Chelsea announce record pre-tax loss
For the second successive season, the Premiership champions have far outstripped the record losses of any other British club.
Chelsea posted a loss of £87.8m (€128.21m) on for the financial year 2003-04, but the latest figures for the year ending June 30, 2005 reveal the club have now lost £227.8m (€332.65m) in the first two years of Roman Abramovich’s ownership.
But Kenyon remains positive that the club are in much better health than the figures suggest.
“These figures reflect the continuing restructuring which we began in 2003,” said Kenyon.
“The overall loss is, in the main, down to some exceptional items that were necessary in order to help us achieve our strategic business aim of break-even by 2009-10.
“In simple terms we have taken some pain now for long-term gain.”
Chelsea paid £25.5m (€37.24m) to break off their agreement with Umbro earlier than expected, and they also paid another £13.8m (€20.15m) to write off the potential transfer value of sacked striker Adrian Mutu after the Romanian tested positive for cocaine.
Those figures inflated the losses, as did the £5m (€7.3m) paid to Tottenham as part of the compensation package for tempting Frank Arnesen to Stamford Bridge to run the youth set-up.
Chelsea were also forced to write off paper value to the tune of £9m (€13.14m) after Juan Sebastian Veron insisted he completed his contract on loan with Inter Milan.
The club will post the results with Companies House on Monday and another indication of the scale of the loss will see Chelsea record an operating loss on day-to-day business of £6.3m (€9.2m) - compared to the £46.3m (€67.6m) profit announced by Manchester United this week.
Chelsea’s transfer spending also outstripped the rest of the country with £101m (€147.5m) spent on recruiting such players as Didier Drogba and Ricardo Carvalho.
However, this figure was greatly reduced from the £175m (€255.62m) spent on new players in Abramovich’s first year at the helm.
Their massive wage bill totals £108.9m (€159m) but even that figure was down by some £6.6m (€9.64m) on the previous year.
Turnover dropped from £152.1m (€222.19m) to £146.6m (€214m) but Chelsea point to the sale of Chelsea Village Travel as the main reason for the reduction.
New income from the club’s sponsorship deal with Samsung will show up in next year’s account and the £12m (€17.52m) annual contract with adidas will be included a year after that.
Kenyon added: “With continued success on the field and the resulting growth of our revenues, we are confident of achieving our targets.”
Assistant coach Steve Clarke insisted he was unconcerned by the club’s financial woes.
“It’s not something I’m particularly concerned about. My job is to coach players and work with the squad we’ve got,” he said.
“As a coach, if you can get the best players and bring them in for me and Jose [Mourinho] and the rest of the coaching staff to work with, then we are happy.”
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