In a generous gesture of support, Roman Abramovich has made Chelsea virtually debt free. In the previous financial year, he reduced the debt from a peak £760m. In the year to 30 June he converted the £340m of interest free loans owed by the club to him into equity. The move has reduced the club’s debt almost to nil and puts it in a strong position ahead of proposed rules seeking to prevent European football clubs from taking on unsustainable levels of debt.
In a generous gesture of support, Roman Abramovich has made Chelsea virtually debt free. In the previous financial year, he reduced the debt from a peak £760m. In the year to 30 June he converted the £340m of interest free loans owed by the club to him into equity. The move has reduced the club’s debt almost to nil and puts it in a strong position ahead of proposed rules seeking to prevent European football clubs from taking on unsustainable levels of debt. Losses for the year to June fell from £66m to £44m and would have been lower but for a payment of £12.6m, to former manager Luiz Felipe Scolari and three staff following his sacking during last season. Revenue fell slightly from £231.1m to £204.6m. Net capital expenditure was reduced from £85.1m to £4.2m following the completion of major capital projects such as the club’s training centre at Cobham. The debt conversion is consistent with a long-term plan for ‘Phase II’ of the Abramovich era aimed at reining in Chelsea’s spending on player transfers and wage bills as the club seeks to break even financially. One doubt is whether it can be financially viable at the level at which it wishes to compete with its present ground, but a satisfactory alternative has never been found and would involve very substantial capital expenditure.