Post by officergroyman on Feb 18, 2009 10:04:51 GMT -1
Chelsea have been cutting their costs over the last four seasons without impacting upon the wage bill, but it now looks like that is the next target as the club looks to reduce its losses.
In 2005, the club recorded record losses of £140m, and since then, there has been a steady reduction in these figures. 2006 saw a dramatic reduction to -£80.2m which was followed up in 2007 and 2008 with -£74.8m and -£67.5, respectively.
The club had actually managed to reduce its losses last year to -£44.5 but had to pay out some £23m in compensation to ex-managers Jose Mourinho and Avram Grant after they and their staff were sacked by the club.
Luiz Felipe Scolari will also receive compensation of £9m, but that figure will come out of next year's accounts.
As the club look to reduce the Premiership's highest wage bill of £130m a year, star names like Michael Ballack, Didier Drogba, Deco, Florent Malouda, Nicolas Anelka, and Joe Cole could all make their exit from Stamford Bridge.
All of the above players are amongst the highest paid in the Premiership and all can claim a weekly wage of six figures with the exception of Joe Cole.
Removing even one of these players from the wage bill would have an instant reduction of £5 to £6m. Move all six on and the club could save some £30m.
Moving these players on is easier said than done, though. And to do so Chelsea may have to agree to pay part of the players' wages and face losing some key players.
Stars like Frank Lampard, John Terry, Ashley Cole, and Ricardo Carvalho will all be coveted by other clubs and with Chelsea sending the message out that they need to sell players, these stars are the most likely transfer targets.
And already stories have begun to emanate from the Eastlands about the proposed transfer of John Terry to Manchester City.
But Kenyon and Abrahmovich are adamant that these losses need to be tackled, so it looks likely that Chelsea will have to part with one or more of its sons.
"Any squad restructuring in the summer will be funded prominently by sales, as we have consistently reduced our net transfer spend over the last five years and will attempt to continue this trend," said Peter Kenyon after the figures were released.
He added "We have ambitious targets...to require zero cash funding from the owner (Roman Abrahmovich) from the beginning of the financial year 2009/2010"
Since Roman Abramovich took over in 2003, the club has recorded combined losses of £448.5m. And the current wage bill of £130m accounts for 70 percent of their turnover. In comparison, Manchester United's wage bill of £97m is 43 percent of their turnover.
In an effort to further reduce the club's debt, Roman Abramovich has agreed to become the sole shareholder at the club. And the monies that the club owe him has been reduced from £609m to £339.8m as a result of him taking up the shares option.
Add all Abramovich's monies at Chelsea together, and you come to a staggering investment of £710m since 2003.
The main reason for the Oligarch taking up this share option was two-fold. In becoming sole owner of the club, Abramovich has moved to insulate himself from the current global financial downturn.
With sterling reducing in value greatly over the last year, the Russian billionaire has seen billions wiped from his fortune. This share option insulates at least some of his wealth.
The other reason for Abramovich wiping some £300m from Chelsea's debt is that it reduces the club's tax liability.
In 2005, the club recorded record losses of £140m, and since then, there has been a steady reduction in these figures. 2006 saw a dramatic reduction to -£80.2m which was followed up in 2007 and 2008 with -£74.8m and -£67.5, respectively.
The club had actually managed to reduce its losses last year to -£44.5 but had to pay out some £23m in compensation to ex-managers Jose Mourinho and Avram Grant after they and their staff were sacked by the club.
Luiz Felipe Scolari will also receive compensation of £9m, but that figure will come out of next year's accounts.
As the club look to reduce the Premiership's highest wage bill of £130m a year, star names like Michael Ballack, Didier Drogba, Deco, Florent Malouda, Nicolas Anelka, and Joe Cole could all make their exit from Stamford Bridge.
All of the above players are amongst the highest paid in the Premiership and all can claim a weekly wage of six figures with the exception of Joe Cole.
Removing even one of these players from the wage bill would have an instant reduction of £5 to £6m. Move all six on and the club could save some £30m.
Moving these players on is easier said than done, though. And to do so Chelsea may have to agree to pay part of the players' wages and face losing some key players.
Stars like Frank Lampard, John Terry, Ashley Cole, and Ricardo Carvalho will all be coveted by other clubs and with Chelsea sending the message out that they need to sell players, these stars are the most likely transfer targets.
And already stories have begun to emanate from the Eastlands about the proposed transfer of John Terry to Manchester City.
But Kenyon and Abrahmovich are adamant that these losses need to be tackled, so it looks likely that Chelsea will have to part with one or more of its sons.
"Any squad restructuring in the summer will be funded prominently by sales, as we have consistently reduced our net transfer spend over the last five years and will attempt to continue this trend," said Peter Kenyon after the figures were released.
He added "We have ambitious targets...to require zero cash funding from the owner (Roman Abrahmovich) from the beginning of the financial year 2009/2010"
Since Roman Abramovich took over in 2003, the club has recorded combined losses of £448.5m. And the current wage bill of £130m accounts for 70 percent of their turnover. In comparison, Manchester United's wage bill of £97m is 43 percent of their turnover.
In an effort to further reduce the club's debt, Roman Abramovich has agreed to become the sole shareholder at the club. And the monies that the club owe him has been reduced from £609m to £339.8m as a result of him taking up the shares option.
Add all Abramovich's monies at Chelsea together, and you come to a staggering investment of £710m since 2003.
The main reason for the Oligarch taking up this share option was two-fold. In becoming sole owner of the club, Abramovich has moved to insulate himself from the current global financial downturn.
With sterling reducing in value greatly over the last year, the Russian billionaire has seen billions wiped from his fortune. This share option insulates at least some of his wealth.
The other reason for Abramovich wiping some £300m from Chelsea's debt is that it reduces the club's tax liability.
I see your point C@V have an exalt my bray!!!