Financial Fair Play

[jcremonini]

Cheib said:

Black can man said:

How can Chelsea not be under any investigation ?

Wouldn't be anything to do with Gazprom sponsoring the Champions league would it ?

Chelsea basically front loaded a ludicrous amount of spending in the years leading up to FFP.....they spent something like £250mil just on midfield players! They "overbought" and had a few extra players in the squad they didn't need which was a way of meaning they still have some spending money.

So when they signed Matic in January Mata was sold to pay for him....sure they can still spend £30 or £40mil on a player but the days of a £100mil splurge are gone. Which is why Mourinho's been bhing about FFP.

Be interesting to see what happens as their revenues are third/fourth in the Premier League and it's debatable whether it's worth them building a 60,000 seat stadium because they genuinely don't have the fan base to fill it for all the games. I reckon Abramovich gets bored in two or three seasons as he won't actually be able to throw money at it and buy success....he'll genuinely have to let whoever is managing the team do just that.

A couple of points.

Firstly, it is impossible to know for sure that we don't have the fan base. One thing is for sure, the current stadium is too small and there is a waiting list for season tickets. I am pretty sure we could average 55,000 a match. We have to build a new stadium simply because, financially, we cannot compete with the bigger clubs until we do ( not without a rich owner anyway!)

As far as Roman getting fed up, he has put the lid on excessive transfer spending for the last 6 years. Yes, we do have the occasional splurge but it is nothing like it was. People have been saying he would be gone for a few years now. Again, it is not possible to know. I think he went through a spell of being a little fed up with it all, but he is back now. And when you have more money than you can possible spend why sell ?

One thing we have done well is buy young players and farm them out on loan , mostly with the intention of never actually using them. That is another good way of increasing revenue.

I am sure we will spend big this summer, but our income from the CL and the enormous amount of money coming in this year from TV rights and prize money ( this year even the last team will get £63m) will mean we can probably spend £100m without even having to sell ( I expect we will probably be in the black with transfers with this in mind).

[Cheib]

jcremonini said:

A couple of points.

Firstly, it is impossible to know for sure that we don't have the fan base. One thing is for sure, the current stadium is too small and there is a waiting list for season tickets. I am pretty sure we could average 55,000 a match. We have to build a new stadium simply because, financially, we cannot compete with the bigger clubs until we do ( not without a rich owner anyway!)

As far as Roman getting fed up, he has put the lid on excessive transfer spending for the last 6 years. Yes, we do have the occasional splurge but it is nothing like it was. People have been saying he would be gone for a few years now. Again, it is not possible to know. I think he went through a spell of being a little fed up with it all, but he is back now. And when you have more money than you can possible spend why sell ?

One thing we have done well is buy young players and farm them out on loan , mostly with the intention of never actually using them. That is another good way of increasing revenue.



I am sure we will spend big this summer, but our income from the CL and the enormous amount of money coming in this year from TV rights and prize money ( this year even the last team will get £63m) will mean we can probably spend £100m without even having to sell ( I expect we will probably be in the black with transfers with this in mind).

Those are fair points but everyone has got a boost from TV money this year and there are caps about how much of that can go on wages so it can't all be spent on players.

Chelsea have definitely exploited the loan system better than others but the days of investing £15mil in a player like Lukaku or£8mil in a player like Courtois have probably gone. Courtois has seemingly been tapped up by Barca and young players will now be wise to it...I doubt Lukaku thinks it's been great for his career overall.

It is impossible to tell about real demand but if Chelsea genuinely thought it was there they'd probably have spent the money a few years ago when it was cheaper and the competition wasn't so tough.

[dmulally]

jcremonini said:

we cannot compete with the bigger clubs until we do ( not without a rich owner anyway!)

[London424]

Chelsea are hoping that Roman doesn't go any time soon as if you look at the club accounts they owe him almost £1 billion.

[ascayman]

London424 said:

Chelsea are hoping that Roman doesn't go any time soon as if you look at the club accounts they owe him almost £1 billion.

Ludicrous isn't it.

If there is one team that should be hit by FFP its Chelsea.

[Cheib]

ascayman said:

London424 said:

Chelsea are hoping that Roman doesn't go any time soon as if you look at the club accounts they owe him almost £1 billion.

Ludicrous isn't it.

If there is one team that should be hit by FFP its Chelsea.

That £1bil was converted to equity quite a while ago....same with Man City's owners I think.

The problem with FFP is that it took four or five years to implement. The Premier League has it's own separate FFP rules, no idea what will happen with those.

[London424]

Cheib said:

ascayman said:

London424 said:

Chelsea are hoping that Roman doesn't go any time soon as if you look at the club accounts they owe him almost £1 billion.

Ludicrous isn't it.

If there is one team that should be hit by FFP its Chelsea.

That £1bil was converted to equity quite a while ago....same with Man City's owners I think.

The problem with FFP is that it took four or five years to implement. The Premier League has it's own separate FFP rules, no idea what will happen with those.

What does that mean?

All I've seen is a note in their accounts that says that they have a net debt of £958 million in their holding company.

[jcremonini]

London424 said:

Cheib said:

ascayman said:

London424 said:

Chelsea are hoping that Roman doesn't go any time soon as if you look at the club accounts they owe him almost £1 billion.

Ludicrous isn't it.

If there is one team that should be hit by FFP its Chelsea.

That £1bil was converted to equity quite a while ago....same with Man City's owners I think.

The problem with FFP is that it took four or five years to implement. The Premier League has it's own separate FFP rules, no idea what will happen with those.

What does that mean?

All I've seen is a note in their accounts that says that they have a net debt of £958 million in their holding company.

Go back to 2004. Abramovich wants to inject money into the club to buy players and the like. He does that by loaning the money to the club. So, on the balance sheet the club owe him that money. What has now happened (and I think this was 6 or 7 years ago), is that he has agreed to convert that loan into shares in the club.

The end result of all this is that he owns the club anyway. Nothing has changed. All he has done is written the debt off, in effect (in that he owns the business anyway).

So, you are incorrect in thinking if he sold he would be owed all that money. If he sold he would get whatever he sells the business for - be that £1 or £1bn.

Alot of clubs do this. At least Abramovich had the cash, not like some clubs whose owner loan into the club with a loan of their own (Glaziers for example).

[ascayman]

London424 said:

What does that mean?

It means they found a way of cheating the system. Again.

[jcremonini]

ascayman said:

London424 said:

What does that mean?

It means they found a way of cheating the system. Again.

No - it means they know how to run a business in a way which, back then, was perfectly within the rules. It's not cheating. Fair enough, today it would not be allowed, but that is only because of FFP.

Whatever club you support will do the same thing if it has a wealthy owner. Pretty much every U.S baseball and basketball team is run the same way.

Go back to Liverpool in the 60s with the Moores family and they did almost the same thing - but back then it was simply a case of writing cheques.

EDIT: All Abramovich was guilty of was having more money than everyone else. If you believe owners shouldn't be able to give money to clubs then, effectively, you are saying the game should not exist (because that's how it started). Most amateur clubs are run through donations which are just written off.

Edited by jcremonini on Thursday 8th May 11:47

[ascayman]

jcremonini said:

No - it means they know how to run a business in a way which, back then, was perfectly within the rules. It's not cheating. Fair enough, today it would not be allowed, but that is only because of FFP.

Firstly Chelsea is not ran as a business and never has been, what sort of business posts losses of £50m + year in year out?

Secondly of course its cheating FFP was bought in precisely because of Chelsea to stop it happening again.

[jcremonini]

ascayman said:

jcremonini said:

No - it means they know how to run a business in a way which, back then, was perfectly within the rules. It's not cheating. Fair enough, today it would not be allowed, but that is only because of FFP.

Firstly Chelsea is not ran as a business and never has been, what sort of business posts losses of £50m + year in year out?

Secondly of course its cheating FFP was bought in precisely because of Chelsea to stop it happening again.

Chelsea is a business. If you want to know what sorts of business run at a loss every year look at any internet startup or Blackberry. Most business start with an injection of cash or grow with an injection.

It is not cheating. Again, this is all years ago and was within the rules then. As I said, if you want to wind the clock back further you will find all clubs have done it at some point. What team do you support ? - do some research.

Just because Chelsea have a richer owner than most others does not mean they are doing something others are not - it just means they have the means to do it bigger. It's called business.

As far as FFP being brought in only because of Chelsea you might want to do some research on that too.

[ascayman]

I don't even know where to start, think ill stick by my old mantra 'you cant talk football with a Chelsea fan'

[London424]

jcremonini said:

London424 said:

Cheib said:

ascayman said:

London424 said:

Chelsea are hoping that Roman doesn't go any time soon as if you look at the club accounts they owe him almost £1 billion.

Ludicrous isn't it.

If there is one team that should be hit by FFP its Chelsea.

That £1bil was converted to equity quite a while ago....same with Man City's owners I think.

The problem with FFP is that it took four or five years to implement. The Premier League has it's own separate FFP rules, no idea what will happen with those.

What does that mean?

All I've seen is a note in their accounts that says that they have a net debt of £958 million in their holding company.

Go back to 2004. Abramovich wants to inject money into the club to buy players and the like. He does that by loaning the money to the club. So, on the balance sheet the club owe him that money. What has now happened (and I think this was 6 or 7 years ago), is that he has agreed to convert that loan into shares in the club.

The end result of all this is that he owns the club anyway. Nothing has changed. All he has done is written the debt off, in effect (in that he owns the business anyway).

So, you are incorrect in thinking if he sold he would be owed all that money. If he sold he would get whatever he sells the business for - be that £1 or £1bn.

Alot of clubs do this. At least Abramovich had the cash, not like some clubs whose owner loan into the club with a loan of their own (Glaziers for example).

I think I follow. So, assuming Roman wants to sell up, what happens to the almost £1 billion?

[jcremonini]

ascayman said:

I don't even know where to start, think ill stick by my old mantra 'you cant talk football with a Chelsea fan'

We are not talking football though, are we ?

Please tell me you are not a Spud . Two words "Robert Maxwell". Do some research. Laughable that a Spud fan would be shouting about FFP when their history of bent practice is so well documented.

[sleep envy]

London424 said:

I think I follow. So, assuming Roman wants to sell up, what happens to the almost £1 billion?

Depends what he sells the club and assets for.

> £1bn = profit, < £1bn = loss.

[sleep envy]

jcremonini said:

ascayman said:

I don't even know where to start, think ill stick by my old mantra 'you cant talk football with a Chelsea fan'

We are not talking football though, are we ?

Please tell me you are not a Spud . Two words "Robert Maxwell". Do some research. Laughable that a Spud fan would be shouting about FFP when their history of bent practice is so well documented.

Ironically, owned by uncle 'cash under the mattress' Joe too.

[London424]

sleep envy said:

London424 said:

I think I follow. So, assuming Roman wants to sell up, what happens to the almost £1 billion?

Depends what he sells the club and assets for.

> £1bn = profit, < £1bn = loss.

So the biggest club in England (Utd) were bought for 800 Million. So basically Roman is taking a rinsing when it comes time to sell or can he reclaim any of it from the club?

[jcremonini]

London424 said:

jcremonini said:

London424 said:

Cheib said:

ascayman said:

London424 said:

Chelsea are hoping that Roman doesn't go any time soon as if you look at the club accounts they owe him almost £1 billion.

Ludicrous isn't it.

If there is one team that should be hit by FFP its Chelsea.

That £1bil was converted to equity quite a while ago....same with Man City's owners I think.

The problem with FFP is that it took four or five years to implement. The Premier League has it's own separate FFP rules, no idea what will happen with those.

What does that mean?

All I've seen is a note in their accounts that says that they have a net debt of £958 million in their holding company.

Go back to 2004. Abramovich wants to inject money into the club to buy players and the like. He does that by loaning the money to the club. So, on the balance sheet the club owe him that money. What has now happened (and I think this was 6 or 7 years ago), is that he has agreed to convert that loan into shares in the club.

The end result of all this is that he owns the club anyway. Nothing has changed. All he has done is written the debt off, in effect (in that he owns the business anyway).

So, you are incorrect in thinking if he sold he would be owed all that money. If he sold he would get whatever he sells the business for - be that £1 or £1bn.

Alot of clubs do this. At least Abramovich had the cash, not like some clubs whose owner loan into the club with a loan of their own (Glaziers for example).

I think I follow. So, assuming Roman wants to sell up, what happens to the almost £1 billion?

He swapped the loan for equity (ie shares). If he sells then he gets whatever his share of the club is (out of whatever he sells it for). The £1bn of loans does not exist (well , it does in the form of equity).

The guy has so much money that I suspect if he did sell it, it would be for £1.

[sleep envy]

London424 said:

So the biggest club in England (Utd) were bought for 800 Million. So basically Roman is taking a rinsing when it comes time to sell or can he reclaim any of it from the club?

Depends entirely on the deal he strikes *if* he were to sell. He could asset strip or sell it as a going concern plus other options.

Besides, basing the value of one club on another club's valuation over 11 years ago isn't terribly accurate, unless you know the true value of the club & assets??