Chelsea’s absurd finances are a mess of the Premier League’s making

After Chelsea’s latest financial figures sparked controversy, Miguel Delaney discusses how this has happened in the race to beat the Premier League’s Profit and Sustainability Rules

Even by football’s standards, there was considerable shock. WhatsApps immediately went around executives at the news that Chelsea look to have avoided breaching the Premier League’s Profit and Sustainability Rules last season by selling their women’s team and other subsidiaries to the club’s parent company.

The Blues announced a £128.4m profit in their financial results for the year ending June 2024, up from an announced pre-tax losses of £90.1m in the first full year under Todd Boehly's Clearlake Capital consortium, with fans increasingly disgruntled with the ownership.

All of the jokes about what they could next sell to themselves don't seem like jokes anymore. A hotel is one thing. But an actual football team? This is what a club is supposed to be about. It’s the entire raison d’etre.

A move like this seems to sum up the almost Kafkaesque financial world that football has got itself into. Some figures even compared it to Serie A of the mid-2000s, but this is an evolution all of the Premier League’s own, adding to a number of problems.

It’s also why the shock should only go so far. The Premier League attempted to close this loophole in June of last year, but only 11 clubs backed that. That was well short of the two-thirds majority required, which of course means almost half the competition at that point had no issue with the idea that clubs could use one-off payments from the sale of hotels, training grounds and other tangible assets in financial regulation submissions. The voting on that is also described as not having gone in the way many might have expected, with some surprises on either side.

Such absurd headlines come at an especially untimely moment for the Premier League, given that it has constantly argued against the independent football regulator. This entire story would appear to show one of the core problems with self-regulation, and allowing clubs to make their own rules. The irony is of course that the regulator would not look at such issues, but that will be the call any time they come up. It is why there is a view in the Premier League this will eventually lead to “mission creep”. Others in football would respond that it’s precisely why the elite competition needs to sharpen up on this.

The English Football League stopped its clubs from using “artificial windfall profits” on such sales in 2021, after six clubs sold their stadiums or training grounds to themselves to come within permitted losses. Uefa do not allow clubs to register income from selling assets to sister companies either.

As one executive put it to the Independent, “even Uefa get this one right”.

Todd Boehly’s Clearlake Capital consortium has reported a profit thanks to the ‘repositioning’ of their women’s team (PA Wire)

That timing is all the worse for the Premier League given they have faced increased scrutiny over regulatory issues in the last 18 months, and the Manchester City case still continues without resolution. The English champions insist upon their innocence.

Some within the Premier League were known to be deeply frustrated with this news, having tried to see whether it was feasible to bring in the rule again at the start of this season.

Good regulation, put bluntly, doesn’t produce such absurdities. Matters like this are too complex and big for clubs to vote on themselves, with too many potential wider effects and implications, since they will always vote in their own interest.

Figures in European football have started to wonder whether these are the kind of forces that eventually cause the Premier League’s decline. The view is that it long worked when there was a general unity of purpose. Now, there looks to be too many competing interests among the ownerships, illustrated by how they are having difficulty in getting certain votes through.

The Premier League is still waiting to get the squad-cost ratio through, after months of back and forth.

Chelsea are in the semi-finals of the Women’s Champions League (Getty Images)

The wonder is also how this move will be looked upon. Chelsea transferred the ownership of the women’s team to Blueco 22 Midco Ltd on 28 June, two days before the 30 June deadline for finances to be registered. Within the club, the line was that this was just about repositioning this side as separate to the men’s, given their burgeoning popularity. There was an insistence it was not about exploiting the loophole.

The valuation of Chelsea Women at more than £150m makes them the second most valuable in the world behind Angel City in the USA. There has been surprise expressed at this, too, given how much more commercially successful women's football is in the United States.

The entire issue may still bring a breach of Uefa’s rules. If so, the story will somehow look even more absurd.