007 – with the rest accounted for by his four-strong coaching staff, who received less than £1m between them, plus Grant and his highly-paid assistant, Henk Ten Cate.
An end-of-season sale would involve the departure of players such as Didier Drogba, Nicolas Anelka, Florent Malouda and Deco while, with contract talks not resolved, the future of Joe Cole is also up in the air as is that of Michael Ballack, one of the three highest earners. And what would happen if Manchester City, as they have considered, tempted Chelsea with a mega-bid, £40m plus, for John Terry? It would certainly help Kenyon break even as he has pledged to do by 2010.
With a permanent manager yet to be appointed, the future make-up of the squad is uncertain – Petr Cech's loss of form is also a concern – and it will be a serious consideration for whoever does take over that he will have to generate funds rather than rely on the wealth of Roman Abramovich, unless the owner has a sudden change of heart, which is possible.
"Any squad structuring in the summer will be funded prominently by sales as we have consistently reduced our net transfer spend over the last five years and will attempt to continue this trend," Kenyon said. "We have set ourselves ambitious targets... to require zero cash funding from the owner at the beginning of the financial year 2009-10."
Given the level of losses again recorded by Chelsea, that still remains a daunting target unless there is some kind of wide-ranging sale with cheaper – in both fees and wages – replacements being brought in. Chelsea also have to factor in the compensation – of around £9m – due to Luiz Felipe Scolari and his three assistants who were sacked this week.
The figures do represent another improvement after last year's losses of £74.8m, £80.2m the previous year, and record losses of £140m in 2004-05. Chelsea's wage bill remains the biggest in the Premier League at £148.5m – or 70.6 per cent of their turnover which is way above the level regarded as good practice. Manchester United by contrast, spent £106m on wages in 2006-07 or 43.6 per cent of turnover.
Abramovich has also reduced the debt the club owe to him personally by half, turning £369.9m of his loans into shares. It still means however that Chelsea owe him £339.8m as an interest-free loan while the figures reveal he, as sole owner, has now ploughed a staggering £709.7m into the club.
Chelsea hope that the move will draw the sting from criticism of their reliance on Abramovich, and also show his commitment to Chelsea. There may be further motivation, however, given Abramovich's exposure to the global financial crisis and also the criticism Chelsea have faced in the last year from the Uefa president, Michel Platini, and the Football Association chairman, Lord Triesman, over its so-called debt levels.
Turnover was up 12 per cent to £213.1m thanks largely to the increased value of the Premier League's television deal and the run to the Champions League final. Gross turnover, including sales of merchandise, was £248m. With Stamford Bridge pretty much a sell-out and commercial deals for the next year already signed, it will become harder to secure significant turnover increases in 2008-09.
With Guus Hiddink now in place, at least until the end of the season, Chelsea hope to end the divisions within the squad which grew under Scolari. Ray Wilkins, the assistant manager who is in charge for today's FA Cup tie away to Watford, and who hopes to remain under Hiddink, said the players had to take "responsibility" for poor performances.
Wilkins blamed a lack of communication and told the dressing-room to re-find the spirit that saw them win league titles under Mourinho. "We have to get the unity back and we have to perform," Wilkins said. "It is not all doom and gloom. We are talented, extremely talented, but we have to start enjoying what we are doing.
"I think some of the players carry a torch for Jose. We have all had favourite coaches and he might be the favourite coach of some of our guys. But they have just got to get on with their job. It doesn't matter who coaches or in what method they coach."
Burnt bridges Three to go?
1. Didier Drogba
Has not been the same since Jose Mourinho left in September 2007. Seemed set on a move to Italy last summer and has performed fitfully after his hopes of Serie A were dashed, culminating in a wretched display in the 3-0 defeat at Manchester United last month.
2. Nicolas Anelka
Avram Grant's only signing, Chelsea will expect to recoup the £15m they spent on the French striker last year. Has scored regularly but, as with many of the clubs he has played for, has rarely appeared settled.
3. Florent Malouda
One of Mourinho's rare transfer clangers, the £13.5m winger has wilted during his two years in the Premier League. Chelsea will have to cut their losses.
Bridge of sighs: Blues' losses
Chelsea losses since Abramovich bought the club in July 2003: