Chelsea lost £65.7 million (US$130.8 million) last season, with almost a third of that total paid out in compensation to departed managers Jose Mourinho and Avram Grant by owner Roman Abramovich, financial figures released yesterday revealed.
Abramovich has signaled his ongoing commitment to the Premier League club by converting half of his interest free loans — £339.8 million — into equity in the financial year ending June 30, 2008.
“There should now be no doubt as to the owner’s commitment to the club and the stability of the company’s funding structure,” chairman Bruce Buck said in a statement.
Stamford Bridge officials moved quickly last month to quash reports that Abramovich’s interest is waning in the club he bought in 2003 and that he was looking for a buyer.
The London club has been unprofitable since the Russian billionaire bought the club, but chief executive Peter Kenyon has set a target of breaking even by 2009-2010.
The losses of £65.7 million posted yesterday represented a 12 percent drop on the previous financial year, and group turnover increased by the same proportion to £213.1 million.
It cost Chelsea £23.1 million in compensation to release Jose Mourinho in Sept. 2007 and Avram Grant last May.
The results do not account for the impact on Abramovich’s finances resulting from the worsening global economic turmoil, or the decision to dump Grant’s replacement, Luiz Felipe Scolari, earlier this week.
“There is no doubt that the positive upward trends of turnover and the continued reduction in losses shows that Chelsea is building a strong business base to build on in what will be challenging times,” Kenyon said.
“We have consistently advocated the aim of self-sufficiency which has always been supported by the owner,” he said.
“We are hopeful of being close to these targets in the timeframes we have set given the underlying strengths of the business,” he said.
Kenyon warned that players will have to be sold if the manager wants to make additions in future. What isn’t known is whether incoming manager Guus Hiddink will be staying after his interim deal expires at the end of the season to oversee a summer rebuilding project.
“Any squad restructuring in the summer will be funded predominantly by sales as we have consistently reduced our net transfer spend over the last five years and will attempt to continue this trend,” Kenyon said.