Abramovich outlay in quest for European domination rises to £740m
Published 08/04/2011 | 05:00
As Roman Abramovich ponders Chelsea's chances of overturning Wednesday's 1-0 home defeat to Manchester United, it has emerged that the cost of the Russian's so-far fruitless pursuit of European glory has risen to almost £740m.
Figures for Chelsea's holding company published yesterday reveal that Abramovich's total loans to underwrite the football club had reached £739.5m by the end of the 2009-10 season.
The loans are interest free and repayable on demand within 18 months if Abramovich were to withdraw his support, though he shows no sign of walking away. The scale of his remarkable personal investment has already increased further as a result of the £73m January purchase of Fernando Torres and David Luiz.
The accounts for Fordstam Limited, Chelsea's ultimate holding company, reveal that the oligarch was required to pour in a further £13m last season even as the club won the Premier League and FA Cup double and made a net loss of just £1m on transfer business.
Despite last season's success, the club lost £70.9m, up from £44m in 2008-09, largely because of a wage bill of £172.5m, which increased almost £20m on the previous season and now accounts for 82pc of club turnover.
The revelation that Abramovich continues to make massive loans to Chelsea's holding company also puts the club's claim to be "debt-free" into context. Last year the club announced that Abramovich had converted those loans, which then stood at £726m, into equity to help the club deal with the looming challenge of Uefa's financial fair-play regulations.
Former chief executive Peter Kenyon famously declared that Chelsea would break even by 2010 and the club have spent the last two years imposing a cost-cutting regime intended to make that process. Having fallen woefully short of that target -- and Abramovich's sanctioning of the £50m purchase of Torres indicates his definition of cost-control is elastic -- the challenge now is to reduce losses so they do not breach Uefa's guidelines.
Financial fair-play requires clubs to break even over a three-year period starting in 2011-12. They will be allowed losses of £38.5m in each of the first two seasons.
Chelsea are hopeful that an enhanced commercial programme, including the search for a £100m naming rights deal, will help close the gap. With wages continuing to rise faster than revenue, however, the day is approaching when Abramovich may not be able to ease his on-field frustrations with ever-larger loans to the network of companies that control his pet project. (© Daily Telegraph, London)