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Chelsea in the red

Thursday, January 02, 2014

LONDON - Chelsea posted annual losses of more than $F151 million but the English Premier League club remain confident of complying with UEFA's Financial Fair Play rules.

The club slipped back into the red a year after making a profit for the first time since Russian billionaire owner Roman Abramovich's takeover in 2003.

Chelsea lost STG49 million ($F151 million) in the year to June 30, after making a profit of STG1.4 million ($F4.3 million) in 2011-12.

But UEFA allows unlimited investment on infrastructure and youth development, which Chelsea believes accounted for around STG15 million ($F46 million) in spending in 2012-13.

UEFA is allowing losses of up to 45 million euros ($F115 million) in the first FFP monitoring period — 2011-2013 — without the risk of being barred from European competitions.

"We will meet the stipulations set down by UEFA in their first assessment period," Chelsea chairman Bruce Buck said on Tuesday in a statement giving a partial breakdown of financial results.

"And by our own analysis we are progressing from a commercial viewpoint as well as continuing to add trophies to our collection, which we never lose sight of as our most important goal."

The 2011-12 profit came on the back of generating around STG90 million ($F278 million) from the transfer market and a successful Champions League campaign.

But Chelsea's UEFA income was hit despite winning the Europa League in May because the team was knocked out of the more lucrative Champions League at the group stage.

Although Chelsea posted a record turnover of STG255.8 million ($F792 million) in 2012-13, it only rose by STG100,000 ($F309,841).

But commercial income grew 20 per cent year-on-year to STG79.6 million ($F246 million), and there should be a more significant uplift in 2013-14 when the first year of a STG300 million ($F929 million), 10-year contract extension with kit maker Adidas kicks in.

Chelsea has also advanced beyond the Champions League group stage this season and is third in the Premier League, two points behind leader Arsenal.

"For Chelsea FC to achieve a record level of turnover despite our first group-stage elimination from the Champions League shows we have structured our business and are growing in the correct way for long-term stability," chief executive Ron Gourlay said.