Chelsea reveal shocking £121.3m losses as blame put on ‘Government sanctions’ but revenue increases

Chelsea revealed another significant loss after posting their accounts for the 2021-22 season.
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Chelsea have blamed sanctions on former owner Roman Abramovich for a loss of £121.3million for the year ending June 2022, after disclosing their latest accounts.

Following Russia’s invasion of Ukraine in February 2022, sanctions were placed by the Government on people believed to have ties to president Vladimir Putin, with assets frozen.

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A statement in March 2022 read: “Roman Abramovich is now a designated person and therefore subject to financial sanctions. This means all funds and economic resources belonging to, held or controlled directly or indirectly by this person are required to be frozen immediately.”

Chelsea were issued with a “general licence” by the Government to continue to operate and play games but they were restricted in other areas such as selling tickets and signing new commercial deals. The sanctions ended once a Todd Boehly-led consortium bought the club in May.

Chelsea expect the impact of the sanctions to continue into the coming years. The latest accounts do not include the incredible spending during the last two transfer windows, with an estimated £536m spent.

A club statement said: “Chelsea FC Holdings Limited today announced its annual financial results for the year ended 30 June 2022.

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“The results for the year have been impacted by the sanctions placed on the Club’s previous owner on 10 March 2022. As a result of the sanctions, the Club was required to operate within the limitations of a special licence issued by the UK government. These restrictions were in place until the completion of the Club’s sale on 30 May 2022. During this period, the Club was restricted in a number of areas including, but not limited to, its ability to sell matchday and season tickets, sell merchandise, accept event bookings, as well as sign contracts with players and commercial sponsorship partners, which collectively resulted in extraordinary expenses and loss of revenue.

“Furthermore, some of these limitations are also expected to have an impact on the financials in the following years due to the long-term impact from restrictions on entering into new contractual arrangements. Towards the end of the sanctioned period, the Club was permitted to sell certain matchday tickets, with the Premier League committing to donate all revenue from these sales to charity. The restrictions were lifted following the change in ownership, and all operations have now resumed.

“Despite the restrictions placed on the Club, the turnover figure increased to £481.3 million from £434.9 million the previous year, driven largely by increased matchday and commercial revenue from the return of fans on matchdays. Broadcasting revenue decreased relative to the previous year due to lower UEFA Champions League distributions and the knock-on impact of the COVID-19 pandemic from the 2019/20 season into the 2020/21 financial year. Commercial revenue increased to £177.1 million, as the Club benefited from a net increase in sponsorship revenue from new contracts and existing partner renewals.

“The higher revenue was offset by increased operating expenses, including matchday and non-matchday costs that resulted from resumed operations and increased staff costs. The above contributed to the Group recording a loss before player impairments and one-off expenses of £26.6 million for the year ended 30 June 2022, and an overall net loss of £121.3 million.

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“The Club invested £118.0 million in the playing squad during the 2021/22 financial year, including existing player contract renegotiations. In addition, the Club made a profit on player trading of £123.2 million in the year, including the sales of Tammy Abraham to AS Roma, Marc Guehi to Crystal Palace, Fikayo Tomori to AC Milan, and Kurt Zouma to West Ham.

“Despite the loss in the year and the operating challenges due to the sanctions, the Club continues to comply with UEFA and Premier League financial regulations.”