richard

Chelsea Finances Thread

1,878 posts in this topic

Firstly, I'm very happy with the way PK and RA are running the club. Since Claudio's departure I don’t think PK has put a foot wrong. He's been open and honest when interviewed and in Mourinho I think he's made an excellent choice. Townie, like everyone else you are entitled to your opinion. But just as you are entitled to voice your opinion, I’m entitled to comment on it if I feel so inclined. Everyone disagrees with some of the things on here, I just react strongly to continual diatribes against my club which have no foundation.

Onto the serious debate, Nilesh hit the nail on the head. The richest clubs have always dominated the league; Man U, Liverpool, (even Blackburn bought a title). It's strange how, now that we have a "new" rich club on the scene its upset the traditional order of things and fans of the rich clubs take exception to it. Clubs should live within their means and if they attract enough support and sponsorships they will grow. Success goes in cycles, its now our turn at the top and we should make the most of it as it wont last for ever. I also would prefer a successful CFC over a successful national side. I can't see how Uefa's plans will benefit the England team, as was posted earlier, we have had a "ban on foreigners" in place which didn’t work in making England any more successful, actually they were less successful than they are today. We dominated the European Cup at club level but couldn’t even qualify for a major tournament at international level.

As MM put it its evolution, and as the game continues to evolve clubs will rise and fall. It's always been that way and always will be.

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Originally posted by Nilesh: "We do nothing!

No you wouldn't would you! You'd be quite happy for a club to go under and show it no mercy. Remember this; CFC were rescued by a billionaire. It was he who pulled us out of the mess we were in.

"Clubs should live within their own financial means, not try and hobble or crab at those that are successful."

Well that's the pot calling the kettle black! CFC financially successful? Sheer tosh! We were up to our eyes in debt and extremely lucky to get the man with the Midas touch. At the end of the day we were just fortunate enough that he wanted to come to CFC. So just remember the pit *we* were in before you start wanting to shovel dirt over the pit other clubs are in.

You said you care about CFC most of all. How would you have felt if your beloved club had gone under? What? You would go and support Arsenal?... I thought not. Perhaps you don't understand the culture of the game and what a football club means to a particular town and it's community. If you did, you wouldn't be so hasty to see others go under.

It's true that this country tried to subsidise failing industries, especially the coal industry and the steel industry. I along with thousands of other people were very happy that our taxes went to support others who's jobs were on the line. I would have been willing to pay more. If we hadn't imported so much coal & steel from other countries, the communities in the Welsh Valleys might still be around! A few have revived, others have been completely destroyed. Get the analogy?

"It would be *illegal* for any UEFA rule which forced clubs to discriminate against other EU residents for employment with them."

Firstly, UEFA aren't discriminating against other EU residents. They only want to *limit* the number of foreign players we have in the squad.

Secondly, I think the law is an ass when it comes to football. Taking the discrimination law to it's logical conclusion, teams could be forced by the EU to take on professional women footballers from other Eu states, otherwise we would be seen to be discriminating against *them*... which, by the way, *we are*.

By not investing in our young English players, who *are* EU residents, we will be shooting ourselves in the foot and surely discriminating against them.

The EU will have to make allowances for football because of the way players are bought and sold. It isn't 'normal' employment as such. I don't call it discrimination, I call it a common sense way forward.

"Given a choice: would I want England to win the World Cup or Chelsea to win the EPL, there is no contest; Chelsea wins every time."

Nilesh, obviously that is your personal preference. But I think it is a curious choice when you have just seen what winning the Euro has done for Greece. CFC winning the EPL would be great. However, it would satisfy *us* as CFC fans but it wouldn't exactly do anything for the nation would it?

I am unashamedly an English fan as well as a CFC fan. It's great to see English players like Rooney and Owen, FL and JT developing at an international level. Hopefully they will go on to be part of the next World Cup squad.

The CFC lads wouldn't have had a look in at Euro '04 had it not been for Claudio re-establishing an English backbone to the team over the last few years.

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MagicMunky, I entirely agree with you. But I haven't said *anywhere* in my posts that I want to see an end to foriegn players in the team.

What I said is that I agree with what UEFA are proposing and they are *not* proposing there should be no foreign players but a limited number. I honestly think it's a good way forward for the game.

Of course I want to see the likes of another Zola and the many great stars we've had playing alongside younger players, I'd be crazy not to. They have added so much to the game and I hope they will continue to do so.

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Well, this is certainly the most emotive debate I've seen on here in a while. I'm quite surprised that no one's mentioned the idea of salary caps yet.

As I understand it, and I'm happy to be corrected, the National Football League in the US (that's the ballet in body armour League, not their "Soccer" league) uses a salary cap system to ensure that no team can spend more than a certain percentage of its income on wage bills. Obviously the primary consideration for a club such as Chelsea / Man U / Real Madrid in this era of overblown salaries is the accumulated wage bill.

The problem then becomes the actual income of each club. I believe that United outstrip every club in the world by a considerable margin. Real, Juventus (and yes, Chelsea) are all up there in the top 10 but the global merchandising empire built by Kenyon for the Cockney Reds is still the benchmark. To an extent, the salary cap idea would force the majority of clubs to blood the youngsters earlier and put the emphasis back on training and youth rather than acquisition of top talent. And, probably, get destroyed weekly by those that can aford Henry, Shevchenko et al.

Of course, the Premiership has its own special problems. As someone's already pointed out, there's a lot of TV money flying around that doesn't get handed out as fairly as it should do. Without wanting to offend supporters of certain clubs, Japanese viewers don't tune in to watch Boro - Spurs. Mind you, neither would I. But do you lot thnk it's fairer for there to be a "pot" of TV cash that's shared equally among the clubs regardless of how many games are shown on Sky?

What a mess.

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Wage capping? What a great idea Rob. Sharing the Sky booty around? Brilliant! As you said it's a mess and my one great fear is that the escalating wage bill will eventually rip the heart right out of the game we love.

I read this recently on the BBC World Service:

"For years money kept rolling in to Europe's football clubs. The growth in transfer payments and player salaries seemed limitless. But the climate's changed. TV rights deals in some countries have collapsed. The days of big money transfers are numbered. So now the G14 clubs, as they call themselves, have decided to tighten their collective belts. At their meeting in Brussels today, members -- including clubs like Bayern Munich and Barcelona, as well as the British representatives -- agreed to impose a ceiling for player wage bills. The aim is to keep them to seventy percent or less of total turnover.

But can it be enforced? The answer technically is no - it's a voluntary agreement and there are no penalties for those who don't control wages. However, the G14 group also announced a commitment to link pay more closely to performance on the field. The veiled warning to players was clear - if there's no action, more clubs will struggle or even go bust."

Unbelievably, that was an article written in 2002! If anything, player's wages have now gone into Disney Land proportions.

Hopefully, I think there is some light at the end of the proverbial tunnel. Whereas before there were no penalties for not controlling wages, it seems now that UEFA are bringing in penalties to deal with the huge problems in the Scottish leagues. The Scottish Premier league is almost hitting financial ruin with clubs in massive amounts of debt. This from the Scottish Daily Record:

"ABERDEEN chairman Stewart Milner yesterday warned SPL clubs could be hit with UEFA sanctions unless they start capping salaries.

He wants a limit of £1000 a week for players and says the move would help clubs balance their books.

The Dons' chairman insisted it is a necessary step as Europe's governing body draws up plans to punish clubs who cannot keep their finances in order.

He said: 'there has been a lot of talk about UEFA bringing in a licence scheme for clubs and this will happen.

'It will mean every club having clear financial parameters to work within if they want to retain their licence.

'If we do not manage our affairs properly we will not be permitted to play under UEFA's umbrella.

'Few clubs in Scotland would qualify for licences at the moment. Things will probably get even tougher for our clubs if is left to UEFA to come in and impose any changes that must be made.

'Clubs must work together to control football's finances much better than they have over the last 10 years.

Rangers may be refused a licence if they don't get their act together. They have £60m of debt!

Article... JUNE 2004

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quote:Originally posted by richard

Originally posted by Nilesh: "We do nothing!

No you wouldn't would you! You'd be quite happy for a club to go under and show it no mercy. Remember this; CFC were rescued by a billionaire. It was he who pulled us out of the mess we were in.


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Chelsea were not 'rescued' by Roman. At worst we would have had to sell some from JT, WG, FL or EG. Roman paid £140M for Chelsea Village (£80M of assumed debt and £60M for the share capital), contrast that with Leeds who fetched less than £30M in bankruptcy. Also, the football club was profitable, it was the rest of the Village that was the albatross around the club's neck.

quote:

"Clubs should live within their own financial means, not try and hobble or crab at those that are successful."

Well that's the pot calling the kettle black! CFC financially successful? Sheer tosh! We were up to our eyes in debt and extremely lucky to get the man with the Midas touch. At the end of the day we were just fortunate enough that he wanted to come to CFC. So just remember the pit *we* were in before you start wanting to shovel dirt over the pit other clubs are in.


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Typical emotive nonsense. You have obviously confused last year with the early '80s, when we were indeed close to folding. Even in 2002/2003 Chelsea were the 10th largest club by revenue in the world, with revenues of £89M. Employee salaries, including support staff, totalled £56M. All these figures and more can be found in the annual Deloitte & Touche reports on football finances.

quote:

You said you care about CFC most of all. How would you have felt if your beloved club had gone under? What? You would go and support Arsenal?... I thought not. Perhaps you don't understand the culture of the game and what a football club means to a particular town and it's community. If you did, you wouldn't be so hasty to see others go under.


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As for myself, I would continue to support CFC *even* if we had been thrown out of the league and ended up in the conference, and I would not have blamed ManU, Arsenal, Liverpool etc. and begged them to subsidise us.

If a community values a football club enough they will find a way to save it. If they can't, then don't expect others to do it for them. There is no reason why the Barrows and Accrington Stanleys of this world have to continue to exist forever.

quote:

It's true that this country tried to subsidise failing industries, especially the coal industry and the steel industry. I along with thousands of other people were very happy that our taxes went to support others who's jobs were on the line. I would have been willing to pay more. If we hadn't imported so much coal & steel from other countries, the communities in the Welsh Valleys might still be around! A few have revived, others have been completely destroyed. Get the analogy?


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No doubt you will be mounting your trusty steed to join Ned and the lads in their crusade to save the jobs of weavers, hatters, smiths, farriers and farm labourers.

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Firstly, UEFA aren't discriminating against other EU residents. They only want to *limit* the number of foreign players we have in the squad.


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Let me quote from the Sunday Herald:

"The Uefa plans do allow for the minimum eight youth players to be of any nationality – something they have had to agree on in order to comply with EU laws – but there could still be quotas on players from non-EU countries."

As can be seen, 'foreign' is now defined as non-EU and thus the eight youths can be any of 25 nationalities and not just British/Irish.

quote:

Secondly, I think the law is an ass when it comes to football. Taking the discrimination law to it's logical conclusion, teams could be forced by the EU to take on professional women footballers from other Eu states, otherwise we would be seen to be discriminating against *them*... which, by the way, *we are*.


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Red herring. Women are not discriminated against. In fact, Perugia contemplated employing the captain of Sweden's Womens' National Team (she declined), and fielding her in Serie A. The problem for women is that they are not good enough to physically compete at the highest level with the men. There are no regulations barring them from employment by the clubs.

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Richard, define "foreign" players. With the current system of being able to chose a nation based on grand parents then many players have more than one allowable nationality I.e. Hargreaves. This would create a minor problem for the system to work since a player at 18 would need to declare allegiance to a nation.

I think on a European level this would not work too, several nations at this year’s championships had virtually no players based in their home country, I.e. Denmark, France etc. Were a limit placed these players could find themselves having to return to the native lands to play.

Far worse would be a removal of the pressure on native talents to improve enough to compete with imports. Man’s endeavours are almost exclusively reliant on pressures to continue development, in all fields like intellectual, sporting and as a community. Removal of selective pressures would result in players becoming complacent, lets put that another way; competition drives evolution. Would the Americans have landed on the moon if the Russians were not in a race with them in 1969? They possibly may not have. Would computers have developed so fast had there been only one company developing them? They certainly wouldn’t have. Would Steve Ovett and Seb Coe has achieved the heights they did without having each other to drive them to new heights? Debatable.

Aspiration is a marvellous thing, I can be better than him, I will be better than him, and I will prove I can be better than him. Complacency is not.

Has money ruined the game? Possibly, but have the moneymen ruined the game? Definitely! Fools like the former Leeds board need to be shot. They managed to almost destroy a football club with petty delusions of grandeur.

Clubs in the lower leagues are in a dire state, but many have finally caught up with reality and are developing a business plan with football rather than just football. Cambridge Utd has plans for a new stadium with a conference centre and hotel, which will offset any, loses on the football side. Using your talents to build a business around and in the club in key for football, no longer can they be reliant on TV money or selling players for telephone numbers. Charlton must be one of the best-run clubs in the country bar none, they have a financial plan and stick to it rigidly. They have developed their stadium to maximise its utility and have been sensible in the transfer market.

If other clubs follow these leads, they will realise that they can't afford a squad of 30 players, they can afford 24 and use the youngsters, develop their own players. Build into their plans spin offs etc. Then when they have done this they will be financially viable.

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Rob, I agree that wages are THE major factor in the games problems, and obviously if clubs can control there costs that’s half the battle. But how does a salary cap work? The problem with salary caps as far as my limited knowledge of them goes is there are so many roots to get around them they become virtually unworkable. What’s to stop CFC paying all their players £1000k a week, then RA employing them as "consultants" to his or a mates oil company on £90,000k a week?

It would be harder for a club "owned" as a PLC but for a club with a private owner surely the books would be a lot easier to cook. Penalties for proven breaches would have to be so severe that clubs would never risk being found in breach. Mind you taking CFC as an example, if we breached the cap and were found out and relegated from the Premiership as a result with say a million dollar fine, would that worry RA? He'd be able to afford to keep his players on their "Premiership" wages and get promoted back the next year.

However if another club was given the same penalty it could mean the end of that club. So what is a severe enough punishment that will (a) deter clubs like CFC from breaching the cap, but (B) while deterring less financially "well-off" clubs from breaching, not threaten their survival?

The TV money has to be shared out more equally for sure, but too much reliance on "TV money" is what’s driven many clubs in the lower divisions to the brink.

It’s the problem of exorbitant wages that is killing clubs off. Every year the teams relegated from the Premiership have to sell off their best players and rebuild a side only to have to re-sign similar quality players the next season if they get promoted. Leicester is fast becoming a revolving door as half the team’s players come and go every year. It’s the same story in the lower divisions. With so many clubs worldwide in financial difficulty you'd think it will eventually bring wages down to a manageable level providing everyone lives within their means, but with the massive egos involved in football is that a realistic hope or maybe too simplistic?

Of course Richard, we'd all have been shattered if we had ended up in the same boat as Leeds, but if the people responsible for running the club are financially irresponsible its a natural consequence that sooner or later we will suffer as a result. Are we saying that clubs shouldn’t live within their means and that every "rich" club should always be there to "bail them out" if they look like going under so they have teams to play against?

Many clubs have effectively "disappeared" over the years and I’m sure their fans were distraught at the time too. Who stepped in to save them? As MM said its part of evolution and while its always sad for the fans of those teams that go, it will always happen, especially when clubs want glory without having the financial security to fund it. I agree all clubs have a moral obligation to keep the game viable, but its a fine line between the moral obligation and "carrying" teams who are financially irresponsible in the way they are run.

Sorry Richard, I’m with Nilesh, I’d much rather watch CFC win the Premiership than England win a World Cup. All that happened the last time we won it is we got so complacent we didn’t 'qualify" (apart from automatically) for another World Cup for about 16 years.

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Nilesh. I do apologise for getting hot under the collar. You've made some really good points here. I must admit I get really passionate about the game and I know I'm a bit naive to think we'll all survive in the end. Of course that isn't the truth. We live in an age where clubs have to survive on their own merits.

I was wrong in thinking too that the Premiership don't give anything to lower clubs. They apparently give 10% of TV monies earned. At the moment the government are going to try to get this doubled.

Also, I do like some of the ideas being proposed which will give the clubs in the lower divisions a better way of handling their finances. As Rob said, wage capping could be a way forward but, as I've seen on sites which debate this, even that is fraught with problems.

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Crowey & MM, Thanks for you input into the debate too. You've pressed home some very good points and I appreciate that.

I think the debate will go on. As we see what's happening in Scotland to clubs who are still paying huge transfer fees and wages for players, merely to contend the CL and yet are already up to their necks in collossal debt e.g. Glasgow Rangers,debt £60m, it simply beggars belief.

I see UEFA have instigated measures to rectify this problem. Is it the right tack to take? Who knows, we'll have to wait and see what effect it has.

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