Record income last season.

[Clan]

http://www.thisislondon.co.uk/sport/football/articles/16213951?source=Evening

An interesting article.
Chelsea's Russian Revolution brought huge benefits with the club collecting more than £40m for finishing second in the league and reaching the Champions League semi-final as well as boasting record merchandising profits, giving the club an increased turnover of around £140m

Makes for interesting reading.
I would have to think that our massive spending on players will not be the same again, given that we now have the team to achieve success.The addition of a player here and there will no doubt still occur from time to time though.

Sustaining that amount of income, with the likelyhood of actually increasing it, is also far more likely than not as well.
Coupled with the new kit deal, which is far better than Uniteds as we retain the merchandising rights, will no doubt make this seasons and others to come, even better record breaking ones.

Here's another version.
http://www.thisislondon.co.uk/sport/football/articles/16213918?source=Evening

[The Rage]

Hold you horses Clan: http://www.chelseafc.com/article.asp?hlid=252571&m=1&y=2005&nav=news&sub=latest+news

[usscouse]

If you build it, they will come..!

[lobomojo]

Many talk like RA is spending crazy, but really it is a shrewd and visionary long term investment.

Right now ManUre is worth about 800 million quid +; so for a 140 million or so buy and start up and another 200 million or so in player costs to play catch up, 5-10 years of big footballling success with Keynon's marketing savey, and a possible legal forced change in individual clubs getting to own all or part of their tv rights to really benifit the big clubs, with a break even point in 4-5 years, after ten years he has a team worth probably 1.5 billion + by then (yes manu will be worth more then than now, and perhaps more than Chelsea still also).

Not to mention the perks like the real estate, the ability to move wealth from russia to england, tying him into the fabric of London society and power, making him high profile enough in the west to keep Russia thinking twice about going after any of his russian assets (though he was ahead of that with betting on Putin early) and just the whole coolness in owning the world's best effing football team.

Regardless, of the veracity/ethics of the claims/methods on how some/all his money was initially accrued, no doubt the man is as much a financial/business genius as JM is a football manager.

[yasik19]

If you build it, they will come..!


great movie. it's 2 bad Kevin Costner can't act :D

[nicephoras]

Well, for anyone who's been paying attention this can't be much of a surprise. We've been one of the top 5 EPL teams for the past decade, and being London with a large stadium, we've made money. In fact, we've made a lot. The problem was the debt. We had a lot of that too.
Now, the debt is gone. Which means that even if Roman leaves tomorrow, we'll be able to more than afford our payroll as well as more purchases. If Roman left now, we'd be in the same situation as Arsenal, except we wouldn't have massive stadium financing over our heads. If Roman leaves, we'll be fine. Which is too bad for the rest of the EPL. :cool:

[OsgoodWasGod]

There's more here:

http://news.bbc.co.uk/1/hi/business/4219397.stm

...and 'record income' has become 'biggest ever loss'.

What a ride this season is!

[nicephoras]

There's more here:

http://news.bbc.co.uk/1/hi/business/4219397.stm

...and 'record income' has become 'biggest ever loss'.

What a ride this season is!

Well, hard not to lose money when you build a new state of the art training facility and buy over 10 players. ;) I don't think we'll have nearly the same expenses next year.

[Clan]

Well, hard not to lose money when you build a new state of the art training facility and buy over 10 players. ;) I don't think we'll have nearly the same expenses next year.

Indeed.
Seeing as the expenses are going to certainly fall, dramatically, it only bodes well for the club in the long term.

[Clan]

http://www.dailymail.co.uk/pages/live/articles/sport/sport.html?in_article_id=335906&in_page_id=1771&in_a_source=&ct=5

[BridgeMonkee]

Well, hard not to lose money when you build a new state of the art training facility and buy over 10 players. ;) I don't think we'll have nearly the same expenses next year.

Going forward we have a lower wage bill than Man U and well better players than they have :)

[jonam]

Which means that even if Roman leaves tomorrow, we'll be able to more than afford our payroll as well as more purchases.


???

IF it is true that your payroll is already above 100 Mio GBP (1 pound equals 1,45 Euro), I can't see how you guys are going to come up with the revenues needed.

That would be a much higher wage bill than ManU without the revenues channels and huge fanbase worldwide the world's No.1 has.

[nicephoras]

???

IF it is true that your payroll is already above 100 Mio GBP (1 pound equals 1,45 Euro), I can't see how you guys are going to come up with the revenues needed.

That would be a much higher wage bill than ManU without the revenues channels and huge fanbase worldwide the world's No.1 has.

We already make more than our payroll. That, and last year's figures are a little deceptive, as our wage bill was bloated thanks to holdovers (thanks Mr. Bogarde!) and waaaay too many purchases. We won't buy players at this rate anymore.
Considering we spent over 100M on new players alone, running a 60M loss means we made more than enough to pay for the salary. We've always been one of the highest revenue clubs in the world; being in London does that.

[jonam]

We already make more than our payroll. That, and last year's figures are a little deceptive, as our wage bill was bloated thanks to holdovers (thanks Mr. Bogarde!) and waaaay too many purchases. We won't buy players at this rate anymore.
Considering we spent over 100M on new players alone, running a 60M loss means we made more than enough to pay for the salary. We've always been one of the highest revenue clubs in the world; being in London does that.


Just to make that clear: If you spend 100 Mio for new players in one season and make a loss of 60 Mio it is not that you have earned 40 Mio more than you spend leaving transfer fees aside. In your annual annual balance sheet the transfer fees aren't taken into account, only depreciations (transfer fees divided by contract years). Means, if we assume an average of four year contracts, only 25 Mio per year are balance-active, leaving at least 35 Mio non-transfer-related loss -> Ebitda.

And being in London doesn't means that Chelsea can make money out of nothing. Though ticket prices are +50% compared to ManUtd but your stadium isn't the biggest at all, plus your global brand is nothing compared to ManUtd.


My conclusion: with RA you're doing fine, without him you won't be able to catch up with the big guns or hold the pace.

Btw, I can't imagine that your payroll is already at 115 Mio GBP. That is too much IMHO. Chelsea's official balance sheets should be out sometime in February. So let's wait and see.

[nicephoras]

Just to make that clear: If you spend 100 Mio for new players in one season and make a loss of 60 Mio it is not that you have earned 40 Mio more than you spend leaving transfer fees aside. In your annual annual balance sheet the transfer fees aren't taken into account, only depreciations (transfer fees divided by contract years). Means, if we assume an average of four year contracts, only 25 Mio per year are balance-active, leaving at least 35 Mio non-transfer-related loss -> Ebitda.

And being in London doesn't means that Chelsea can make money out of nothing. Though ticket prices are +50% compared to ManUtd but your stadium isn't the biggest at all, plus your global brand is nothing compared to ManUtd.


My conclusion: with RA you're doing fine, without him you won't be able to catch up with the big guns or hold the pace.

Btw, I can't imagine that your payroll is already at 115 Mio GBP. That is too much IMHO. Chelsea's official balance sheets should be out sometime in February. So let's wait and see.

Oh God, lets not get dragged into a discussion of Ebitda. I do that enough at work.
As for depreciation - you're right. But there are also significant upfront fees to be paid for contracts. On top of that we had other one time expenses - we redid the pitch at the Bridge, as I understand it, built a new training facility, etc. Then there are expenses such as breaking the contract with Umbro.
As for income - I believe we were one of the top 10 teams in terms of revenue last year. Before Kenyon's branding expertise was brought in, before we were big enough to take a tour of the US. Will we catch up to ManU in one season? No. Can we eventually? Yes. If Roman leaves would things be worse? Yes. Will they be Leeds like catastrophic? No.

[jonam]

Oh God, lets not get dragged into a discussion of Ebitda. I do that enough at work.
As for depreciation - you're right. But there are also significant upfront fees to be paid for contracts. On top of that we had other one time expenses - we redid the pitch at the Bridge, as I understand it, built a new training facility, etc. Then there are expenses such as breaking the contract with Umbro.
As for income - I believe we were one of the top 10 teams in terms of revenue last year. Before Kenyon's branding expertise was brought in, before we were big enough to take a tour of the US. Will we catch up to ManU in one season? No. Can we eventually? Yes.


A new pitch costs between 100.000 and 400.000 Euro incl. transportation etc. (400k is the best out there, to be found at Bernabeu etc.). The Umbro deal wasn't effective in 2004 but in 2005 as I understand it.

Whatever, we'll see what the balance sheet tells us and much more important, how the future will look like.


If Roman leaves would things be worse? Yes. Will they be Leeds like catastrophic? No.


Agree.

[nicephoras]

Whatever, we'll see what the balance sheet tells us and much more important, how the future will look like.

I have a feeling you know a thing or two about incorrect public estimates of debt being a fan of Dortmund, no? ;)

[Andy Bennett]

One thing that occurred to me was that maybe RA is taking a hit on his pre-tax P&L in one year to offset profits elsewhere. I suppose it would depend on whether he is making money from share sales, etc, which are allowable. I seem to remember they're called 'corporate umbrella' rules from when I had a company in Delaware. Is that still the same?

[Miles Brasher]

One thing that occurred to me was that maybe RA is taking a hit on his pre-tax P&L in one year to offset profits elsewhere. I suppose it would depend on whether he is making money from share sales, etc, which are allowable. I seem to remember they're called 'corporate umbrella' rules from when I had a company in Delaware. Is that still the same?

RA's income is such that he can afford to 'play around' with a football club. Let's face it, this bloke has 3 yachts at £78 mill each. I'm sure that he has plenty of accountants to make the best use of his money, but that if he wants to, he can effectively drop £100 mill or so down the drain without it hurting him at all. Chelsea's buying policy hasn't really been that sensible since Hullitt was manager when he was buying established stars on high salaries etc. Ken Bates looked liked the fairy goodmother, albeit with a dodgey beard and a loud mouth, but ended up with the club in a possibly worse situation. Now RA has come in and saved chelsea again and yet now Chelsea has a group of new players that are worth 1/2 what they paid for them, with a huge wage bill of £115mill( :eek: ) (approx £40 mill. more than UTD) which despite various players leaving, isn't gonna improve due to various high profile players joining in the summer and a loan for £115 mill from RA that will need to be repaid. That's £20mill a years for nearly 5.5 years Kenyon says his plan is make Chelsea self sufficient by 2010, which if he does then he's definitely worth his wages, but he needs to go farther and increase their income to be well above the costs to allow for transfers. Personally I just can't see Chelsea becoming a bigger name worldwide than Manu in 5 years which is where they will need to be,but good luck to you!!

[prk166]

Many talk like RA is spending crazy, but really it is a shrewd and visionary long term investment.


A shrewd investment? I think that's highly unlikely. He's spent $650m+ of his own money in the first year alone. To simply make an 8% return on that investment would take clearing a 300 million+ dollars on top of the 650. And at that its 8% very plain and simple without factoring in inflation. So it's going to have to be more than that to account for a couple percent inflation each year. So if in 2010 the club is valued at a price where he can sell it and get $1/2 billion or so in his pocket, he made the kind of returns that would be good. But shrewd? If you want to see shrewd investments, check out Warren Buffet in his early years. Cuz 8% is the kind of return you'd expect to get sinking your money into a mix of bonds and stocks (heavy on the stocks). That's nice but not shrewd.