Chelsea primed to supercharge transfer plans, and the finances prove it

For some time the narrative around Chelsea was one of a football club on a slippery slope to financial purgatory given how much they had spent on transfers and how little competitive success had been achieved.

The club are approaching the £1.5bn mark in terms if money spent on transfers under the ownership of the consortium led by Todd Boehly and Clearlake Capital, who acquired the club out of the forced sale of Roman Abramovich in May 2022.

Managerial changes that saw Thomas Tuchel, Graham Potter and Mauricio Pochettino all hold the Stamford Bridge hotseat at some stage aligned themselves with woefully under par performances in the Premier League, with them finishing 12th in 2022/23 before rallying late on to come sixth in 2023/24. That meant no Champions League football for two seasons running, and that is enormously impactful for elite club finances, especially at clubs who have as high transfer spend and amortisation costs as Chelsea do.

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But, through being able to make hefty profits on player sales and sell tangible assets such as hotels to themselves, as well as completing a similar move for the Chelsea Women’s team, at a near £200m sale price, have allowed them to fly under the Premier League’s profit and sustainability rules (PSR) threshold, although they have had to pay a hefty fine for breaching UEFA’s regulations, which don’t allow for clubs to include the profits made from the sale of such assets.

Whenever PSR has been mentioned in recent years it has often seen Chelsea talked about in the same breath. The heavy spending, allied with a lack of Champions League money did contribute to heavy loss-making seasons. In seasons 2021/22 and 2022/23 the club made losses of £121m and £90m, with the latter season including a one-off transaction of £77m for the sale of tangible assets including a hotel at Stamford Bridge.

Clubs are permitted to lose £105m over three years with PSR, with allowable deductions made for depreciation, investment into infrastructure, the women’s team, the youth system and community initiatives.

In terms of allowable deductions, Chelsea’s stood at £38m for 2021/22, £42m for 2022/23, and £53m for 2023/24, according to figures presented by football finance expert Swiss Ramble. Taking into account the allowable deductions against the allowed £35m per year losses, that meant that the club were net PSR negative by £132m for 2021/22 ans 2022/23.

But the sale of Chelsea Women in the 2023/24 accounts saw the club turn a £128m profit, and alongside the £53m in allowable deductions that mean that the actual net PSR position was positive to the tune of £50m at the end of that cycle, putting the club £155m to the good against the permitted £105m.

We have now ticked over into a new financial year for 2025/26, one where the club has already registered a near £100m sum from winning the revamped FIFA Club World Cup this summer.

According to Swiss Ramble, Chelsea could have lost £292m in 2024/25 and still be compliant when it comes to PSR, with the £121m loss from 2021/22 dropping off the assessment period. We’re now in a financial year where the 2022/23 £90m loss drops off, meaning it is the £128m profit at year one, whatever is posted for 2024/25, which won’t be as heavy as the previous two years, with year three being a season with the return of Champions League football that could be worth more than £100m to the club on top of the £100m earned from the Club World Cup. Chelsea now have plenty of breathing space.

They have high amortisation costs that they will want to bring down, the highest in the Premier League at close on £200m, and player trading out of the club will be key to driving that down. But they have some big-ticket players whose amortisation costs decrease significantly year on year, including Enzo Fernandez and Moises Caicedo.

This summer they have added Jamie Gittens, Joao Pedro, Liam Delap, Estevao, Dario Essugo, Mamadou Sarr and Kendry Paez for a combined €243.7m (£211m), with amortisation costs capped at five years now, regardless of contract length, that is a little over £42m per year in amortisation costs.

But they had players with considerable book value leaving the club too, with Joao Felix and Noni Madueke both exiting to Al Nassr and Arsenal, respectively. Madueke, who was signed at a time when Premier League rules permitted amortising deals over longer than five years had a remaining book value of around £19m, with Chelsea recouping £20m more than they paid to claim profit. Felix was a year into a deal and had £33.6m in remaining book value. Chelsea sold for £26m, so made a loss on the deal, but they created some welcome amortisation headroom that, allied with the Madueke sale and other outgoings, allows them to almost absorb the cost of the new additions.

They can do more in the window if they wish and expect further player trading to follow in this window or January in terms of outgoings, but given that they are in a year when they will likely post another profit and be able to cashflow deals thanks to the Club World Cup success, they are primed to be able to financially compete with the very biggest sides moving forward, solidifying their position as a Champions League side. This is now the inflection point of Chelsea under Boehly and Clearlake.