Record debt for rampant Chelsea

FORGET their 10-point lead atop the Premiership and the race to an unprecedented quadruple, Chelsea are about to scoop the first honour of the Roman Abramovich era - record losses.

Abramovich may have some of the deepest pockets in the world, let alone English football, but the London club is set to reveal figures for the Russian oil magnate's first season as their owner which will easily surpass the previous record figures suffered by Leeds United.

It was less than 18 months ago that then Premiership side Leeds revealed pre-tax losses of £49.5 million (€71.5m) for the 2002-2003 season, the highest figure in British football history.

Now Chelsea are set to outdo the Yorkshiremen less than a week after their former chairman Ken Bates rescued their old rivals from administration, topping the Leeds deficit by possibly as much as £10m.

Whereas Leeds has disintegrated as a club both on and off the pitch following the financial meltdown, Chelsea's losses will scarcely raise an eyebrow on the barely furrowed Abramovich forehead. This, after all, is a man who receives $1 billion a year in share dividends alone from his Sibneft oil company, of which he is believed to own around 40%.

With that kind of clout, and a first English title in half a century within reach, why would Chelsea's owner or its supporters worry? Someone always has to, of course, which is where the club's chief executive Peter Kenyon comes in.

When Kenyon took the reins at Stamford Bridge a year ago next week after an enforced period of gardening leave following his controversial departure from the same role at Manchester United, he immediately stated his aim was to make Chelsea a self-sufficient football club by 2010.

He also claimed Abramovich shared that vision.

"We need to recognise that anybody who puts £250m as an initial investment into a venture ultimately needs to see that, that business is run on a financial sound footing," Kenyon said then. "It's important the culture of Chelsea is one in which we're going to run this as a proper business."

An accountant by trade Kenyon will not have liked what he has seen in Chelsea's books for 2003/04. Those books are set to be revealed on Monday, at Chelsea's behest, for though they are a private company following Abramovich's takeover of parent company Chelsea Village plc, the club is pre-empting any inevitable leaks. Which means that the world is about to get a peek at the true price of assembling the most expensive side in footballing history.

When Abramovich took the helm in the summer of 2003 with a £140m buyout, he handed then manager Claudio Ranieri another £110m in transfer funds.

The club broke its transfer record five times in six weeks as a result and Chelsea's wage bill ballooned to around £75m while ongoing transfer fee repayments, known as player amortisation, jumped to £40m.

All of which makes the expected announcement on Monday of losses between £50m and £60m look like a great example of damage control.

And whereas other clubs have had to slam on the brakes as far as transfers are concerned, Chelsea are in the enviable position of being able to carry on spending, not only because Abramovich is prepared to spend more of his fortune on his pet project but also due to Kenyon's business plan.

So while the Russian continues to plough money into the club, Kenyon has been busy bringing other forms of income to the coffers.

The players helped too, collecting more than £40m for finishing second in the league and reaching the Champions League semi-final last season but the club also boasted record merchandising profits, helping the club to an increased turnover of around £140m.

Kenyon's bid for self-sufficiency in the next five years also received a significant boost this week by agreeing a 10-year kit deal with Adidas which will bring in £100m. That is something the likes of former Leeds chairman Peter Ridsdale and many others can only dream of.

Unlike such dreamers who sailed too close the sun, Kenyon also possesses a wealth of experience in brand building and emerging markets that is already underwriting the spending spree.

Having sold the Manchester United brand to previously untapped markets he's now doing the same job for his current employers. The Adidas kit deal Kenyon brokered last week also replicates his success at luring sportswear giant Nike to the United fold in 2000 with Umbro once again being the manufacturer to lose out to a more global brand.

Similar efforts are being made by the chief executive on the sponsorship front. Five years ago Kenyon negotiated a £30m deal for United with the world's largest telecom company Vodafone. This year, as current sponsors Emirates fly off to north London and a stadium-naming deal with Arsenal, Kenyon is lining up electronics giant Siemens or possibly the German company's mobile phones rival Orange in another blockbuster contract.

None of which will nudge United from their perch as the biggest and best supported club in the world, a point grasped by Alex Ferguson in the uneasy aftermath of Carling Cup semi-final defeat to the Blues at Old Trafford.

The result on Wednesday night, though, does represent another shift in balance of power in English football. It is Kenyon's job to make sure a southerly trend continues and that his particular corner of West London becomes the permanent seat of power.

Kenyon this week reiterated his belief that winning the Premiership this season alone is not enough. He knows financial success can only follow on from consistent achievement over many years. That is why Abramovich will continue to spend big to realise his sporting ambitions and Kenyon will work even harder to fulfil his financial targets.

Monday's announcement of the 2003-04 figures may reveal dramatic losses but the long-term forecast is decidedly upward. And a quadruple this season will make both men's goals considerably easier to attain.