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richard

Chelsea Finances Thread

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More talk today on Skysports about the German takeover bid. Can't be bothered to link... doesn't say anything new.

Here it is; http://www.skysports.com/story/0,19528,11661_4855502,00.html

The final quote is comedy gold; "We have no intention of launching a hostile takeover. This is only possible as a friendly deal."

I wasn't aware a hostile takeover was even possible where one person owns 100% of the shares in the company, and none are publicly listed.

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I wasn't aware a hostile takeover was even possible where one person owns 100% of the shares in the company, and none are publicly listed.

Bruce Buck has one share ;)

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Daniela   
For Roman it will be a great opportunity to prove he's committed to the club. Like, "I love the club, and I refuse any ammount of money." He wants to prove his commitment, and he'll be glad if he is presented with a chance to do that.

I personally don't believe he's going to sell the club. Maybe I am naive, but I think he's a man of his word, and the concept "responsibility" matters to him much. He'd refuse two milliards, I fancy.

Let's wait and see, though. :)

I also think that he's a man of his word.

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Paige Y   

:s ...I really hope we don't get a new lousy owner. I don't really like Roman but he isn't that bad. I would rather stick with him than a/a few owner(s) that might worsen the current situation in Chelsea.

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Karan   

On the Official Site.

The group results for the financial year end June 30, 2008 also revealed that half of the interest-free loans from Chelsea Ltd, whose ultimate controlling party is Roman Abramovich, have been converted into equity demonstrating a continued and strengthened commitment from the shareholder to the football club.

The results followed another year of relative success on the field with football and media revenues all showing large rises on the previous financial year.

The main figures were:

  • group turnover up 11.9% to £213.1m from £190.5m (2006/7)
  • football activities up 14.8% to £189.8m from £165.3m
  • of this media revenues are up 30.2% to £77.6m from £59.6m
  • Shareholder loans have been reduced to £339.8m while shareholder capital/equity has increased to £369.9m
  • losses reduced by 43% before exceptional items to £42.6m from £74.8m
  • losses reduced by 12.2% after exceptional items to £65.7m
  • wages and salaries as percentage of turnover before exceptional items 70.6%
  • gross turnover of £248m (includes adidas and other merchandise and Chelsea Digital Media not consolidated in group results).

Chelsea chairman Bruce Buck said: 'Following the conversion of half of the interest-free loans into equity there should now be no doubt as to the owner's commitment to the club and the stability of the company's funding structure.'

'We have always believed that this "debt", now reduced by 50%, has been misrepresented. Chelsea has no external debt and makes no punitive interest payments to external funders.'

The results include exceptional items of £23.1m related to compensation payments to two first team managers and five coaching staff.

These are treated under wages and salaries for accounting purposes only. Wages before exceptionals were £148.5m (£132.8m 2006/7) and after exceptionals £171.6m.

Chelsea has also conducted independent research by TNS (October 2008) that indicates the club has 110 million 'core' fans globally, an increase of 20 million on the previous research.

Chelsea chief executive Peter Kenyon said: 'There is no doubt that the positive upward trends of turnover and the continued reduction in losses shows that Chelsea is building a strong business base to build on in what will be challenging times. This is even more evident given that the results were adversely affected by the exceptional items. 'We have set ourselves ambitious targets to be EBITDA neutral on June 30, 2010 and to require zero cash funding from the owner at the beginning of the financial year 2009/2010.'

'We have consistently advocated the aim of self-sufficiency which has always been supported by the owner. We are hopeful of being close to these targets in the timeframes we have set given the underlying strengths of the business.

'Success on the field is a key part of this. But in line with our long stated business aims, any squad restructuring in the summer will be funded predominantly by sales as we have consistently reduced our net transfer spend over the last five years and will attempt to continue this trend.'

'This is the fifth set of financial accounts since the takeover and Chelsea has made huge progress during that period as a football club and a business.

'In that time we have had significant on-field success, our turnover has increased by 96%, which ranks us fifth in the world, and our fan base has increased hugely. That gives us great confidence for the next five years.'

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Roman converting half of his loans to equity bodes well for the long term future of the club. Interesting to see that if not for the managerial payoffs, we would have reduced losses by around 30 million - this in itself stresses on the need for managerial stability not only for sustained success on the pitch but also for the long term financial health of this club.

The club have again said that not much money would be available in the summers for transfers in the aim to break even which looking from a financial perspective is okay so it is imperative that we invest in the right kind of players(no more Shevchenkos).

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QueSera   
On the Official Site:

another year of relative success on the field

Woo whoo, relative success!

Relative to Fulham perhaps?

Yours,

a core supporter

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The reduction is in 'net' spending, not in total spending.

This summer we will bring in £30 million plus from player sales and we have £20 million from the Bridge and SWP sales burning a hole in the pocket too. You only have to add about £10 million to that and you have an ample transfer kitty in the summer, and less net spending.

They said that competitng at the highest level in football is important, and its clear that rebuilding is neeeded. So far all the players going out there will be other younger talent coming in. And I'm sure if a big player is required (a la Robinho) then the money will be there.

Good to see Roman converting the loans into equity. Not quite sure how that works in practice, can anyone explain? I think I understand it at a basic level, but how does that work out practically?

And losses down again outside of the payments to managers. Good stuff.

People moan about us not spending, but I'd rather see a properly run business making a profit and able to be self-sufficient, and have this support the running of the club and our continued success on the pitch than be constantly in debt, reliant on the owner and spending £100 million every summer.

That's not to say we should sacrifice success for profit, as I think to keep profits you need to be successful, which means investment in players. But its getting a balance. That's why there was such an investment in the academy, scouting and youth system. It means we don't need to spend as muuch long-term.

Good job PK. Got the sponsorship stuff, increased income and got us on a more stable level financially. Exactly what you're paid for.

Relative success - 2nd in the Prem, CL final (only lost on pens) and CC final. I'd say that's pretty good, unless you're a spoilt brat with ridiculous expectations.

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Reel   
Woo whoo, relative success!

Relative to Fulham perhaps?

Yours,

a core supporter

I lol'd.

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