Chelsea Fucked?
- Thread starter Mystic
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They just murdered one person. No biggie.
I think they're fucked. Last year they needed a £96m increase in the loan from Abramovich to prop up their losses. I don't see any reason why it would be any different this year.
I'm not convinced that their money earned will be enough to pay even their operating expenses, based on the level of losses they've incurred in recent years.
This summer they'll have chunky payments to make on the transfer deals for Lukaku and Havertz/Chilwell/Ziyech/Werner (possibly, if it wasn't paid in one go), although they'll be covered for Lukaku by incomings from sales of Abraham / Catboy etc.
If they default on transfer instalments, will the clubs who haven't been paid sit tight or will they call on UEFA to exclude Chelsea from future competition? I know what I'd do in their place. Best case is UEFA / PL pays those clubs and then withholds media money from Chelsea (which just fucks them further down the line).
The other issue is timing of cash coming in. From memory, the PL usually puts a chunk of media cash in around January time and then nothing until the end of the season. The way Chelsea's banking seems to work, everything is swept up into group funds so unless Abramovich had the foresight to dump a load of cash in the club ahead of time then they probably don't have the money to pay their normal costs (the media money will have been swept into central funds) and it doesn't look to me like they had their own bank borrowing facility at the end of 2021.
QUESTIONS:
Would RA dump a load of cash into something he was going to have taken off him anyway, just to save face (and weaken the club's negotiating stance for relaxation of restrictions)? Maybe not.
Will banks be falling over backwards to lend chunks of money to a loss-making, sanctioned business running under a restrictive licence under threat of expulsion from European and domestic competition and still owned by a sanctioned Russian oligarch? I doubt it.
So unless this ends pretty quickly (unlikely) or the government permit a sale (possible) they are fucked. That's without taking into account the fact that they'll lose three first team centre halves next season if this isn't resolved before then, and be left with a 90-year-old Silva with a couple of kids or full-backs to help him.
They'll be begging the PL for an advance of media money right now and they'll be praying sponsors don't pull out (which many of them will).
Conclusion - they're fucked.
I'm not convinced that their money earned will be enough to pay even their operating expenses, based on the level of losses they've incurred in recent years.
This summer they'll have chunky payments to make on the transfer deals for Lukaku and Havertz/Chilwell/Ziyech/Werner (possibly, if it wasn't paid in one go), although they'll be covered for Lukaku by incomings from sales of Abraham / Catboy etc.
If they default on transfer instalments, will the clubs who haven't been paid sit tight or will they call on UEFA to exclude Chelsea from future competition? I know what I'd do in their place. Best case is UEFA / PL pays those clubs and then withholds media money from Chelsea (which just fucks them further down the line).
The other issue is timing of cash coming in. From memory, the PL usually puts a chunk of media cash in around January time and then nothing until the end of the season. The way Chelsea's banking seems to work, everything is swept up into group funds so unless Abramovich had the foresight to dump a load of cash in the club ahead of time then they probably don't have the money to pay their normal costs (the media money will have been swept into central funds) and it doesn't look to me like they had their own bank borrowing facility at the end of 2021.
QUESTIONS:
Would RA dump a load of cash into something he was going to have taken off him anyway, just to save face (and weaken the club's negotiating stance for relaxation of restrictions)? Maybe not.
Will banks be falling over backwards to lend chunks of money to a loss-making, sanctioned business running under a restrictive licence under threat of expulsion from European and domestic competition and still owned by a sanctioned Russian oligarch? I doubt it.
So unless this ends pretty quickly (unlikely) or the government permit a sale (possible) they are fucked. That's without taking into account the fact that they'll lose three first team centre halves next season if this isn't resolved before then, and be left with a 90-year-old Silva with a couple of kids or full-backs to help him.
They'll be begging the PL for an advance of media money right now and they'll be praying sponsors don't pull out (which many of them will).
Conclusion - they're fucked.
Reviewing
The sale has also been halted...
Disagree with that, because the money from the sale of Chelsea was to go to help the Ukraine. The Government wanted Russian oligarchs to speak out against Putin and by giving the money from the sale of Chelsea FC that is like Roman slapping Putin in the face. Instead you have the Tories doing the work for the Kremlin and Putin by stopping that money reaching the Ukraine...
Nice one Boris... Abramovich act of selling Chelsea and giving the money to the Ukraine may have convinced the people of Russia that Putin was lying to them and some of the other oligarchs to rid themselves and the country of Vladimir Putin.
Instead you will have the Kremlin spinning this as yet another western lie, and spoon feeding it to the people
Disagree with that, because the money from the sale of Chelsea was to go to help the Ukraine. The Government wanted Russian oligarchs to speak out against Putin and by giving the money from the sale of Chelsea FC that is like Roman slapping Putin in the face. Instead you have the Tories doing the work for the Kremlin and Putin by stopping that money reaching the Ukraine...
Nice one Boris... Abramovich act of selling Chelsea and giving the money to the Ukraine may have convinced the people of Russia that Putin was lying to them and some of the other oligarchs to rid themselves and the country of Vladimir Putin.
Instead you will have the Kremlin spinning this as yet another western lie, and spoon feeding it to the people
Wow I didn't know this. I always thought that they had become self sufficient after a decade of doping
Chelsea statement:
By virtue of his 100 per cent ownership of Chelsea FC plc and affiliated entities, Chelsea FC would normally be subject to the same sanctions regime as Mr Abramovich. However, the UK Government has issued a general licence that permits Chelsea FC to continue certain activities.
We will fulfil our men’s and women’s team fixtures today against Norwich and West Ham, respectively, and intend to engage in discussions with the UK Government regarding the scope of the licence. This will include seeking permission for the licence to be amended in order to allow the Club to operate as normal as possible. We will also be seeking guidance from the UK Government on the impact of these measures on the Chelsea Foundation and its important work in our communities.
The Club will update further when it is appropriate to do so.
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Key point for me is that they obviously feel they need to broaden the licence and they also only commit to the next fixtures for both men’s and women’s teams, nothing beyond that. Maybe it’s my personal bias against them but it’s not a very positive statement IMHO.
Also, pedant point, “normally”, not “normal”. Very poor from the PR department.
By virtue of his 100 per cent ownership of Chelsea FC plc and affiliated entities, Chelsea FC would normally be subject to the same sanctions regime as Mr Abramovich. However, the UK Government has issued a general licence that permits Chelsea FC to continue certain activities.
We will fulfil our men’s and women’s team fixtures today against Norwich and West Ham, respectively, and intend to engage in discussions with the UK Government regarding the scope of the licence. This will include seeking permission for the licence to be amended in order to allow the Club to operate as normal as possible. We will also be seeking guidance from the UK Government on the impact of these measures on the Chelsea Foundation and its important work in our communities.
The Club will update further when it is appropriate to do so.
————-
Key point for me is that they obviously feel they need to broaden the licence and they also only commit to the next fixtures for both men’s and women’s teams, nothing beyond that. Maybe it’s my personal bias against them but it’s not a very positive statement IMHO.
Also, pedant point, “normally”, not “normal”. Very poor from the PR department.
It’s the whole profit v cash thing.Profit on sale of Hazard has helped them through FFP the last few years but they’re still spending beyond their means.
That would be utopia.
If they do go bust, do you think they'll get kicked out and come back a la Rangers after a few years in the lower divisions or just get re-parachuted back into the premier league? If I remember correctly Rangers should have started off in the non-league first as they were technically a new club and didn't have two years worth of accounting to show before being admitted to the league. I don't know if the same applies in England.
I'm not sure how I feel about this, I'm all for sanctioning Abramovich, but this isn't going to destroy the institution that is Chelsea Football Club, and it can't be a good thing for English football as a whole. Surely there's a way to prevent Abramovich taking any wealth from the club without effectively choking it to death?
Not sure if serious.
I think they’d come back out of administration with a points penalty and carry on as before, weakened a little financially and just playing to stay in the PL for the first season as Europe would be too much to ask. Don’t see the PL kicking them out on financial grounds, no precedent for it.
I doubt they will go bust. My guess is that the government will allow the club to be sold if there is a credible buyer.
I would guess (hope) though that they probably won’t have a new owner who throws as much cash in as Abramovich has, so either way they won’t be as strong.
I would guess (hope) though that they probably won’t have a new owner who throws as much cash in as Abramovich has, so either way they won’t be as strong.
How can they allow it to be sold though, the asset is frozen, if it's sold the money has to go Abramovich which defeats the point surely?
Surely the simplest solution is for a creditor or one of the directors to apply for the Club to be placed under judicial management. The club could continue either be sold or continue operating, spending only the income it generates, with no part of the proceeds going to Roman. If the club is sold, the proceeds can be held in escrow until the sanctions are lifted or there is an order for his assets to be seized (unlikely).
Subject to what Beamrider says about its finances, I think an argument can be made that Chelsea Football Club is a profitable concern in the mid to long term, so it is in the creditors' interest to preserve the value of the asset.
Subject to what Beamrider says about its finances, I think an argument can be made that Chelsea Football Club is a profitable concern in the mid to long term, so it is in the creditors' interest to preserve the value of the asset.
Having one of the countries biggest clubs thrown into bankruptcy isn't good for anyone, despite how much fun it'll be to laugh at.
The government can still allow it to be sold. He won't be allowed to have the money though. Whether that only means any potential profit from the sale, I am not sure, but presumably any money he gets from the sale would also be immediately frozen too.
It might stop rogue regimes coming in and buying clubs as play things.
It won’t, unfortunately. Only the government can do that but it rather likes the colour of tainted money.
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