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Chelsea Finances Thread

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Marwan   

We just need to offload these players and our wage bill will be reduced to 45% of our turnover. Ballack 121k(5.8M saved per annum), Drogba 120 (5.8M saved), Deco 100 (4.8M saved), Malouda 60K (2.9M) , Mineiro (not sure but abt 20K, a saving of 1M), Ferreira (40k, a saving of 2m), Kalou (40K, a saving of 2M). Do the math; We will have made a saving of 24.3M per annum in a year. We can then replace Drogba with a big name striker on 100K like Benzema, and then Kalou can be replaced by kids willing to earn about 20K until they prove their worth. We can focus on kids from eastern europe and south america who are cheap to obtain for such figures

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paulw66   
Speaking as an accountant I would comment that the conversion of loans to equity doesn't neccessarily solidify Roman's long term commitment to the club. He is the sole shareholder and as such would receive the bulk of any acquisition funds whether his investment was represented by shares or interest free loans.

Secondly, the only way the club is going to "wash its own face" next season is by a significant cost cutting exercise, namely players wages (Ballack, Deco and Drogba springs to mind here), recouping a little transfer monies by cutting out the dead wood (Kalou, Malouda and Mikel), and ensuring they are in the Champions League.

Thirdly they HAVE to stop looking for the instant remedy of quick fix signings (Anelka and Deco). They end up either paying through the nose for has beens or paying vast wages on free transfers. Rather than paying wages based on "reputations" sign the players who are prepared to come to us with something to prove and promise them the lucrative contract ONCE they've proved themselves. A little long term vision is required and a sense of progression within the squad neccessary.

One other thing to bear in mind. If you imagine a player on £100k a week is probably being paid net, so the cost to Chelsea, rather than the imagined £5.2m is probably closer to £7.5m a year

Oh, and shoot the "suits", the agents, and the middlemen. That should get us nicely into the black.

Whilst I respect your views on the accountancy part of this.... to say Mikel is dead wood is nonsense. Personally I think he has been one ray of light this season and people forget he is only 21!!!!!!! If a home grown player was in the team at 21, people would be far more fogiving in any drop in form, citing his age and inexperience.

Secondly, in England the players get paid gross. In italy it is net - not sure about spain.

Agents - as much as they are disliked, getting rid of them is not an option. Every player has one so not dealing with agents would mean not doing any deals with anyone (even our own players).

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Someone else said it before - la la land.

Just because we sold a couple of players doesnt make that money available to spent on something else.

What you fail to obviously realise is that there has to be a market for these players and a buying club at the other end of the agreement. Who in their right mind would want Deco, Drogba or Ballack? Kalou might be wanted by Birmingham and Malouda might be wanted by QPR but would either be willing to go?

Where on earth did you pluck this from? Its like a word association game - a case of saying the first thing that pops into your head. We will NEVER get £15m for Drogba, we will NEVER get £10m for Kalou, we will NEVER get £10m for Alex.

Alright. Lets say we get ANY fee for these players right? Your valuation is moot. If we sold all of those players it would take an incredible amount of money to replace them with players. Your mythical £70m would come up very, very short if we want players that are better than what we are getting rid of. If you think that Kalou is worth £10m then Ribery would be worth £30m. If you think that Drogba is worth £15m then Villa is worth £35m. All of a sudden we have but a measly £5m for replacements for the rest.

Its complete cuckoo land James.

I'll go on record now and say that Drogba, Malouda, Kalou and at least one of Deco, Alex and Ivanovic WILL NOT LEAVE CHELSEA THIS SUMMER. If that is the case, then this £70m kitty will be £45m short.

Where is it going to come from then?

Chelsea have SAID that money for players will come from SELLING PLAYERS. Its clear that the squad neds overhauling and that Drogba wants to leave. Malouda isn't good enough. Ivanovic and Alex are always being linked with moves away. Kalou isn't good enough long-term and Deco is on the way out now.

They have SAID there will be 'lots of movement in the summer' (Kenyon), which implies a lot of players out and a lot of players in.

Drogba will go for at least £10 million. He's still very highly rated and Jose wants him at Inter. They have money, so we can charge them a little more. Kalou will probably go for between £5-10 million (we had an £11 million offer last summer). We may even sell Anelka which will bring in £10 million. Alex is not as bad as you think, and I think would bring in £10 million - especially if its Man City.

We have £20 million from SWP/Bridge in the bank. Not spent any money since these were sold.

Even if we make in total £50 million, the club have actually said that 'most' of the money will come from transfers. The club will make some money available themselves, it will probably be only £10-20 million. But nevertheless the money will be there.

My valuations are not cloud cuckoo land. They are realistic. You are just being overly neagative and cynical IMO.

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Adaemus   
Don't forget that Ballack had it in his contract that he could be paid in Euro's, which with the current devaluation of Sterling against the Euro equates to approx a 32% rise. (ie £124k pw then would = £163k pw now!).

Player, Club, wage per week, wage per annum (info as of last season):

Frank Lampard Chelsea FC £130,050 £6,762,600

John Terry Chelsea FC £130,050 £6,762,600

Andriy Shevchenko Chelsea FC £124,313 £6,464,250

Michael Ballack Chelsea FC £124,313* £6,464,250*

Didier Drogba Chelsea FC £117,619 £6,116,175

Michael Essien Chelsea FC £80,325 £4,176,900

Joe Cole Chelsea FC £74,588 £3,878,550

edit, checked Sterling/Euro rate and changed 35% to 32%

With Shevchenko gone, Drogba going and Ballack either leaving or onto a pay-as-you-play deal that should effectively reduce our outgoings on wages by nearly £400,000. Add to that whatever figures there are for people like Bridge, Cudicini, Alex/Inavovich, Malouda and Deco and we should be able to not only make some money this Summer but also reduce our wage bill significantly.

According to this Football365 article our wages account for 70.6% of our turnover. Whether that is accurate or not I'm not sure, but it is safe to say that we are spending far too much on wages. The only long term solution to this problem is to buy young, hungry players; put them on an average wage (as in league average, not OUR average!) and then see if they come up through the ranks. If they become superstars then by all means offer them a good deal but if they don't make the grade then we haven't really lost anything.

We still have to have aspirations of being a top team, we just need to realise it isn't going to happen immediately and if we reduce the chunk of our turnover reserved for wages then that will naturally free up more money for transfers. We can't follow Real Madrid - they've always had outside assistance be it from the government or the banks - we have to follow the model of teams like Man Utd, Inter Milan or Barcelona. In which case, we can forget about buying players like Aguero, Benzema or Villa this Summer. Short of getting the money in gift form from Roman, we have to look to the long term and in a year or two we may be able to buy world class players again; without the debt hanging round our necks.

Oh, and I presume the conversion of loan to shares from Roman represents the 'big announcement of commitment' we had been promised. No new stadium then... Hehe.

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Guest   
Guest
Speaking as an accountant I would comment that the conversion of loans to equity doesn't neccessarily solidify Roman's long term commitment to the club. He is the sole shareholder and as such would receive the bulk of any acquisition funds whether his investment was represented by shares or interest free loans.

Secondly, the only way the club is going to "wash its own face" next season is by a significant cost cutting exercise, namely players wages (Ballack, Deco and Drogba springs to mind here), recouping a little transfer monies by cutting out the dead wood (Kalou, Malouda and Mikel), and ensuring they are in the Champions League.

Thirdly they HAVE to stop looking for the instant remedy of quick fix signings (Anelka and Deco). They end up either paying through the nose for has beens or paying vast wages on free transfers. Rather than paying wages based on "reputations" sign the players who are prepared to come to us with something to prove and promise them the lucrative contract ONCE they've proved themselves. A little long term vision is required and a sense of progression within the squad neccessary.

One other thing to bear in mind. If you imagine a player on £100k a week is probably being paid net, so the cost to Chelsea, rather than the imagined £5.2m is probably closer to £7.5m a year

Oh, and shoot the "suits", the agents, and the middlemen. That should get us nicely into the black.

...Mikel is dead wood?

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QueSera   
Can someone confirm when the financial year these reports are based on ends?

Easily done, read the first line of the statement (as repeated in the first line of the first post):

QUOTE

The group results for the financial year end June 30, 2008

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paulw66   
Where on earth did you pluck this from? Its like a word association game - a case of saying the first thing that pops into your head. We will NEVER get £15m for Drogba, we will NEVER get £10m for Kalou, we will NEVER get £10m for Alex.

Alright. Lets say we get ANY fee for these players right? Your valuation is moot. If we sold all of those players it would take an incredible amount of money to replace them with players. Your mythical £70m would come up very, very short if we want players that are better than what we are getting rid of. If you think that Kalou is worth £10m then Ribery would be worth £30m. If you think that Drogba is worth £15m then Villa is worth £35m. All of a sudden we have but a measly £5m for replacements for the rest.

Its complete cuckoo land James.

I'll go on record now and say that Drogba, Malouda, Kalou and at least one of Deco, Alex and Ivanovic WILL NOT LEAVE CHELSEA THIS SUMMER. If that is the case, then this £70m kitty will be £45m short.

Where is it going to come from then?

saying at least one of Deco, Alex and Ivanovic will not leave is not exactly a bold statement. James' orignal post said Alex or Ivanovic, so what's your point? you're agreeing with james there but you say it in a manner that is disagreeing. I think it is very likely one will go but only one.

To say we would never get those fees for the other players.... let me ask you how much Man City would pay for Drogba and Alex.... £15m £10m wouldnt be far wrong and I reckon if we put those players up for sale then City would be interested. I reckon if we put a £10m price on Alex's head there would be many clubs sniffing around.

As for the Ballack comment... he is a free agent in June. we could give him away and save £6m a year.

The comments about Kalou and Malouda going to Birmingham and QPR are just childish and devalue your argument.

Edited by paulw66

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darkblue   

Unfortunately, as others have said, James is being unbelievably optimistic and the truth is certainly nearer 'Droy's' scenario, though don't forget that in terms of genuine interest (as opposed to media rumour) it is very rare for anyone to have any interest in our players - witness no bids ever for Drogba despite it being common knowledge in teh summer and Jan transfer windows that he wanted to leave.

On top of this, yes, the players are old and possibly past it, but what about factoring in our usual policy when it comes to these types of situations. Since RA came on board we have 'sold' the following:

Hasselbaink £0 (bought £15m, admittedly prior to RA)

Gronkjaer £0 (£7.8)

Zenden £0 (£7.5)

Veron £0 (£15)

Petit £0 (£7.5)

Crespo £0 (£16.8)

Geremi £0 (£7)

Boulahrouz £0 (£7)

Makelele £0 (£16.6)

plus probably can add Schevchenko: £0 (£30)

What a business model taht is! We are useless at selling older players, even though most of the above carried on playing at a high level, often for their national sides. We have received money for the younger Robben, Gudjohnsen, Bridge, Wright-Phillips, Parker, Johnson and Duff, three at a profit (two to Man City though!) and four at a substantial loss.

In other words, if we need to self generate funds we are in the proverbial sh*t.

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Cameron   

I don't really understand the financial side of things too well in all honesty, but I'll just comment on a few things. I always thought that we would have good money available in the summer after our quiet January, this, may not be in the case. And if it isn't we cannot afford to offload all the players we would want to.

Someone like Deco or Ballack will hardly fetch great fees, a few million perhaps, and I don't think we'll be able to get better replacements for that low price. Deadwood has to go, but only if we can find a replacement before hand. It also worries me that the manager coming in will have incrediably high expectations, to win this and that, when he doesn't have a transfer budget half the size of Liverpool's or United's. They also comment that the net transfer has to decrease, we hardly spent much last summer and I would be surprised if we didn't recoup that including the Bridge fee?

Names are not an option in the summer it seems, we've got to go for other talent and hopefully we'll be able to find it. Youth players will also start playing bigger roles, so it's key that one or two are ready to come through again.

Edited by CameronCFC

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Karan   
If that all happens we have £70 million to rebuild the squad - without any net spending.

That isn't fantasy football - its real amounts for real players, at conservative prices. That's what we will bring in, and so we'll have plenty to spend without losing a penny or asking Roman for anything.

No problem.

It is fantasy football. It doesn't work this way. There's alot of creative and unrealistic accounting on here by many 'mini PKs'. :)

15million for Drogba you say! The same Drogba who's now had quite serious knee issues over the last 3 seasons, has hardly hit his stride in this one. The same Drogba who's only got one year left on his Chelsea contract, which would roughly amount to 5 million. If any club pays that much we'd be lucky given the circumstances. Assuming we even sell him, we'd have to sign someone of a similar quality and impact (atleast somewhere near the Drogba in prime). That'd be costly in itself. One way would be to offer him in a part exchange for a player we need, but Drogba would have to want to go in the opposite direction. In fact there's more of a case, I'd argue of keeping him for the last year of his contract.

I don't expect a massive kitty to be very honest. A very optimistic guess would be somewhere along the lines of 20-30 million, including sales, and at the very least 3-4 players (hopefully decent quality) may come in.

I'd be very happy though if the squad were alot more balanced than it currently is. For that money needs to spent in the right manner. One could argue that the amount spent on Bosingwa last season (16m) was not really necessary for an attacking RB, given that we had Belletti on the books, Ivanovic (a versatile RB/CB) had just signed and Ferreira (RB/LB) had also signed a contract extension. In hindsight 16 million on a quality attacker (or two) would have made alot more sense. Not a slight on Bosingwa though, he's been alright so far and hopefully would get better next season (with experience).

Its the manner of the spending thats important and its necessary that it boosts the squad in the right areas.

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