Chelsea finally conceded defeat in their oft-repeated ambition to break even by 2010, announcing a £71m loss for the year even as owner Roman Abramovich authorised a £50m deal to prize Fernando Torres from Anfield.
The losses mark a £27m increase on the 2008-09 season when player sales reduced the figure to £44m, the lowest loss recorded by the club in the seven full years since Abramovich took control.
The club has been engaged in cost-cutting for more than two years in an attempt to meet former chief executive Peter Kenyon’s promise that it would be free of its reliance on Abramovich by 2010.
Yesterday’s figures underline the continued reliance on the Russian’s largesse however, taking the total losses under his ownership to more than £550m.
A club source said that while the intention was still to reduce the burden on the owner and the would seek to develop their own talent, the Torres deal demonstrated Abramovich was still willing to invest to improve the team.
The figures will also raise questions as to whether it will be able to comply with the financial fair play rules being introduced by Uefa.
The club published only brief selected details from its results for the year ended June 2010 and chose to highlight the fact that for the first time it had a positive cash inflow of £3.8m for the year, the first time that has occurred under Abramovich.
It was achieved in part thanks to the sale of Steve Sidwell, Tal Ben Haim and Wayne Bridge, but was offset by the ongoing cost of existing player contracts and transfer fees to the bottom line. The Torres deal, worth roughly £100m over five years in transfer fees and wages, will add another £10m to the losses for this season, and £20m for the following four.
The full accounts are not yet available via the club or Companies House, so it is not possible to carry out a detailed analysis, but the numbers released by Chelsea showed revenue was flat – up just £2.5m to £205.8m. Despite this Kenyon’s successor Ron Gourlay insisted they were “moving in the right direction”.
“The club is in a strong position to meet the challenges of UEFA 'financial fair play' initiatives which will be relevant to the financial statements to be released in early 2013,” he said.
Gourlay’s confidence stems partly from the time horizon. He has three years to reduce the losses to within the 45m euros allowed by Uefa’s rules.
There is also confidence that the club will boost its revenues this season despite being limited by the capacity at Stamford Bridge. It is hoped the new kit deal with Adidas could be worth £25m, and naming rights for Stamford Bridge could add a further £10m a season. Ticket prices have risen for the first time in five years and player bonuses have been reduced. Perhaps most significantly the number for this year will also benefit from big earners Joe Cole, Michael Ballack, Deco and Ricardo Carvalho. The club also argued yesterday that the 2008-09 loss of just £44.9m was artificially low because of player sales.
The timing of the announcement prompted speculation that the club was seeking to bury bad financial news under the weight of transfer deadline-day business.