December 30 – Roman Abramovich (pictured) has effectively written off the club’s £340 million debts to help the Premier League club comply with future UEFA financial controls.
The Blues have eased the threat from so-called ‘”financial fair play” rules after the Russian billionaire wiped out the interest-free loans he had given the club since taking over in 2003.
New chief executive Ron Gourlay insists the club are now on track to become self-sufficient and survive without the help of Abramovich after announcing much-reduced losses.
The Russian billionaire has invested hundreds of millions of pounds into Chelsea since his takeover six years ago, delivering two English titles and two FA Cups.
Chelsea is yet to achieve its target of being self-sufficient with the club announcing that it lost £44.4 million, amounting to almost a fifth of its turnover in the financial year ending June 30, 2009.
Abramovich, 43, last year wrote off a similar level of debt, but has now turned the rest of what Chelsea him owe into shares.
As the sole shareholder, it effectively means he has absorbed the debt.
Chelsea is acting on debt to ensure it will not be in breach of UEFA debt controls, with clubs set to be banned from the Champions League after 2012 unless they break even on football-related business.
UEFA President Michel Platini has pushed a ‘financial fair play’ agenda after voicing concerned by the levels of debt in English football.
European football’s governing body still believe clubs should limit spending to a percentage of their income – Chelsea currently spend more – but the elimination of debt reduces the threat of any sanctions.
Clubs could be barred from the Champions League and Europa League if they do not satisfy UEFA, with former Belgian Prime Minister Jean-Luc Dehaene heading a panel to consider their rules.
Chelsea chairman Bruce Buck: “The club’s debt load has been reduced almost to nil in order to provide more long-term stability for the club.
“The reduction will also enable the club to comply with any regulations on debt levels which are being discussed by the football community.”
While losses were reduced for a fourth straight financial year – it was £65.7 million last year – turnover was also down from £213.1 million to £206.4 million.
Chelsea also revealed that it had to pay £12.6 million in compensation to Luiz Felipe Scolari (pictured) and three members of the coaching staff, who were sacked in February after less than eight months in their jobs.
It cost Chelsea £23.1 million in the previous financial year to compensate former managers Jose Mourinho and Avram Grant along with their coaches.
Gourlay said: ”It is still our aim to be self-sufficient and we will achieve this by increasing our revenues as we continue to leverage off our brand.
“We are reducing our costs by controlling expenses, including salaries and wages.”