Chelsea is unsustainable, vast liabilities

[4T5]

Butchered a bit to removed unnecessary aggro (it was written by a spurs fan).

Interesting - wonder if it is at all accurate.

And posted by a Leeds fan
All i can think of is Ken Bates
As for the whole discussion I've supported them in the 2nd Division & enjoyed my football better when we were the underdogs. **** RA & the debt. I'll support them till i die & the derogatory comments from other teams fans will always mean Nothing to me.

 

[mcwildcard]

Did you read the article in the OP? Chelsea's last set of accounts state that you have a debt of £500m so the debt is not in RA's name like you think.

Of course I read it, but frankly any article that contains writing like this:

There has also been speculation about a "Trust Fund" having been set up to cater for Chelsea should anything happen to the Russian - total nonsense as usual and all the Russian has stated VERBALLY is that he will "provide sufficient funds to finance the business for the foreseeable future."

...is immediately dismissed as unsubstantiated tabloid rubbish in my eyes.
There's nothing to indicate that this isn't mostly guesswork and heresay passed off as fact.

If RA left or decided he was no longer going to subsedise your losses then you would go bust. With the debts the club have, the continuous losses and the lack of a fan base the size of Utd or Liverpool to make an in-roads into those debts then i can't see anybody (other than another RA) willing to buy the club.

Apart from maybe a consortium who can see that we have the potential to break even then go on to make a tidy profit?
Losses down from 140mil to 80mil in one year, a big profit in this season's transfer market, a few big mistakes off the wage bill at the end of this season, a 30mil+ boost in TV money?
Looks pretty rosy to me.

Its going to take a long time before Chelsea are no longer reliant on RA but untill then RA is definantly more important to Chelsea than JM is (the point of the article in the OP).

In that I agree, no player or manager is bigger than a club, but the owner argueably IS the club in many respects, so by default they will always be more important than any manager.

 

[Twinblade]

What you also need to consider is that Roman is a businessman, and at the end of the day it doesn't matter how much he spends on the club, and whether he will get bored of playing fantasy football he will always be a businessman, and being such isnt going to sell the club unless he is going to make a profit, or at the very least recoup the vast majority of his expenditure.

I don't like what RA has done at Chelsea, but at the end of the day its happened and he is slowly reducing his investment in the club. I honestly feel that they will reduce their £500m debt to something more managable and still be seen as a viable proposition should RA decide to sell in the future. Yet we are talking about a business plan that was touted around as taking 10 years to do so.

Manchester United are a very viable company, and I am pretty sure that their debt is almost as large as that of Chelsea's because of the huge financing of the Glazer's takeover. (no flaming on this bit, not seen the accounts)

 

[Gilly]

Isn't their debt bigger than Chelsea's?

 

[Badboy2k3]

Yes I believe our debt is more (600million or something), but on the other hand we make a profit and are self sustained.

 

[BaZ87]

......

You can go and look at Chelsea's accounts yourself and in the last set of accounts you had a debt of £550m, thats a fact not tabloid rubbish.

Also i don't think you fully understand how your accounts will be calculated if you think you are going to make a big profit on this seasons transfers, it will take into account the £16m loss on Veron (+ plus any others that were sold at a loss or profit) for example.

As for your drop in losses from £140m - £80m, do you really think it will drop at a similar rate again? There was only so much costs that could be cut, iirc 80% of your turnover was going to wages (before the likes of Sheva and Ballack signed too).

I also don't see why a consortium (or any single businessman) would currently be interested in Chelsea, they would have to come up with £550m just to pay off the current debt and Chelsea still haven't shown that they can even break-even let alone make a profit, so i don't see how they would even be able to pay-off the £550m let alone make any money for themselves. Because of this its going to take a long time (of success) under RA before Chelsea have a chance of growing as a club and a brand to the levels or Utd, Liverpool, Real and Barca and thus becoming a viable business option.

Isn't their debt bigger than Chelsea's?

Yep but like badboy says, Utd are making huge profits so the debt is fairly managable, problem Chelsea have is that they are still losing money and nobody knows how long that will carry on for.

 

[JAzz]

They are gonna go bankrupt and then JohnnyG will have to start supporting Southall FC

 

[m1ke]

Even Arsenal (as well as plenty of other hugely successful clubs in europe, Bayern and Milan for a start) have never managed to reach the levels of Liverpool or Utd (+ Real and Barca) in terms of a global brand.

What makes you think that? Both Milan and Bayern generate more revenue than Liverpool do (and both have higher average stadium attendance).

OT: I think this is obvious (that Chelsea will go under without Abramovich's money). However, I also think that if Chelsea continue their success, the more 'fans' they'll accumulate which in turn will generate more revenue.

 

[BaZ87]

What makes you think that? Both Milan and Bayern generate more revenue than Liverpool do (and both have higher average stadium attendance).

I was talking about the size of the brand and the possibility of making large amounts of cash because of having the greater fan-bases, go out to Asia and its Liverpool, Utd, Real or Barca, none of the other top clubs get much of a mention.

Bayern and Milan have higher average attendances thus greater revenue because they have a bigger stadium but thats going to be put right when our stadium is complete.

 

[Morba]

Yep but like badboy says, Utd are making huge profits so the debt is fairly managable, problem Chelsea have is that they are still losing money and nobody knows how long that will carry on for.

but they are losing less each year, which was planned for.

 

[BaZ87]

but they are losing less each year, which was planned for.

Yes they are losing less but thats simply down to new kit and sponsorship deals and decreased spending, they couldn't help but lose less cash last year considering how much they lost previously. Next year they won't have these new deals to improve there figures again, there was only so much room for improvement over the short-term. Although im sure there figures will improve again it will be no where near the same rate as previously and i don't think they will break-even by 09/10 like Kenyon's plan says.

The point of the last post was that Utd'd debt is completely managable where as Chelsea's debt and continuous losses makes it only managable for RA (or similar), untill they eventually improve enough where by they are making a decent profit to be able to pay off the debts..

 

[Bennah]

This is'nt offical yet so its all speculation for the time being untill real documents and such are released, if they are.

Even if Chelsea are in debt, dont you think that RA has some money to pull they out? He has a very large bank balance, so I dont think its a huge problem to him and hes not going anywhere. He would be a fool to just walk away from a club he loves and spent a lot of time and money into over the last 3 seasons or so.

 

[BaZ87]

Its not speculation, those are the figures taken from there accounts and its RA's spending thats made up the majority of that £550m. While RA is there its not a problem because the money doesn't have to be paid back, its if and when he leaves that they may be in serious problems.

The point of the article is that its RA who's the most important not JM.

 

[Bennah]

Ah ok then. I get you. Well as you say, it depends whether he leaves or not and the club is left with huge debts. I dont think that he would leave any time soon.

Well time will tell anyway. Its only the start of the season anyway, anything can happen.

 

[JAzz]

Yes I believe our debt is more (600million or something), but on the other hand we make a profit and are self sustained.

That is the key thing, having more debt doesn't necessarily mean Man utd are in a worse position, they can service their debt whereas Chelsea are struggling to do so.

 

[FrankJH]

I would be interested to know how much the actual stadium on its own is worth - that is such a prime developement site it would fetch a pretty penny (or three)

To be honest I very much doubt they are in that much debt, it just wouldnt make sense (yes by all means the players are in one sense a fading financial liability - ie for the most part if they were sold today the club probably wouldnt get back what was paid for them as a whole, even though a few would make money)