independent

Saturday 19 April 2014

Blues' profit a first under Abramovich

Chelsea made a profit for the first time in the nine years of Roman Abramovich's ownership last season, raising the prospect that the club may be able to comply with UEFA's financial fair-play rules.

After racking up losses totalling more than £630m in the previous eight seasons, Chelsea FC Plc recorded a modest profit of £1.4m for the year to June 2012.

The figure is a significant improvement on the £67.7m loss recorded in the 2010-11 season and, while full accounts are yet to be published, the profit reflects the financial upside of Champions League and FA Cup victories.

The club also announced that Roman Abramovich had converted £166.6m of loans into equity -- another move intended to prepare Chelsea for financial fair-play.

The figure represents the amount Abramovich has pumped into the club to cover losses since 2009, when he wrote off £710m of loans poured in since he bought the club in July 2003.

A major contributor to the transformation of a major loss to profit is the absence of the huge compensation payments. The club paid £42m in severance deals to Luiz Philip Scolari and his coaching team in 2010-11.

The payment prompted a change of policy, so while Chelsea sacked two managers last season -- Carlo Ancelotti and Andre Villas Boas -- they did not receive lump sums. They were both kept on the payroll until they found a new job, meaning that for a period last season they were paying both Villas Boas and Roberto di Matteo. (© Daily Telegraph, London)

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