This is a long post and yes it’s about Chelsea so apologies but as so many are questioning how Chelsea have avoided charges I thought it might add some meat to the debating bone
Far too much attention is paid to the statutory accounts when people are trying to work out what the clubs P& S Submissions will be.
Of course they point us in a direction but as was highlighted in the Everton charge there so many deductions , concessions and like the majority only know what is put in the public domain but being a Chelsea fan with a background in finance I will put a couple of bits and pieces which might give a pointer as to why we don’t appear ( yet ) to be facing any charges.
Including the averaged 19/20& 20/21 and 21/22 years our income was £1.278 billion. For reference Evertons was something like £558million. Chelsea’s losses were at £264 million or around 21% of turnover again as a reference Evertons at £237 million around were close to 42% But of course that’s not the measure it’s the £105 million that is key
So just from the accounts Chelsea appeared to have a bigger problem than Everton. In effect £159 million had to be discounted and these are just my guesses how that sum was “ accounted “away
1) Amortisation.
It’s a word that most had never heard of prior to FFP.
In Chelsea’s accounts there is roughly £150 million a season . But when a player goes out on loan for P&S the sum amortised is discounted and follows the player . As we all know we had a chunk of players out on loan so factor in just one Lukaku. Signed on a 5 year deal his £100 million fee means £20 million pa. But he is out on loan so his £20 m is discontinued for P&S.My guess was over the period that sum was in excess of £50 million
2) Impairment
Normally when a club impairs a players value( the club take a view each year as to the value of a player for who they paid a fee and in effect says in our books he is worth say £20 million but we now think he is worth £10 million so that write off or impair £10 million in the accounts which shows up as an immediate loss) Its an accounting adjustment that unless there are “ exceptional circumstances “ have to just take on the chin “ but by impairing sums this accounting year you reduce the sums you need to show in subsequent years
Chelsea rarely impair players values save the odd million or two but in 20/21 and 21/22 Chelsea claimed impairment of £93 million. I have heard two explanations 1) Part COVID fall out and 2) Player values re assessed as part of takeover
As we know Everton claimed part of the sum they inpaired in their COVID losses. It’s a guess but I would imagine that a portion of the £93 million would be discounted
4) Standard Deductions
Community, Youth, Ladies Football and Depreciation of Assets
Other than depreciation which was £20 million the others aren’t immediately quantifiable but I have seen estimates of around £10 million pa or circa £30 million over a monitoring period so potentially another £50 million there
5) Exceptional Items
When FFP was first introduced some suggested that the cost of sacking a manager fell into this category. Not so sure but in Chelsea’s accounts over the monitoring period Chelsea accounted for £42 million in respect of a historic legal matter and my belief is that this matter pre dates FFP so its highly possible that all this sum has been discounted
As we know Chelsea had to operate under sanctions whilst I am far from sure of the numbers but I know that have been calculated in terms of provable income lost . For instance the club could sell tickets for quite a few games and when they did the proceeds had to be donated to charity. Then you had 3 suspended their £40 million pa deal for 3 months they weren’t alone, . I don’t know for sure but I would imagine that the club would be claiming some allowance here.
There is nothing new in regards to the info about deductions that we didn't already know and as a result i remain utterly convinced your are massively in breach. I can think that the reasons you have not been charged is because their is an element of fraud from the previous regime which on Chelsea's own admission on a prima facia basis seems obvious, and this complication is the reason why the charges have not yet been made as they are part of a much wider investigation.
