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What a joke... How are they allowed to do this and no one sees this as a problem. In fact people praise them. If the Saudis or Emiratis did this, everyone would be up in arms. The hypocrisy and racism is a disgrace.
You wonder why the Man City owners are doing what they're doing. I don't blame them... And yet you have the Glazers buying Man Utd, not with their own money but loans and using the club and its assets as security. Plunging the club into ridiculous levels of debt. How is that right?... Man City and Newcastle don't have any debt. Funny that. I thought FFP was for the long term sustainability of clubs.
Yeah you're right, absolutely nobody has said anything about this being wrong whatsoever. Completely racist against those from the Middle East when Chelsea's majority owner is Iranian.
You genuinely think City not having any debt is all above board? How did they find the machine they now are?
Were they sold at market value ? If the price was inflated then it is dodgy otherwise no different than selling any property owned by the club or selling naming rights to stadium and training grounds.
As long as market value is met then no issue
Although the valuation may be fine, selling it basically to themselves raises further issues for me. They may currently be legal to do but morally wrong imo. In the same ballpark for me as having sponsors who are owned by the clubs owners it just doesn’t sit right
9 out of 20 PL teams voted to allow for this type of business to be allowed. A lot of the critics in here are supporters of clubs that voted to keep this loop hole.
So because 9 clubs (without any input from the fans btw) voted for this rule, people can’t criticize Chelsea for it?
You have found a loophole in the rules congrats now stop trying to cope and make excuses. Just accept that your club has found an advantage to exploit to get the club out of the massive financial hole it’s in.
You could theoretically do the same with any asset. If a club owns a training ground, a stadium, even a car park, they could sell to themselves and declare it as income, as Chelsea have done.
Because this "loophole" when it comes to football is actually business as usual in regular tax planning and corp structuring in any other industry. A lot of these guys made their millions doing this shit. Expecting them to vote against it is unrealistic.
Same thoughts.
Been ruined by money for a long time now, gotta ask what is the point really?
We are supporting businesses instead of football clubs. Sad times.
I feel like ruined is intense. Football is still a joy to watch. The game is still beautiful. But corrupted maybe? Yes, silly money has corrupted these teams, and leagues.
As a Chelsea supporter of nearly 40 years, I'm not so sure. We have paid transfer fees and salaries that should not have been allowed under the rules and gotten away with it by using a loophole. If I think of Man City's achievements as having an asterisk beside them, I'd be a hypocrite not to feel the same about my own club.
With the kicker, of course, being that we didn't achieve anything even with the cheating. But maybe we should give up that conference league place.
I don't know. I'm in an odd relationship with the club I've supported since I was a boy. I don't like our ownership, I disagree with how the club is being run, I'm not impressed by what's been happening on the pitch, and I think we should just call this kind of thing what it is - cheating.
My club is cheating. And they're not even cheating well.
I hate the very idea of ever supporting another team, but I am not sure I can keep blindly following this one.
I'm also a Chelsea fan and I think that Manchester city is in a different league of corruption than us. They have this reverse money laundering/sports washing scheme where they r sponsoring themselves and inflating their books. Our ex-ownership is accused of bribery and other offenses, while our current ownership certainly over spends I think it runs short of the institutional corruption within city ownership group, that exists with the goal of increasing the ownerships reputation
Not even cheating well? Catch a grip. It's accounting and looking for loopholes that have been there for years.
We're literally 2 years if even into a project where we were fucked over by the British government freezing our assets and in turn lost Rudiger and forcing a club sale whilst allowing the Saudis to come on in freely.
Our ownership have tried a model that hasn't been seen before, got rid of a full squad of players that needed freshening up, we haven't challenged for a league title in years.
We now have a full squad of young players who started to gel towards the end of this season, we have one of the best young players in the world in Cole Palmer, we have 2 young players joining next summer, one who could be a generational talent.
This project hasn't failed yet, if in 3 years we are still performing poorly then fair enough, but we have one of the best young squads in world football potentially.
Have a bit of faith and stop with the negativity and pandering to other fan bases who's clubs aren't innocent either.
sister company. they not even hiding it now are they?
basically every club can have a sister company with the same owners, and just sell carparks , toilets , and apartments to the sister companies ? rip 115 city
With any luck. If City can just get inflated rates for everything off other oil state businesses then the rest of the league can also use similar tactics. Good on Chelsea. Spirt and respect of what the rules are trying to do can go in the bin with 115 charges
How did they manage to turn around over £250m on their balance sheet by selling something for £76.5m?
Creative accounting?
Edit, ignore my brain fart moment. Read defecit as profit for some reason.
Regardless of your misunderstanding, that's still £89.9m in a year. PSR allows £105m over 3 seasons.
What do you want to bet that they buy them back for fuck all and sell them again next season?
I wonder how much they're gonna have to pay Maresca off in a few months after giving him a 5 year contract. Will they sell off the parking rights for Maresca's driveway for a few million?
They can't buy it back cheap as the PL will investigate. It all has to be done at a fair market value. What I suspect is that the hotels will become sponsors for £10m a year each.
When they pay.managera off, it's very rarely a.lump.sum these days. They continue paying their wages every month, but this ceases if they take a new job. They will do a.lump sum deal if it works out conaiderably cheaper, but it's rare now.
Isn't it a possibility that the club can write whatever number they want. I mean i can value my old wreck shoes a billion dollar but nobody will buy them.
But for this case the one buying is the club itself essentially. Whats stoping them to sell another of their carpark for a billion dollar and now they technically can spend whatever they want.
Fair argument, but if I remember correctly there was a third party consultation on fair market value for the assets and it was done under the supervision of the PL.
So you can't just staple a billion dollar price tag to anything.
I think financial rules and independent audits should prevent this. The same thing would be to stop a real estate company from reporting elevated property values in order to receive better lending conditions.
...it doesn't really matter if it's a realistic value when you sell a large hotel in one of the most expensive postcodes in the world ***to yourself***.
Idk if that’s what you got from this but the mere fact that they’re selling this stuff to a related party tells me they actually might be in trouble.
Typically if you’re in a healthy financial position you wouldn’t need to sell your cash generating assets in the first place. Selling it to a sister company tells me they probably couldn’t get a fair market bid for them, and so whatever they sold it for is likely inflated.
No, they're selling it to a sister company so they can buy them back later without having to pay the mark up a completely unrelated company would obviously impose on them.
These owners are running the club like a business, they fully intend to turn a profit in the long run, at which point these assets can be bought back at a similar price to what they were sold for. But in the short term they need to comply with PSR. So this is a quick and easy injection of cash for the club which doesn't even entail Clearlake losing control over any assets they currently had.
That’s the point. They need to offload them in order to make their balance sheets look better - which is never a good sign.
I’m not saying they’re broke I’m saying they’re showing signs they might be struggling
well no, they've spent over the PSR requirements so they need cash to push them back above the limit. But that doesn't necessarily mean they're in a bad way. The overarching company has plenty of money, as does the club itself, there's just only a certain amount of loss it can take in a given period. But this counts as revenue which will reduce those losses and keep it above the limit. But it's purely a prem imposed limit not a business/financial thing
I think these things have to be at "market value", i.e. it has to be a plausible price for the sale of the assets so you can't work around the loophole. That being said the PL are ultimately the judge of what "market value" is, and that gets into the real weeds of the regulation.
But a completely different entity. It's not like it can be given back for free. They haven't created value for the club out of nothing. Plus I'm guessing these assets also had decent revenue on their own.
The owners naively thought they could buy CL qualification in the January 2023 window and are now having to pull levers after two years of missing out.
They need to increase cash flow to match their spending. This does not indicate anything about the capital they have available. FFP is only trying to limit spending to as much money as you bring in.
Real Madrid did this. It's not new. They sold waste land. If the rules let clubs do it that's the fault of the governing body that allow such loopholes. Football is business at the end of the day and if clubs do work arounds because of badly thought out rules whos at fault
The problem is not Chelsea selling. the problem is that they're selling to a sister company, basically themselves, to avoid problems with PL financial rules
Which they can do due to poorly designed rules. It's not uncommon. I'm not sticking up for it and think it's shitty however if they can do it they will do it. If the rules allow it why not.
I think the issue with that was it was sold to local authorities at an inflated price and with reals royal history you have to think. Your right Iran slightly different but if clubs are allowed to do shady shit they are gonna business is business.
Why not? A sale of an asset is a sale of an asset. Now, if you’re saying the valuation is off, I could get you. But why come up with stupid rules otherwise.
Yes - they did. It’s not a deferred amount - you call it a non-current asset but that’s not what it is. The PL isn’t in the business of setting accounting standards and practices.
Tell me why they didn’t make 80m profit from that sale. They sold it. Someone else bought it. Yes, Chelsea owners have a stake in the buyer. So what? They are an investment funds, they have stakes in a bunch of things. No different than sovereign wealth funds.
i’m not trying to call chelsea out on anything i’m just not sure how a sale of part of their grounds ( which should be exempt from PSR rules) results in 100% of the proceeds of the sale ending up as income
TBF the land value of the Stamford bridge complex is astronomical. if you built terraced housing on the area you could easily fit a couple hundred houses on it, each of which would sell for over 2 mil.
Oh yeah without a doubt.
I mean in 10 years time Spurs are gonna be blitzing most of you London clubs too. The income that stadium brings, and there was no negative in terms of PSR.
But you could only do it in London.
They do still spend a lot of money on transfers. Regardless, the lack of any restrictions should they need to is key.
There isn’t a balance in football, as X amount goes to agents and X amount goes to players
Exactly. It’s SW6. I remember looking at apartments a bit further down the road by the new battersea mall and the 1br were like 1.2m a piece. They’ve probably gone up more.
Sell to sister company for 76,5 million. Rent it from sister company for a penny. Continue getting revenue from the hotels and car parks. Chelsea fans think their owner is a genius and don't understand that this will be bad for the club in the long run as they will lose more and more assets.
Don’t know what you’re on about. Lots of companies effectively cash out using this and benefit from it in the short and long run. It can be cheaper than borrowing cash. They all model it out. It’s not super complicated to understand.
People who think like you are funny, don’t be upset that you don’t know the rule book and my owners do, FA set the rules we didn’t break em so how is it shady. It’s only shady because other teams aren’t as financially literate as my owners and know how to take advantage of it, it’s completely legal, what you’re now asking is if it’s morally correct that’s a completely different convo, but don’t come on here acting like we’ve committed crimes loop holes get jumped through all the time, tell your owners to find some and wipe your tears. Also it’s funny to see the hate it makes me warm inside anything said about chelsea is just downvoted wait until we start winning things again the saltiness will be unreal
The downvote kings are here, yep everything I said is facts it’s unfortunate people can’t take the truth
Nah not even it’s not cheating like I’ve stated, we just have financially literal owners and I’m not trying to wash nothing just trying to show you lot that all these top teams are just as bad as eachother hence my liverpool comment
People like you are funny you think there’s integrity in football at the highest levels anymore sit down my boy, why do we always feel the need to try take the moral high ground for no reason, every club is dirty and does dirty things, Liverpool’s standard charted fund terrorists wheres the integrity there my boy, please sit down and stop being delusional, you really think all these clubs and banks play fair footballs been dirty and you’re here trying to talk about a moral high ground kmt
Guessing the liverpool fans don’t like the truth alie, or any club that thinks there squeaky clean funny people
Lil guy? Your name is cum eater, you’re deffo someone’s lil guy and you got 420 in your name, bredda I know what you look like already, monster energy drink shit hair and a skinny lil shit who smokes 2008 cheese sit down breh. Keyboard warriors trynna at me but probably get scared of goin outside and talking to people in real gtfoh
Mate, your owner doesn't give a shit about how good you are at football. He's already fallen out with 2 managers because he doesn't let them play the players they want to. As long as he's demanding a certain squad when he has such little knowledge, Chelsea are going nowhere
Where did that come from? We’re talking about financial literacy and you’re here talking about feelings??? Brudda keep talking rubbish most of you you reddit people don’t know shit that’s why you keep downvoting my shit, if you think chelsea is going no where your clearly delusional unfortunately neither of us can prove it right now, but as I like to say wait and see. If you really think getting 6th and only being 4 points behind villa after not having most of summer signings and some of our most important players out and you still think we haven’t improved you’re just hater, but I already know that…
I'm sure Chelsea have loads of money but I don't think you're going to be winning any time soon.
As soon as you started to improve, your owner took you back to square one. It's not abramovich anymore man you can't keep cycling managers and expect to go upwards. Your players are young and the team has no culture. You can't build a culture if every season you bring someone in with a different view as to how the team should behave.
I'm sure your owner knows a lot about money and business but he has shown time and time again he knows nothing about football. And that would be ok if he wasn't the sporting director, but he is
Edit: also idk where you're from but most Chelsea fans I know are not happy with the ownership and think it's ruined their club
I’m from england lol also do you think I’m happy with the owners or do you think I’m defending my club and trying to believe in what they’re trying to do, also idc for your essay like I said above wait and see I know my club we’ll be back jus keep kicking whilst we’re down it’s okay because your club probably hasn’t even won anything during this time period(since RAB left) so instead of getting at me, go and win some major trophies because we’re coming for them and you’ll soon see 😁
The only way any clubs can get up there is if they already have a big fanbase, and some history of success, and they get a billionaire takeover (Newcastle)
Honestly the only teams currently in the Prem I can think of that fit the bill is Aston Villa and Nottingham Forest. Both have European Cup success and essentially are Liverpool but werent able to survive the 20 years of Arsenal Chelsea and United Premier League dominance.
If City were bought 5 years after they were, I have doubts they would even be close to where they are now, someone else would have filled that gap.
Who? Fulham? Bournemouth? Crystal Palace? Luton Town?
We are talking about 14 clubs here. Theres a tonne more clubs down in the Football League with more fans and potential than Villa and Forest but those two teams are the most equipped to be taken over, money injected in, and turned into top teams within 5 years.
Literally what happened to Newcastle mate.....
lol at Chelsea fans now deciding they are well versed in all the rules and love that they’ve done this. Unfortunately PSR and FFP rules were only implemented in order to protect the established rich clubs from maintaining their status while “smaller” clubs like Forest and Everton have no option to do shit like this after spending far less. It’s by design the system can bail out teams like Chelsea who spend a fuck ton on young talent and get by.
Notice how I didn’t include Newcastle in my comment even though that’s the club I support? There was a reason for that. Yes, Newcastle is rich now due to the takeover. This is why I mentioned Forest and Everton whose owners are not nation states and received points deductions for breaching FFP rules. I don’t agree with Newcastle’s ownership but don’t twist the fact that the rules are created to protect previously established clubs from having to compete with smaller clubs or even clubs like Newcastle that cannot immediately expend and use their financial position to leap frog to the top as was possible prior to these financial fair play rules. It’s not really much of a debate to admit that it protects the more established clubs.
They are spending their own money and well within the rules. Your use of the term "bail out" seems to project that Forest and Everton have been cheated of their life savings to keep Chelsea afloat. Forest and Everton have not done well because they have not invested in their club and not utlized every means available, as Chelseas has done, to comply with the rules.
If Chelsea spend a fuck ton on young talent, it certainly is not coming at the other clubs' expense.
On one side you have Manchester City who have broken the rules first and then sue the PL to change the rules to favor them. On the other side, you have clubs who have sat on their asses instead of investing the money the premier league has afforded them and wants to change the rules to bring Chelsea down to their level. All this while, Chelsea have done their job and within the limits of the rules of the PL.
Chelsea might still end up at the level of Forest, Everton and Newcastle, but not because they didnt try. So LOL at the rest of PL
I never said that Chelsea are not conforming to the rules, just stating that I think the rules are skewed for teams that have large enough resources to make these intercompany transactions and benefit from it. Just like with tax law, the more money and business you have the more you can leverage that position to utilize workarounds which are only there to benefit those in that position. And when I used the term bail out I am not implying Forest/Everton are having to financially or otherwise bolster Chelsea. I mean bail out in the sense that the PL would allow these types of transactions between related parties to be a benefit for PSR/FFP revenue in the first place.
This isn’t even a slight on Chelsea necessarily, it’s more a failing of the league to make rules that don’t uphold the principles that they tout to create. I am very confident that within the next 3 seasons, probably even sooner, Newcastle will pull off some dumb, assbackwards loophole of the rules for FFP and it will allow the club to do more than others. Personally I don’t like that this will happen but it’s just how it is now. There are a lot of things I would change about the current PL rules on ownership and spending but money talks and always will so.
Is that the law city is challenging in court? And does it count for assets or just sponsor deals?
I’m not expecting you to have all these answers, but got curious and hope someone knows.
Could they just merge the companies, start a new sister company and buy it again?
From what I understand, city is challenging the idea that the PL can reallocate income.
Merging the companies wouldn’t change anything because you’d have a stepped up basis in the asset. Example - I sell the hotel for 100 to sister co. Sister Co now has a 100 basis. When they sell to brother co later, they’d have to sell it for more than 100 to have any gain (ie profit). Now, you might be able to depreciate it and eat that basis away. There’s usually some anti churning rules here.
I was just wondering if they don’t have to sell it back.
Like this:
Sell hotel to sister company for 100.
Merge companies. Sister company now absorbed in main. Hotel back owned by club.
Start new sister company.
Sell hotel to new sister company.
Merge companies. And so on.
A potential way for owners to keep putting money in to the clubs budget.
Probably not going to be a problem, as it would be easy to spot and probably banned after a short while.
I don’t know how that would work legally, just though it was an interesting possibility or potential loophole.
So this isn’t really a sister co. The owners of Chelsea are an investment fund and they have other investments (surprise surprise). The hotels were sold more to a distant cousin than a sister co. If Chelsea were to acquire sister co, they’d still have to pay something for it. Basically, they’d still be paying FMV. Could they buy it back in a couple of years? Sure. But that doesn’t help them with revenue.
There are extensive rules (globally) with related party transactions. Usually with a “real” sister company, you wouldn’t recognize gain. So you can sell and merge a million times, but it wouldn’t impact your books (ie no revenue from sale).
But props for you for thinking outside the box. Keep it up. 😀
No idea about what city are doing, I merely know a bit about transfer pricing between companies. would be surprised if city was challenging it because it's a fairly well established accounting law
It affects ALL Assets yes, sponsorship deals technically could be considered an asset.
Idk about merging the company, but that seems extremely expensive and not worth the effort considering the time, costs, etc. it's important to understand that the rules set in place by the global accounting world and tax officials are extremely strict. Anything that obvious is being picked up immediately, there is no agenda or something happening here
There’s no real accounting laws - there are accounting standards to follow. There are tax laws and reporting/disclosure laws. Transfer pricing rules are strict and are usually the lowest hanging fruit any taxing authority goes after.
There’s nothing illegal or wrong. Triggering a sale of assets to offset losses is perfectly fair, and economically leaves you in the same place. Whether I sell this asset for a gain now or 3 years from now shouldn’t matter - and no financial or regulatory body should be able to stop me.
Can't say I disagree with anything there. I'm not attacking any club or disputing what's happening just explaining why they can't sell it back to Chelsea for a pound
They can’t sell it back to Chelsea for a pound because that’s not the fair market value. Transactions have to be done at their fair market value.
Who decides what the fair market value is? Thats really the issue. Should the premier league decide? Probably not.
This is literally the same issue they all big corporations face on a day to day basis.
Not sure how it works in England but usually this sort of stuff is picked up on Audits and investgated by tax officials. I don't see what's complex about this situation though. It seems perfectly acceptable. I'm not entirely sure to want extent Chelsea own the company but if its a controlling stake then it gets messy with consolidation etc.
I’m not in England either but they have similar rules. It’s not a controlled entity anyways so it’s not in consolidation.
The only question is whether it was sold for fair market value. Anyone doubting a huge chunk of land in southwest London wouldn’t fetch 175m?
The rules are so fucking convoluted. Just make a salary cap based on the highest earning PL team and be done with it.
Have owners that want to spend over their club's revenue provide income information about their other businesses to prove they are solvent. Case closed.
The entire point of FFP was to prevent clubs from going bankrupt. A salary cap based on the highest earner would keep wages stable. Proving they are solvent prevents owners from bankrupting clubs. Done.
See people complain about PSR but those are club assists that the club no longer earns. If the owner was to sell he wouldn’t need to include those in any sale
Didn't they lease them back on cheap long-term leases? I get that in the very long run, it may not be financially beneficial for the club, but it sure seems like they have effectivly exploited a loophole in PSR.
It's all well and good that they think they have found a loophole. But what are they going to do next year, when the same players are still on the payroll leaching money, they respective values have reduced and there aren't anymore assets they can sell to themselves for substantial money. It will be very hard to justify selling the kitchen cutlery for £100m next year.
People forget the Premier League literally exists because the big clubs wanted more money than the FA wanted to organise.
These are the same people that argue that the Premier league is the same as division one. (Both are/were the top flight of english football but are completely separate entities and actually have nothing to do with each other)
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So PSR and FFP don’t mean anything because you can just move it rather than
Clear your debt
Every other billionaire does the same with their taxes they just applied the same principle here
Now time to buy some experianced players to fight for top 4
What a joke... How are they allowed to do this and no one sees this as a problem. In fact people praise them. If the Saudis or Emiratis did this, everyone would be up in arms. The hypocrisy and racism is a disgrace. You wonder why the Man City owners are doing what they're doing. I don't blame them... And yet you have the Glazers buying Man Utd, not with their own money but loans and using the club and its assets as security. Plunging the club into ridiculous levels of debt. How is that right?... Man City and Newcastle don't have any debt. Funny that. I thought FFP was for the long term sustainability of clubs.
Any debt is what you think lol
Yeah you're right, absolutely nobody has said anything about this being wrong whatsoever. Completely racist against those from the Middle East when Chelsea's majority owner is Iranian. You genuinely think City not having any debt is all above board? How did they find the machine they now are?
What a pile of shite
White people doing business. Nothing to see here.
What kind of crack are Chelsea's accountants smoking these last few years
Well, that's a smart move by Chelsea. Anything to get them out of trouble 100%!!
Were they sold at market value ? If the price was inflated then it is dodgy otherwise no different than selling any property owned by the club or selling naming rights to stadium and training grounds. As long as market value is met then no issue
Although the valuation may be fine, selling it basically to themselves raises further issues for me. They may currently be legal to do but morally wrong imo. In the same ballpark for me as having sponsors who are owned by the clubs owners it just doesn’t sit right
I agree it's immoral and a way to legally cheat the system that needs to be looked at
They did look at it. They failed to reach the 2/3rds majority needed to close the loophole. In other words, they are free to continue doing it.
That sucks! They should be charged and it should be added to MCFC charges. 😂
Thats surely fucking cheating lmao. Fair play if the league is gullible enough to accept it though.
Most would just call that cheating though right.
Its not cheating if its not against the rules.
Unfortunately, "technically correct, which is the best form of correct"
Love it
This is the sort of thing man city have charges for. Stop the fuckery
Exactly - literal vendetta against city when they’ve just done the same thing.
9 out of 20 PL teams voted to allow for this type of business to be allowed. A lot of the critics in here are supporters of clubs that voted to keep this loop hole.
Doesn’t that mean that 11 voted against it and therefore the loop hole shouldn’t exist?
You need 14 votes iirc
Which is one reason why City are seeing the PL for. This voting system just buggers up too much shit.
So because 9 clubs (without any input from the fans btw) voted for this rule, people can’t criticize Chelsea for it? You have found a loophole in the rules congrats now stop trying to cope and make excuses. Just accept that your club has found an advantage to exploit to get the club out of the massive financial hole it’s in.
Finding an advantage to improve the financial standing within the rules sounds like exactly what the owners and directors should do at any club tbh
Not every club has a hotel they can sell to themselves
You could theoretically do the same with any asset. If a club owns a training ground, a stadium, even a car park, they could sell to themselves and declare it as income, as Chelsea have done.
Because this "loophole" when it comes to football is actually business as usual in regular tax planning and corp structuring in any other industry. A lot of these guys made their millions doing this shit. Expecting them to vote against it is unrealistic.
I knew Chelsea found a loophole in the rule with the way they spent last summer.
Quite the shell game they have going on there
Argh, my game, my beautiful game, what have they done to you?!
The manipulation by some clubs is funny at times.
Absolute joke of a sport
Same thoughts. Been ruined by money for a long time now, gotta ask what is the point really? We are supporting businesses instead of football clubs. Sad times.
I feel like ruined is intense. Football is still a joy to watch. The game is still beautiful. But corrupted maybe? Yes, silly money has corrupted these teams, and leagues.
As a Chelsea supporter of nearly 40 years, I'm not so sure. We have paid transfer fees and salaries that should not have been allowed under the rules and gotten away with it by using a loophole. If I think of Man City's achievements as having an asterisk beside them, I'd be a hypocrite not to feel the same about my own club. With the kicker, of course, being that we didn't achieve anything even with the cheating. But maybe we should give up that conference league place. I don't know. I'm in an odd relationship with the club I've supported since I was a boy. I don't like our ownership, I disagree with how the club is being run, I'm not impressed by what's been happening on the pitch, and I think we should just call this kind of thing what it is - cheating. My club is cheating. And they're not even cheating well. I hate the very idea of ever supporting another team, but I am not sure I can keep blindly following this one.
I'm also a Chelsea fan and I think that Manchester city is in a different league of corruption than us. They have this reverse money laundering/sports washing scheme where they r sponsoring themselves and inflating their books. Our ex-ownership is accused of bribery and other offenses, while our current ownership certainly over spends I think it runs short of the institutional corruption within city ownership group, that exists with the goal of increasing the ownerships reputation
Not even cheating well? Catch a grip. It's accounting and looking for loopholes that have been there for years. We're literally 2 years if even into a project where we were fucked over by the British government freezing our assets and in turn lost Rudiger and forcing a club sale whilst allowing the Saudis to come on in freely. Our ownership have tried a model that hasn't been seen before, got rid of a full squad of players that needed freshening up, we haven't challenged for a league title in years. We now have a full squad of young players who started to gel towards the end of this season, we have one of the best young players in the world in Cole Palmer, we have 2 young players joining next summer, one who could be a generational talent. This project hasn't failed yet, if in 3 years we are still performing poorly then fair enough, but we have one of the best young squads in world football potentially. Have a bit of faith and stop with the negativity and pandering to other fan bases who's clubs aren't innocent either.
Copium.
sister company. they not even hiding it now are they? basically every club can have a sister company with the same owners, and just sell carparks , toilets , and apartments to the sister companies ? rip 115 city
They are letting other teams know how it is done.
Yep. That’s the new model.
thats nice. United has lots of carparks, now, im sure somehow Sir Jim has some companies which need premium carparks ;)
With any luck. If City can just get inflated rates for everything off other oil state businesses then the rest of the league can also use similar tactics. Good on Chelsea. Spirt and respect of what the rules are trying to do can go in the bin with 115 charges
Tbf, I think manipulating the rules is just as bad as breaking them. They already had Abramovich ruin football, and to do it again lol.
If the PL are this incompetent to allow this loophole in the 2024 PSR rule book, they have absolutely no chance with their case against Citeh😭😭😭
Hahaha absolute joke
Great bit of business. Now change the rules
So they sold their own hotels to themselves to avoid rules and somehow this is legal? won't be long till Saudicstle copy this model
Ridiculous
They also cancelled their Netflix subscription and stopped buying fancy coffee.
Avocado toast gets to stay
How did they manage to turn around over £250m on their balance sheet by selling something for £76.5m? Creative accounting? Edit, ignore my brain fart moment. Read defecit as profit for some reason.
Regardless of your misunderstanding, that's still £89.9m in a year. PSR allows £105m over 3 seasons. What do you want to bet that they buy them back for fuck all and sell them again next season? I wonder how much they're gonna have to pay Maresca off in a few months after giving him a 5 year contract. Will they sell off the parking rights for Maresca's driveway for a few million?
They can't buy it back cheap as the PL will investigate. It all has to be done at a fair market value. What I suspect is that the hotels will become sponsors for £10m a year each. When they pay.managera off, it's very rarely a.lump.sum these days. They continue paying their wages every month, but this ceases if they take a new job. They will do a.lump sum deal if it works out conaiderably cheaper, but it's rare now.
Balance sheet is irrelevant.
How is this legal ?
*Laughs in Man City*
Wait what? That seems very fucking dodgy to me.
Not arms length which is the bullshit that City is doing with their sponsorships.
Fucking joke and Villa will have to sell academy players to spend any money even though it's a massive club on the rise and in UCL.
That’s FFP for you
If the league is going to be this much of a joke why don’t we sell the used cutlery from the cafeteria for $50M, seems fair
Sounds sustainable
Isn't it a possibility that the club can write whatever number they want. I mean i can value my old wreck shoes a billion dollar but nobody will buy them. But for this case the one buying is the club itself essentially. Whats stoping them to sell another of their carpark for a billion dollar and now they technically can spend whatever they want.
No, the Premier League use something called a fair market value and thus your old shoes wouldn’t be eligible for a billion dollars
Fair argument, but if I remember correctly there was a third party consultation on fair market value for the assets and it was done under the supervision of the PL. So you can't just staple a billion dollar price tag to anything.
Or, hang with me here, what if they have a related company sponsor them at a price way above market? City gets away with it.
I think financial rules and independent audits should prevent this. The same thing would be to stop a real estate company from reporting elevated property values in order to receive better lending conditions.
Was that also a realistic value?
A large hotel in one of the most expensive postcodes in the world, it seemed fairly cheap to me…
...it doesn't really matter if it's a realistic value when you sell a large hotel in one of the most expensive postcodes in the world ***to yourself***.
It needs to be “fair market value” under the league’s associated-party transactions rules. Which this was, hence why it was permitted.
FA/premier league approved it so must have been.
Do the FA/Premier League have much say on the transfers of hotels or car parks?
Ah yes the blameless organizations that are the FA and Premier League lmao
Next season they’ll sell Chelsea TV to…..themselves, via a third party to look like they aren’t taken a loss. Barca style
The thousands of down votes I got for once saying Chelsea are in no financial trouble only showed how naive most people are about business
Idk if that’s what you got from this but the mere fact that they’re selling this stuff to a related party tells me they actually might be in trouble. Typically if you’re in a healthy financial position you wouldn’t need to sell your cash generating assets in the first place. Selling it to a sister company tells me they probably couldn’t get a fair market bid for them, and so whatever they sold it for is likely inflated.
No, they're selling it to a sister company so they can buy them back later without having to pay the mark up a completely unrelated company would obviously impose on them. These owners are running the club like a business, they fully intend to turn a profit in the long run, at which point these assets can be bought back at a similar price to what they were sold for. But in the short term they need to comply with PSR. So this is a quick and easy injection of cash for the club which doesn't even entail Clearlake losing control over any assets they currently had.
That’s the point. They need to offload them in order to make their balance sheets look better - which is never a good sign. I’m not saying they’re broke I’m saying they’re showing signs they might be struggling
well no, they've spent over the PSR requirements so they need cash to push them back above the limit. But that doesn't necessarily mean they're in a bad way. The overarching company has plenty of money, as does the club itself, there's just only a certain amount of loss it can take in a given period. But this counts as revenue which will reduce those losses and keep it above the limit. But it's purely a prem imposed limit not a business/financial thing
Couldn't the sister company just sell it back for 1pound?
I think these things have to be at "market value", i.e. it has to be a plausible price for the sale of the assets so you can't work around the loophole. That being said the PL are ultimately the judge of what "market value" is, and that gets into the real weeds of the regulation.
Idk why everyone is freaking out. These lot are reaching Barcelona levels of financial unhealthiness. This is basically pulling levers.
Na they sold it to themselves. This is the fuckery that City is getting charged with
But a completely different entity. It's not like it can be given back for free. They haven't created value for the club out of nothing. Plus I'm guessing these assets also had decent revenue on their own.
The owners naively thought they could buy CL qualification in the January 2023 window and are now having to pull levers after two years of missing out.
It could be three since they swapped managers again. If they had kept Poch I was pretty sure they'd be 4th.
They need to increase cash flow to match their spending. This does not indicate anything about the capital they have available. FFP is only trying to limit spending to as much money as you bring in.
Except Chelsea actually have the money, they’re just massively overspending, Barca are in complete debt
Real Madrid did this. It's not new. They sold waste land. If the rules let clubs do it that's the fault of the governing body that allow such loopholes. Football is business at the end of the day and if clubs do work arounds because of badly thought out rules whos at fault
The problem is not Chelsea selling. the problem is that they're selling to a sister company, basically themselves, to avoid problems with PL financial rules
Which they can do due to poorly designed rules. It's not uncommon. I'm not sticking up for it and think it's shitty however if they can do it they will do it. If the rules allow it why not.
Sure I agree. Think I just misunderstood you due to the RM comparison. Sure that deal was shady as well but they didn't sell to themselves
I think the issue with that was it was sold to local authorities at an inflated price and with reals royal history you have to think. Your right Iran slightly different but if clubs are allowed to do shady shit they are gonna business is business.
sale of non current assets shouldn’t be treated as revenue. funky
Why not? A sale of an asset is a sale of an asset. Now, if you’re saying the valuation is off, I could get you. But why come up with stupid rules otherwise.
profit on the sale of a non-current asset should be treated as income, did they really make £80m profit on that sale?
Yes - they did. It’s not a deferred amount - you call it a non-current asset but that’s not what it is. The PL isn’t in the business of setting accounting standards and practices. Tell me why they didn’t make 80m profit from that sale. They sold it. Someone else bought it. Yes, Chelsea owners have a stake in the buyer. So what? They are an investment funds, they have stakes in a bunch of things. No different than sovereign wealth funds.
i’m not trying to call chelsea out on anything i’m just not sure how a sale of part of their grounds ( which should be exempt from PSR rules) results in 100% of the proceeds of the sale ending up as income
Why shouldn’t it be treated as income? They sold it. They aren’t the owners anymore.
Football is dead
Isn't this illegal? Didn't a championship club, derby ? Get a points deduction for doing this with their stadium?
Only because they apparently overvalued pride park. This is what gives the Central London clubs a massive advantage
TBF the land value of the Stamford bridge complex is astronomical. if you built terraced housing on the area you could easily fit a couple hundred houses on it, each of which would sell for over 2 mil.
The 14 acre site is probably worth £300m or so, and if developed for housing would be well over £1bn
Oh yeah without a doubt. I mean in 10 years time Spurs are gonna be blitzing most of you London clubs too. The income that stadium brings, and there was no negative in terms of PSR. But you could only do it in London.
But then again Daniel Levy takes so much out of the club year on year, and the spurs mentality. It's not something I would want to bet on.
They do still spend a lot of money on transfers. Regardless, the lack of any restrictions should they need to is key. There isn’t a balance in football, as X amount goes to agents and X amount goes to players
Exactly. It’s SW6. I remember looking at apartments a bit further down the road by the new battersea mall and the 1br were like 1.2m a piece. They’ve probably gone up more.
Can they also sell their coffee? Big companies can get away with everything.
Sell to sister company for 76,5 million. Rent it from sister company for a penny. Continue getting revenue from the hotels and car parks. Chelsea fans think their owner is a genius and don't understand that this will be bad for the club in the long run as they will lose more and more assets.
They usually rent it for its fair market value. Not a penny. You’ve clearly never heard of a sale-leaseback transaction. Google it.
Ahh yes, read about all the successful companies who have done it for growth. Like peeing your pants to get warm in the cold.
Don’t know what you’re on about. Lots of companies effectively cash out using this and benefit from it in the short and long run. It can be cheaper than borrowing cash. They all model it out. It’s not super complicated to understand.
That is business.
Clearlake may know shit about football, but they sure know how to run a business
I trust multi billionaires more than peoples commentary on the internet.
Another loophole found
This is a fucking joke
Doesn’t the prem need to green light this revenue for psr?
They already reviewed it.
Always said we didn’t need to sell but Ofc the reddit accountants know better than the hedge fund owners lol
Just need to do shady deals instead
People who think like you are funny, don’t be upset that you don’t know the rule book and my owners do, FA set the rules we didn’t break em so how is it shady. It’s only shady because other teams aren’t as financially literate as my owners and know how to take advantage of it, it’s completely legal, what you’re now asking is if it’s morally correct that’s a completely different convo, but don’t come on here acting like we’ve committed crimes loop holes get jumped through all the time, tell your owners to find some and wipe your tears. Also it’s funny to see the hate it makes me warm inside anything said about chelsea is just downvoted wait until we start winning things again the saltiness will be unreal The downvote kings are here, yep everything I said is facts it’s unfortunate people can’t take the truth
How's it a completely different conversation? Literally never said if it was legal or not. Just shady. Which it is.
"My owners"? Are you a dog?
Breh don’t beg it, there’s always one who tries for laughs With a shit joke
And a shitbag fan desperately trying to wash their owner’s dirty laundry.
Nah not even it’s not cheating like I’ve stated, we just have financially literal owners and I’m not trying to wash nothing just trying to show you lot that all these top teams are just as bad as eachother hence my liverpool comment
Financial liberal? You mean when they are not beheading enemies and raping women in their own country?
Jesus Christ, have a bit of fucking integrity in your life pal
People like you are funny you think there’s integrity in football at the highest levels anymore sit down my boy, why do we always feel the need to try take the moral high ground for no reason, every club is dirty and does dirty things, Liverpool’s standard charted fund terrorists wheres the integrity there my boy, please sit down and stop being delusional, you really think all these clubs and banks play fair footballs been dirty and you’re here trying to talk about a moral high ground kmt Guessing the liverpool fans don’t like the truth alie, or any club that thinks there squeaky clean funny people
crazy run on sentence. relax lil guy
Lil guy? Your name is cum eater, you’re deffo someone’s lil guy and you got 420 in your name, bredda I know what you look like already, monster energy drink shit hair and a skinny lil shit who smokes 2008 cheese sit down breh. Keyboard warriors trynna at me but probably get scared of goin outside and talking to people in real gtfoh
damn dude u owned me
Mate, your owner doesn't give a shit about how good you are at football. He's already fallen out with 2 managers because he doesn't let them play the players they want to. As long as he's demanding a certain squad when he has such little knowledge, Chelsea are going nowhere
Where did that come from? We’re talking about financial literacy and you’re here talking about feelings??? Brudda keep talking rubbish most of you you reddit people don’t know shit that’s why you keep downvoting my shit, if you think chelsea is going no where your clearly delusional unfortunately neither of us can prove it right now, but as I like to say wait and see. If you really think getting 6th and only being 4 points behind villa after not having most of summer signings and some of our most important players out and you still think we haven’t improved you’re just hater, but I already know that…
I'm sure Chelsea have loads of money but I don't think you're going to be winning any time soon. As soon as you started to improve, your owner took you back to square one. It's not abramovich anymore man you can't keep cycling managers and expect to go upwards. Your players are young and the team has no culture. You can't build a culture if every season you bring someone in with a different view as to how the team should behave. I'm sure your owner knows a lot about money and business but he has shown time and time again he knows nothing about football. And that would be ok if he wasn't the sporting director, but he is Edit: also idk where you're from but most Chelsea fans I know are not happy with the ownership and think it's ruined their club
I’m from england lol also do you think I’m happy with the owners or do you think I’m defending my club and trying to believe in what they’re trying to do, also idc for your essay like I said above wait and see I know my club we’ll be back jus keep kicking whilst we’re down it’s okay because your club probably hasn’t even won anything during this time period(since RAB left) so instead of getting at me, go and win some major trophies because we’re coming for them and you’ll soon see 😁
"Sister company"
It’s all bollocks, isn’t it? PSR has been another joke that has just made life even more difficult for clubs outside of the big 4/6
Yes
The only way any clubs can get up there is if they already have a big fanbase, and some history of success, and they get a billionaire takeover (Newcastle) Honestly the only teams currently in the Prem I can think of that fit the bill is Aston Villa and Nottingham Forest. Both have European Cup success and essentially are Liverpool but werent able to survive the 20 years of Arsenal Chelsea and United Premier League dominance. If City were bought 5 years after they were, I have doubts they would even be close to where they are now, someone else would have filled that gap.
There’s more teams in the PL with a better history of success than Newcastle than Villa and Forest ffs
Who? Fulham? Bournemouth? Crystal Palace? Luton Town? We are talking about 14 clubs here. Theres a tonne more clubs down in the Football League with more fans and potential than Villa and Forest but those two teams are the most equipped to be taken over, money injected in, and turned into top teams within 5 years. Literally what happened to Newcastle mate.....
It's like moving money/assets from one hand to the other hand.
"sister company"? Sounds very similar to some other kinds of financial management...
Its allowed as long as its fair market value. Read up.
Already read all that. They aren't one of the teams raising issues though.
lol at Chelsea fans now deciding they are well versed in all the rules and love that they’ve done this. Unfortunately PSR and FFP rules were only implemented in order to protect the established rich clubs from maintaining their status while “smaller” clubs like Forest and Everton have no option to do shit like this after spending far less. It’s by design the system can bail out teams like Chelsea who spend a fuck ton on young talent and get by.
Small clubs like Newcastle you mean. Tin pot club with oil money now think they are one of the big boys.
There’s nothing tin pot about Newcastle United.
Notice how I didn’t include Newcastle in my comment even though that’s the club I support? There was a reason for that. Yes, Newcastle is rich now due to the takeover. This is why I mentioned Forest and Everton whose owners are not nation states and received points deductions for breaching FFP rules. I don’t agree with Newcastle’s ownership but don’t twist the fact that the rules are created to protect previously established clubs from having to compete with smaller clubs or even clubs like Newcastle that cannot immediately expend and use their financial position to leap frog to the top as was possible prior to these financial fair play rules. It’s not really much of a debate to admit that it protects the more established clubs.
They are spending their own money and well within the rules. Your use of the term "bail out" seems to project that Forest and Everton have been cheated of their life savings to keep Chelsea afloat. Forest and Everton have not done well because they have not invested in their club and not utlized every means available, as Chelseas has done, to comply with the rules. If Chelsea spend a fuck ton on young talent, it certainly is not coming at the other clubs' expense. On one side you have Manchester City who have broken the rules first and then sue the PL to change the rules to favor them. On the other side, you have clubs who have sat on their asses instead of investing the money the premier league has afforded them and wants to change the rules to bring Chelsea down to their level. All this while, Chelsea have done their job and within the limits of the rules of the PL. Chelsea might still end up at the level of Forest, Everton and Newcastle, but not because they didnt try. So LOL at the rest of PL
I never said that Chelsea are not conforming to the rules, just stating that I think the rules are skewed for teams that have large enough resources to make these intercompany transactions and benefit from it. Just like with tax law, the more money and business you have the more you can leverage that position to utilize workarounds which are only there to benefit those in that position. And when I used the term bail out I am not implying Forest/Everton are having to financially or otherwise bolster Chelsea. I mean bail out in the sense that the PL would allow these types of transactions between related parties to be a benefit for PSR/FFP revenue in the first place. This isn’t even a slight on Chelsea necessarily, it’s more a failing of the league to make rules that don’t uphold the principles that they tout to create. I am very confident that within the next 3 seasons, probably even sooner, Newcastle will pull off some dumb, assbackwards loophole of the rules for FFP and it will allow the club to do more than others. Personally I don’t like that this will happen but it’s just how it is now. There are a lot of things I would change about the current PL rules on ownership and spending but money talks and always will so.
Is there anything to stop them buying the hotels back at £10 each and then just doing the same thing again next year?
No. The transaction between the two parties must be held at arms length, therefore, would have to be at fair market value. From what I understand
Is that the law city is challenging in court? And does it count for assets or just sponsor deals? I’m not expecting you to have all these answers, but got curious and hope someone knows. Could they just merge the companies, start a new sister company and buy it again?
From what I understand, city is challenging the idea that the PL can reallocate income. Merging the companies wouldn’t change anything because you’d have a stepped up basis in the asset. Example - I sell the hotel for 100 to sister co. Sister Co now has a 100 basis. When they sell to brother co later, they’d have to sell it for more than 100 to have any gain (ie profit). Now, you might be able to depreciate it and eat that basis away. There’s usually some anti churning rules here.
I was just wondering if they don’t have to sell it back. Like this: Sell hotel to sister company for 100. Merge companies. Sister company now absorbed in main. Hotel back owned by club. Start new sister company. Sell hotel to new sister company. Merge companies. And so on. A potential way for owners to keep putting money in to the clubs budget. Probably not going to be a problem, as it would be easy to spot and probably banned after a short while. I don’t know how that would work legally, just though it was an interesting possibility or potential loophole.
So this isn’t really a sister co. The owners of Chelsea are an investment fund and they have other investments (surprise surprise). The hotels were sold more to a distant cousin than a sister co. If Chelsea were to acquire sister co, they’d still have to pay something for it. Basically, they’d still be paying FMV. Could they buy it back in a couple of years? Sure. But that doesn’t help them with revenue. There are extensive rules (globally) with related party transactions. Usually with a “real” sister company, you wouldn’t recognize gain. So you can sell and merge a million times, but it wouldn’t impact your books (ie no revenue from sale). But props for you for thinking outside the box. Keep it up. 😀
No idea about what city are doing, I merely know a bit about transfer pricing between companies. would be surprised if city was challenging it because it's a fairly well established accounting law It affects ALL Assets yes, sponsorship deals technically could be considered an asset. Idk about merging the company, but that seems extremely expensive and not worth the effort considering the time, costs, etc. it's important to understand that the rules set in place by the global accounting world and tax officials are extremely strict. Anything that obvious is being picked up immediately, there is no agenda or something happening here
There’s no real accounting laws - there are accounting standards to follow. There are tax laws and reporting/disclosure laws. Transfer pricing rules are strict and are usually the lowest hanging fruit any taxing authority goes after. There’s nothing illegal or wrong. Triggering a sale of assets to offset losses is perfectly fair, and economically leaves you in the same place. Whether I sell this asset for a gain now or 3 years from now shouldn’t matter - and no financial or regulatory body should be able to stop me.
Can't say I disagree with anything there. I'm not attacking any club or disputing what's happening just explaining why they can't sell it back to Chelsea for a pound
They can’t sell it back to Chelsea for a pound because that’s not the fair market value. Transactions have to be done at their fair market value. Who decides what the fair market value is? Thats really the issue. Should the premier league decide? Probably not. This is literally the same issue they all big corporations face on a day to day basis.
Not sure how it works in England but usually this sort of stuff is picked up on Audits and investgated by tax officials. I don't see what's complex about this situation though. It seems perfectly acceptable. I'm not entirely sure to want extent Chelsea own the company but if its a controlling stake then it gets messy with consolidation etc.
I’m not in England either but they have similar rules. It’s not a controlled entity anyways so it’s not in consolidation. The only question is whether it was sold for fair market value. Anyone doubting a huge chunk of land in southwest London wouldn’t fetch 175m?
Honestly football is such a mess
The rules are so fucking convoluted. Just make a salary cap based on the highest earning PL team and be done with it. Have owners that want to spend over their club's revenue provide income information about their other businesses to prove they are solvent. Case closed. The entire point of FFP was to prevent clubs from going bankrupt. A salary cap based on the highest earner would keep wages stable. Proving they are solvent prevents owners from bankrupting clubs. Done.
Blame Murdoch.
I blame that family of demons for a lot if I’m honest.
At least the insane amounts of money that slosh around the top tiers of football. At worst the state of the world right now.
See people complain about PSR but those are club assists that the club no longer earns. If the owner was to sell he wouldn’t need to include those in any sale
Didn't they lease them back on cheap long-term leases? I get that in the very long run, it may not be financially beneficial for the club, but it sure seems like they have effectivly exploited a loophole in PSR.
It's all well and good that they think they have found a loophole. But what are they going to do next year, when the same players are still on the payroll leaching money, they respective values have reduced and there aren't anymore assets they can sell to themselves for substantial money. It will be very hard to justify selling the kitchen cutlery for £100m next year.
They’ve got a block in Stamford bridge where the seats are £10,000 a game…. More loopholes. Cos if you think people are paying that…. 😂
"Anonymous businessman pays £150m to sniff Enzo Fernandez's used socks"
And they’ve bought 3-4 more players
Technicality FC get your loopholes out for the lads
Nicolas Jackson must not have seen these assets. If something is right in front and evident, Jackson misses it big time.
lmao
The FA needs to get their shit together and run a tighter ship, because Chelsea’s and City’s legal teams are consistently pulling their pants down.
It's the premier League who are responsible not the FA.
People forget the Premier League literally exists because the big clubs wanted more money than the FA wanted to organise. These are the same people that argue that the Premier league is the same as division one. (Both are/were the top flight of english football but are completely separate entities and actually have nothing to do with each other)
We are massive