Chelsea have tested the limits of the Premier League’s Profit and Sustainability Rules (PSR) since the takeover led by Todd Boehly and Behdad Eghbali in May 2022.
In that period, both Everton and Nottingham Forest have had points deducted for PSR breaches, while Leicester City escaped reprisal on what experts agreed was a technicality.
The Premier League is not a toothless tiger and will enforce the regulations that insists are necessary to ensure competitive balance and financial stability.
That is especially the case as the league is desperate to prove to the government that is can self-govern, with spectre of a Labour-backed independent football regulator now looming large over Stamford Bridge.
With financial losses in excess of £200m in the last two financial years and a deficit of close to £100m projected for 2023-24, the Blues are – on the surface – well over the £105m, three-year PSR loss limit.
However, a series of accounting sleights of hand have seen Chelsea swerve punishment for the £1.5bn they have spent so far under Boehly and Eghbali‘s Clearlake Capital.
The sale of two hotels at Stamford Bridge to another BlueCo-owned company added £76m to the profit-and-loss account, while the similar transfer of the women’s team could be worth twice that.
But even with those makeweights taken into account, Chelsea are playing a dangerous game – and they know it, despite their bullish insistence that they have ample PSR headroom this season.
And events elsewhere in the football ecosystem mean that the stakes could be even higher than the current analysis suggests.
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FIFA’s prize money promises
One potential source of income for Chelsea is the Club World Cup, which is scheduled between June and July in the United States next year.
The tournament – which Chelsea have won once, in 2021 – will feature 32 teams this time and will from now on be staged once every four years.
However, FIFA is struggling to attract a TV deal for the controversial expanded edition of the tournament despite the fact that it had previously hope to secure a £4bn broadcast package.
With Chelsea initially told by Gianni Infantino and his peers in the FIFA boardroom that the Club World Cup could deliver prize money of £80m, it now looks as though £30m might be more likely.
That is still not exactly spare change, but it does mean Chelsea may have to recalibrate given that their spending so far has presumably been sanctioned on the basis of higher revenue projections.
And in another blow for FIFA and Chelsea, FIFPro and the European Leagues have now filed a joint legal complaint against FIFA relating to fixture congestion and risks to player welfare.
The statement from the two powerful organisations specifically references the Club World Cup, as well as the international match calendar.
The Nike problem
As Chelsea supporters will be aware, the club are yet to agree a front-of-shirt sponsorship deal for 2024-24.
It is the second season running they have failed to do so in time for the start of the campaign, a state of affairs that most experts agree is unacceptable.
Last term, Infinite Athlete – a company who the Premier League classed as an ‘associated party’ due to its hazy links to Todd Boehly – stepped in with a one-year, £40m deal.
Recent reports suggest that Chelsea were looking for £60m for their front-of-shirt rights but, with two months of the season having elapsed, their value is sinking like a stone.
It is believed that Chelsea would now accept £30m.
Nike are also said to be displeased with the situation, arguing that it has damaged shirt sales.
And with Chelsea still reportedly hoping to agree what would be a hugely lucrative tie-in with Nike’s Air Jordan brand, that is a concern.
UEFA’s PSR system for 2024-25 limits Chelsea’s spending on wages, transfers and agent fees to 80 per cent of their annual turnover.
Given that the hotel and women’s team sales are not recognised by UEFA for PSR purposes, the chances of complying with PSR under European football’s governing body’s standards are very remote.
Chelsea have more hope with the Premier League’s separate system, but the dwindling of the cash promised by FIFA for the Club World Cup and lost commercial income mean they are on a sticky wicket.
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