Chelsea have raised eyebrows with their ability to avoid the pressures of Profit and Sustainability rules, with the Premier League clamping down on the accounting tricks the Blues have used
The Premier League have failed in their bid to close a loophole that allowed Chelsea to ease their Profit and Sustainability concerns. English top-flight chiefs have clamped down on financial matters at their clubs in recent years.
That has led to points deductions for Everton and Nottingham Forest, while Manchester City are awaiting the verdict of an independent panel’s investigation into the 130 charges levelled against them.
Several other teams have felt the pressure of PSR, with Newcastle and Aston Villa restricted in the transfer market, while Manchester United have raised ticket prices in a bid to ease compliance concerns.
Amid that context, Chelsea have raised eyebrows with their heavy spending in the transfer market. The Blues have spent more than £1.1billion in the past three years, consistently ending up as the Premier League’s highest spenders.
Despite that, they have been able to surprisingly avoid getting into trouble with PSR. Club chiefs have utilised a major loophole to do that, drawing an attempt to close it from Premier League chiefs.
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The loophole means that clubs can sell assets such as hotels to related companies and include the revenue in their profitability and sustainability calculations in the next season’s accounts.
Chelsea utilied exactly that when they sold two hotels to a company linked to their owners in 2023 and included the revenue generated in their PSR submission. The Blues also sold their women’s team to a related company at a value of almost £200million last year.
That helped the London side record a net profit of £129.6m for the year ended June 30, 2024. League rules do state that such associated party transactions must be done at fair market value.
The Premier League had been keen to close up that loophole, consulting with clubs on a proposal to hold a vote on a rule change in advance of the league’s annual general meeting on Wednesday, which sought to have the sale of such fixed assets excluded from clubs’ PSR calculations.
But the proposal did not gain sufficient support to put it to a vote, meaning the loophole will stay in place for now. Chelsea’s hotel sales were cleared by the league, albeit with the value reduced to a restated £70.5m in their latest accounts, down from an original £76.5m.
The valuation put on the women’s team is still being assessed. Top-flight clubs opted against changing the rules around the sale of fixed assets in 2021.
At the same time, the EFL brought in tougher rules for its clubs after some included revenue from the sale of assets such as stadiums in their financial sustainability calculations. The sale of fixed assets cannot be included in revenue under UEFA’s financial sustainability rules.
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