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Chelsea Finances Thread

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Hey bluegeeza, regarding FFP how are our finances sitting after all our confirmed buys? Do we have further capacity to sign anyone, and if so how much?

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Hey bluegeeza, regarding FFP how are our finances sitting after all our confirmed buys? Do we have further capacity to sign anyone, and if so how much?

yeah we have spent 80m but alot of that will be on relatively cheap wages (hazzard apart) but with the added champions leauge money for winning it :) , added to that as of NEXT season the EPL money goes up another 71% all the new global sponsorship deals we have signed also gasprom has signed a champions league deal (no doubt again more cash) so our cash intake should have SHOT up quite dramatically and no sacking compensation to AVB which saved us about 12m!!! this seasons financial record could look quite good if you look at them long term!

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yeah we have spent 80m but alot of that will be on relatively cheap wages (hazzard apart) but with the added champions leauge money for winning it :) , added to that as of NEXT season the EPL money goes up another 71% all the new global sponsorship deals we have signed also gasprom has signed a champions league deal (no doubt again more cash) so our cash intake should have SHOT up quite dramatically and no sacking compensation to AVB which saved us about 12m!!! this seasons financial record could look quite good if you look at them long term!

With reference to showing improving losses to the prior 2011/2012 season, the amount we spent on transfer fees alone (excluding wages) was whatever it cost for De Bruyne, Cahill, Mata, Meireles, Romeu Courtois and Lukaku, less the sales of Zhirkov and Alex. Based on speculated values I reckon we could have a very rubbery net spend estimate of about £70-£75 m which will go towards our previous years loss. Now we've been quoted that after signing Moses we've surpassed the £80 m mark, and given the increased revenue from our UCL and FA Cup wins, then we should still have funds available?

My other questions are when does the prize money from these cup wins get counted, and when some of our purchases, such as Hazard and Marin, are counted towards the 2011/2012 or 2012/2013. I'm inclined to think that it's for the current season as the transfer officially occurs when the window opens, but just wanted to be sure.

Now I haven't really taken into consideration wages, but it does look like we have the capacity, if we so choose to, to sign a final player if the above things fall into place. I'm definitely no accountant, but it would be great if someone who has been following this more closely could shed some light.

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1. The prize money for winning Champions League will be in 2011-2012 accounts. It will be an improvement of around 20 million over what we got in 2010-2011. However, if we win UEFA super cup and FIFA club world cup, that money will be in 2012-2013 accounts.

2. The 70-80 million that we have spent this year, all those players have been signed on ~5 year contracts. So this will be ammortized (spread) over 5 years). Thats 14-16 million per year starting from 2012-2013 accounts. Add their wages to that.

3. The earlier purchases Ramires, Luiz, Torres, Mata, Romeu, Lukaku, Courtois, Cahill, De Bruyne will still have an impact in the accounts as their costs will not be written down in the period they were purchased but over the length of their contracts. ex. Torres signed five and a half year contract. So the 50 million pound, which means 9 million every year till 2015-16 and 7-10 million further for his wages (depending on which source you believe).

4. The new EPL deal start from 2013-14 season. So, we wont have a marked improvement in tv money for 2012-13.

@blue_geeza; We can do that but not every club may be comfortable with that arrangement. Also if it becomes a pattern, UEFA might include safeguards to prevent such exploitation. Like they have some rules for sponsorship deals where they determine the fair value of a deal if it looks OTT.

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Hey bluegeeza, regarding FFP how are our finances sitting after all our confirmed buys? Do we have further capacity to sign anyone, and if so how much?

Have a look at some of the figures here.

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I've got a query with regards to FFP. I've asked elsewhere, and thought I'd see if someone here could explain something to me.

It's with regards to player-exchange transfers. I'll use a hypothetical example of Cavani & Meireles.

Now in a part-exchange the two parts to the deal would be dealt with as two separate transfers right? So Cavani for £35million and then Meireles the other way for £8million. The money for Meireles comes in all at once, right? And, as far as FFP is concerned, the money for Cavani goes out over the life of his contract?

Now, because Meireles has 3 years left on his contract, his amortization is £3million per year, so we'd need to sell for £9million to break even on his transfer (or £6million next year). With the above sale, we'd stand to lose £1million on him in this season's books.

So if, in the scenario above, we could convince Napoli to buy Meireles for £10m rather than £8m but sell us Cavani for £37m instead of £35m, the same amount of money would change hands but we’d have an extra £2m to play with now in exchange for having £400k/year less for the next 5 years (for example).

The same would hold true for Napoli; they’d have an extra £2m up front for Cavani and then ‘pay it back’ over the life of Meireles’s contract.

Could this mean we start seeing player-for-player trades where the clubs essentially lie about the value of the players in order to loan themselves future FFP money?

And what about a deal outside of UEFA – e.g. for a South American player? Could we claim a part-exchange player’s value is much more than he’s actually worth?

I've read this elsewhere. Supposedly that's why Chelsea have gone for young players as their re-sale value will be high. That's imperative for the FFP due to the above-mentioned mechanism you described above.

By selling players with high re-sell value we effectively fund transfer spending. It's something I'm sure te club has taken into consideration. But for this to work properly you obviously have to be ahead of the curve (which we are now).

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Chedaki   

Can anyone provide realistic figures as to what sort of wages that the players are on at the moment? Or otherwise if there is a website which details this?

It really is astonishing the huge wage bill, I'd imagine if we are able to reign that in to an acceptable level it will be key to that magical 'Break-even' point.

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1. The prize money for winning Champions League will be in 2011-2012 accounts. It will be an improvement of around 20 million over what we got in 2010-2011. However, if we win UEFA super cup and FIFA club world cup, that money will be in 2012-2013 accounts.

2. The 70-80 million that we have spent this year, all those players have been signed on ~5 year contracts. So this will be ammortized (spread) over 5 years). Thats 14-16 million per year starting from 2012-2013 accounts. Add their wages to that.

3. The earlier purchases Ramires, Luiz, Torres, Mata, Romeu, Lukaku, Courtois, Cahill, De Bruyne will still have an impact in the accounts as their costs will not be written down in the period they were purchased but over the length of their contracts. ex. Torres signed five and a half year contract. So the 50 million pound, which means 9 million every year till 2015-16 and 7-10 million further for his wages (depending on which source you believe).

4. The new EPL deal start from 2013-14 season. So, we wont have a marked improvement in tv money for 2012-13.

Thanks, great response, appreciate the effort.

Also read the link from bluegeeza.

If I understand this correctly, retaining players like Lampard past 29/30 will be the thing of the past, and teams with higher revenues ie. Madrid can afford to retain players at higher peak ages and valuations (and supposed peak ability) whereas we will be moving towards a less extreme version of what Arsenal is doing.

This will more or less put a premium on younger players as teams chase resale value, and perhaps a discount on players 28-30. Then there will be the trade-off between chasing prize money and sacrificing future resale. Would also mean that an influx of funds from cup wins is a massive cash injection but will only be counted during one period.

I looked at the numbers and don't understand enough about FFP to realise why we comply while increasing our expenditures, even with amortisation. I'm guessing there's certain allowable loss ranges in place in the two years prior to FFP commencing, but I always thought it was more based on the show of losses improving. Can someone clarify?

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Harvz   

Well anything that keeps the owner 3bn richer can't be bad.

Free Bentley's for everyone at the next home game to celebrate, Roman?

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