On Zola and a new contract: The Italian's current deal expires at the end of the season but Blues chief executive Trevor Birch has now revealed that the club are to begin negotiations about an extension. "We'll be talking to Franco and I believe both parties would be keen to reach an agreement, given the way he's been playing this season," Birch told the Evening Standard. On the financial situation at CFC: Birch is also delighted with the news that Chelsea will not have to sell any of their international stars when the transfer window reopens next month. He added: "The important thing is that we're not in a position where we have to sell our best players. Claudio says he's happy with the squad and the fantastic team spirit at the moment." Birch noted that the club's financial situation was eased this week by a £7m interest payment on loans, and with Chelsea's assets currently valued at around the £250m mark, there is no urgent need to make a significant reduction on the £90m debt at this moment in time. In fact, Birch is continuing to press ahead with plans for a new training ground and said: "That, and an academy, are my top priorities. We badly need a modern training ground and we're in negotiations about a new site. I'm very hopeful of an early, favourable decision."
Ends not meeting?? There are two problems with this. The first concerns the asset figure given in the latest accounts of £224m. As the bulk of the assets are commercial buildings, the valuation would have taken into account projected revenue streams and profitability. The value of a successful hotel is very different to that of a failing hotel, and as all the customer projections to date have proved wildly over-optimistic it follows that the real value of the assets is commensureately lower. The second problem is what do you do with your assets if you run out of cash? Remember that with the eurobond and deferred payment on the West Stand there is already over £100m secured against the assets making any further borrowing difficult and expensive. You have no choice other than to realise, ie sell. What price one of the failing businesses enmeshed in the Village melange as a stand alone venture? Most likely nothing at all. A promising 24 year old striking prospect on the other hand might fetch as much as £20m in one hit. The reality is that the only tradeable assets are the players so watch the asset stripping begin. CAG report on current assets at Chelsea Village.