richard

Chelsea Finances Thread

1,878 posts in this topic

It is an interesting point and one in which Liverlad, in an earlier thread, asked what seemed to be a very simple question.

The concensus of opinion in the thread seemed to be that we're not ruining football, in fact we're improving the game by spending big money on players. The money is spread around for other teams to buy other big named players.

However on closer examination, the question posed by Liverlad is far more complex than we think and requires more research to be better informed of the financial future of football as a whole.

The question shouldn't polarise around CFC and RA having lots of money to spend. It should address ALL big spenders in the Premiership who have the monopoly on TV rights etc. and who are businesses floated on the stock market. Above all, the question also raises points around our footballing roots, culture AND our cousins in the lower divisions, struggling for survival.

As we look at this part of the question, do we give a stuff about them and, if we do, is there a way richer clubs can help? After all, we've spent time in the lower divisions too.

So here's another question; is the answer a moral one or is it one of survival of the richest or the greediest? (Whichever way you want to look at it).

Of course it isn't just about the lower divisions being in trouble.

Another facet to the question is this; If we have too few teams able to compete against the richest clubs in the Premiership, will we see, in the not too distant future, the formation of an elite Euro league? If that happens, what will become of English football?

We then come back to the original and very justifiable question, Are we (all the rich clubs) ruining football?

There are sites that provide information about the financial future of football. Every fan should be aware that as much as CFC is on a financial high, the burden of debt in football in England & Scotland is enourmous.

Here are some sites to get you going if you're interested.

There is an excellent paper addressing these issues on the Independent Manchester United Supporters Association website: http://www.imusa.org/campaigns/ownership/o...nership06.shtml

Other sites:

http://www.accountancyage.com/Specials/1134436

http://www.bized.ac.uk/stafsup/options/arg...ument/arg10.htm

http://news.bbc.co.uk/1/hi/uk_politics/2940593.stm

http://www.pkf.co.uk/download/footballsurvey.pdf

Or just put 'Financial future of football' in your search engine and away you go.

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I wonder if the like of West Ham, Blackburn and Southampton are complaining about RA's money ruining the game. With the money recieved from players like Cole and Johnson, Duff and Bridge, players such as Jonathan Stead have been bought from lower league clubs, and the money will continue to filter through the football pyramid.

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I believe if there was any danger of weakening the Premiership by having too big a gap between the 'rich' and 'poor' clubs, then something would be done about it.

Look at Formula One motor racing. It's getting boring because one or two teams who have the most resources win nearly all the races making the outcome too predictable. Result? The ruling body of motor racing are bringing in rules that make it easier for the 'poorer' teams to compete with the 'rich' teams.

On the whole subject of money in sport, it's a bit of a double-edged sword. There's no doubt that it has brought many advantages (safer stadia may have been quickly taken for granted except for the people who were at Hillsborough or Bradford). We have also seen a great 'mixing' of football cultures as players have been transferred between different countries.

On the negative side, it does give some clubs too much of an advantage and, as we have seen at Chelsea, lead to changes that we may not necessarily want or like.

Is CFC's present situation harming the game of football? I guess the answer lies somewhere between 'yes' and 'no'!

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As I mentioned oblue, it doesn't all revolve around RA and his wad of money. You have to look at the overall affect of finance on the divisions.

Take Bristol City for instance. They missed the chance of promotion to division 1 last season when they got beaten in the play-offs. They got rid of their manager (too expensive to keep) appointed Brian Tinnion, one of their long serving midfielders as player manager, and dumped their best striker, Rougier, who was also too expensive to keep.

Losing the play-off lost them £1m which they would have realised on promotion in, mostly, better gate receipts. It might not sound like a lot of money when we talk about players earning £100,000 a week, but in the 2nd division it would have as much imapact as Chelsea having a good run in the CL!

The revenue they can expect to receive in TV receipts in division 2 will be around £218,000 as opposed to the £729,000 minimum they would have recieved had they won in Cardiff.

I don't see much filtering down of money here.

A quote from the Western Daily Press: "Over the past few years most of us have grown used to equating football with colossal sums of money. The second division is not like this. Last year City's turnover was £3.8m, an improvement of £140,000 in 2002, but not enough to eradicate pre- tax losses of £1.92m. Like most professional football clubs, City's biggest cost is its wage bill, which stood at £3.94m last year."

You don't need to be a rocket scientist to do the math.

So, even in the second division we see player's wages are eating up the resources of the club and threatening its very survival.

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Point taken Richard but players wages were a problem long before RA arrived at CFC.

It's partly due to media hype. If you think of it, there is no shortage of footballers so in theory (law of supply and demand) they shouldn't command very high wages. If this problem could be addressed, there's no reason why all league clubs shouldn't at least break even.

And should Bristol city draw Chelsea in the FA Cup next season, there is little doubt that they will profit more from the match, than if Chelsea had followed the path Leeds have! So there is a bit of 'trickle down', even to the lower divisions.

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Originally quoted by Nick Whetstone: "Look at Formula One motor racing. It's getting boring because one or two teams who have the most resources win nearly all the races making the outcome too predictable. Result? The ruling body of motor racing are bringing in rules that make it easier for the 'poorer' teams to compete with the 'rich' teams."

Very sensible, it looks like a good way forward to me Nick.

We definitely need that kind of thinking in football. We especially need the financial side of it to be regulated to ensure we don't get the monotony of a few teams winning all.

Also, there is a great 'community' spirit in football which is unlike any other company/consumer relationship as we claim the club to be 'ours'. In one sense we want to win trophies etc. but it doesn't make any difference to us if we don't because we still identify with the club and its supporters through good and bad times. I would hate to see the lower divisions lose that as it has been a part of the culture of England for a very long time.

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I can't see that we're ruining football. The spending power that Roman Abramovich has is all going back into football so that other clubs can also buy players. In a roundabout way football was starting to ruin itself during the late 1990's and into 2000 with clubs spending more than they could afford. Leeds are a prime example. If Abramovich hadn’t come to Chelsea then at least we would have had assets to sell had we got into further financial difficulty.

With players being bought, then other clubs are also benefiting so that they can also buy players. It’s economics. Let’s face it, without money football may not exist anyway, so having Roman Abramovich as a benefactor is obviously helping Chelsea and football as a whole.

Couldn’t you say that ITV Digital almost ruined lower league football by going bankrupt? In my opinion that certainly IS a case of ruining football, not Roman Abramovich and Chelsea Football Club.

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No one can seriously say Chelsea or RA are ruining football. If it weren’t for his spending last year the transfer market would have been flat. Money spent by Chelsea has helped other clubs by generating income as more clubs have funds to spend as transfer activity grew, and money did filter down the leagues.

Its the lack of financial management that’s the main problem. If a club can’t afford a player then they shouldn’t sign him. The problem is chairmen’s egos get the better of their brains and silly decisions are made for short term glory while jeopardising the long term future of the clubs. At least in the Bristol City example they have the sense to look long term and live within their means, or at least minimise their losses. if clubs spend more on transfer fees and wages than they earn, then naturally enough they'll go broke, Russian Billionaires excepted.

The biggest worry I think is the massive gulf between the Premiership and the lower divisions which is widening all the time. This is leading to less competition as everyone knows the promoted sides will probably fill at least two of the following seasons relegation places, making the league too predictable. Somehow the finance has to filter down from the Premiership clubs to reduce the gap.

Generally Premiership clubs which get relegated have financial mismanagement to blame, be it in the form of overspending on transfers or wages or ground improvements. Look at the position Bradford are in, all because they wanted to be a Premiership team. Remember but for the intervention of RA last year we would have been in worse shape than Leeds. It's a fine line but that is why clubs employ people who are supposed to know how to run a business to avoid the pitfalls.

Running a club financed almost entirely from television revenue is a dangerous game and when ITV Digital went under it showed just how precarious our football clubs are. At the end of the day, Football is a business, and like businesses there are big ones and small ones, successful ones and ones that fail. The only problem for us fans is that in football, failure as a business ultimately means no more club.

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quote:[.

Running a club financed almost entirely from television revenue is a dangerous game and when ITV Digital went under it showed just how precarious our football clubs are. At the end of the day, Football is a business, and like businesses there are big ones and small ones, successful ones and ones that fail. The only problem for us fans is that in football, failure as a business ultimately means no more club.


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What? And you reckon CFC are run 'as a business' and not Roman's play thing? You cannot seriously be telling us that? What happens if he does get bored? Does take his money? Where does that leave the club?

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I'm amazed at all the personal friends of RA and PK who post here!

I didn't know that CFC was a 'play thing', or that RA was prone to getting bored with his 'play things'. Thanks for that information!

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