Chelsea set to announce big losses

Chelsea were today set to confirm a huge financial loss for the second year running.

The Barclays Premiership champions are runaway leaders again and seem sure to defend their title with ease – but that success is coming at a price, chairman Bruce Buck warning last night that the Blues are likely to incur a pre-tax loss even bigger than last year’s £88m (€128.3m) deficit.

Owner Roman Abramovich’s vast personal fortune means the debt is far from a problem for Chelsea – but the club still intend to become a profitable operation.

They are following a business plan initiated after Abramovich’s arrival in 2003 by Buck, chief executive Peter Kenyon and managing director Paul Smith - and they are confident they are still on course.

Buck told BBC Radio Five Live: “We sat down and said we wanted this club to be profitable. Peter and Paul were directed to put together a business plan that would make us profitable.

“Having said that, Roman has a reasonably long-term view – and the business plan that was put together was a five-year business plan.

“We are doing a lot of things to make the club more efficient and towards profit-making in five years’ time. Having said that, we announced a significant loss last year and we are going to announce a significant loss this time too.

“But that loss doesn’t take into account our Samsung relationship or our adidas contract, so we think we are moving in the right direction.”

Chelsea have spent £240m (€350m) on players since Abramovich’s takeover, and last year’s Premiership title was their first for 50 years.

Buck added there are certain “exceptional” expenses which have increased the debt but which will end up paying for themselves and more besides.

“From an operating loss perspective – which was £13m (€19m) last year – that will go down. But the total loss will go up, because there were a lot of exceptional charges this year.

“We paid Umbro £25m (€36.4m) to release ourselves from that contract. That enables us to enter a contract next season which over the next five to 10 years will provide a bonus for Chelsea.”

Buck insisted, however, that despite Abramovich’s millions Chelsea are cautious with their money – from transfer fees to stationery.

He added: “We watch every penny. If the guy who sells us pencils is charging too much and he thinks he can because it is Roman and Chelsea then we find another supplier of pencils.

“In the transfer market there is one price for Chelsea and another price for everyone else – but we are not afraid of walking away from a deal.

“There are many deals we have walked away from just because of the pricing. But we have probably put £100m (€146m) into transfer fees in England, and that money gets churned many times – which is a benefit for football.”