After two-and-a-half years of huge expenditure under Todd Boehly and Clearlake Capital, Chelsea are operating on a narrow financial runway.
The £1.5bn the Blues have spent under the current owners is, for context, roughly the same as Man United have spent since Sir Alex Ferguson retired in 2013.
The gamble from Boehly and Clearlake, who are locked in a battle for control of Chelsea, is that the younger profile of player that have been recruiting will pay big dividends down the line.
That, combined with an eccentric approach to the club’s commercial arm and grand plans to expand or rebuild Stamford Bridge, appear to be the ownership’s long-term strategy for financial success.
But in the here and now, the legacy of their unprecedented spending, not to mention the failure to secure a front-of-shirt deal for Chelsea, is concerns around PSR (Profit and Sustainability Rules).
On face value, Chelsea are way, way over the £105m in financial losses that the Premier League permits over a rolling three-year period, not to mention UEFA’s 80 per cent turnover-to-squad-cost cap.
Permitted costs – as well as PSR-dodging, intra-company deals like the one that saw Chelsea women’s team sold to another BlueCo-owned business – mean Chelsea are confident of avoiding a breach.
In reality, the accounts that are available to us and the club’s forecasted revenues for 2023-24 mean that the margins are razor thin and Chelsea need every extra penny in revenue that they can get.
Step forward FIFA, who have provided some rare good news relating to the Club World Cup.
Crowned champions for the first time in 2022, Chelsea will represent the Premier League alongside Man City in a new and expanded version of the Club World Cup next summer.
The tournament in the United States will feature 32 teams in a format similar to the international World Cup, with FIFA hoping it can deliver total revenues of over £1bn participants.
However, world football’s governing body has endured a litany of issues in trying to get the tournament off the ground.
Chief among those is the ongoing search for a TV deal. The only offer FIFA have received so far has come from Apple, who bid £750m. FIFA had initially wanted £4bn.
A close second is the absence of any official sponsors – until now.
With just seven months to go until the controversial tournament kicks off, FIFA has now confirmed that Hisense will be the Club World Cup’s first official partner.
No value for the deal has been announced, but FIFA said: ‘[The] agreement paves the way for further sponsorship deals for FIFA’s new flagship club competition to be announced in the coming weeks.’
If accurate, that bodes well for Chelsea, for whom the ambiguity around the Club World Cup’s sponsorship situation has made calibrating their cash flow and PSR position a headache.
No values have been announced, mainly as FIFA are yet to get anywhere near working out exactly how much the Club World Cup will generate in revenue.
But the current reported estimate is that Chelsea will bank somewhere in the region of £32m for playing.
That is not to be sniffed at. It is far more than they will earn even if they go all the way in the Europa Conference League this season.
However, it is also far less than FIFA were initially promising clubs. Chelsea, for instance, were at one point told to expect that they could trouser as much as £80m.
Some analysts have suggested that FIFA could make up the shortfall with their own cash reserves, although the politics between its member nations would make that exceedingly difficult.
Club World Cup gets John Terry’s seal of approval
John Terry, the club’s third highest appearance maker and its most decorated player, was not fit to represent Chelsea at the 2012 Club World Cup.
Chelsea qualified for the tournament by virtue of their Champions League triumph the previous season.
The Blues, then under the management of Rafael Benitez, lost the final in Yokohama, Japan to Corinthians, which was the last time a non-European side lifted the trophy.
At a FIFAe Next Gen event in Liverpool in September, Terry – currently working as an academy coach at Cobham – spoke of his regret at failing to win the Club World Cup and his excitement to see Chelsea take part in the summer.
“I’m excited for Chelsea F.C. to be there and be part of it,” he said.
“As a football club, we’re delighted to be there. We’re going bring our best players, our best squad, and give it our best opportunity, because that’s what the fans want to see.
“Winning your league or the UEFA Champions League is great, but the FIFA Club World Cup is the big test against everybody in the world from different countries, different nationalities and different players as well.
“I would’ve loved to have won it and added that to my collection. Unfortunately, I’m a little bit older now – I’ve missed out, but it’s still great to see so many top teams competing.
“I missed out as a player through injury, and I remember seeing it at the Chelsea training ground on the massage bed. It’s one of those moments I’ll never forget, thinking ‘this is probably my only chance,’ and it was. That still haunts me at the back of my mind.
“You get one chance at these big competitions, two if you’re lucky – if you’re Cristiano Ronaldo or Lionel Messi you get to do it a lot of times – but for the normal player, these don’t come about very often, and I think it’s important to take these opportunities.”
“As a player I’ve been asked a couple of times ‘Do you really care about the FIFA Club World Cup?’. Absolutely you do, and as a football club we’re going to be prepared to go there and be looking to win it.
“There are some really top sides there and from a player’s perspective, 100%, this matters. So again, [we are] super excited to be part of it and for Chelsea it’s an opportunity to win another trophy.
“You’re going to see different teams playing different formations. The tournament will be a different test against different managers and different parts of the world that see the game differently.
“It’s really good to test yourself because you can get kind of mundane in that the Premier League you know what you’re coming up against, you do your research, you know the players like the back of your hand.
“This is a tournament where you go in and it’s a little bit of an open book. So, it’s exciting for everyone to watch these games as well.”
