Chelsea’s owners are understood to be extremely confident they will face no charge in relation to their end-of-year submission under the Premier League’s profitability and sustainability rules (PSR).
The Blues have invested huge sums in the transfer market since a consortium featuring billionaires Todd Boehly and Behdad Eghbali took over the club in the summer of 2022, and posted losses of £90.1million for the year ending June 30, 2023, following on from a loss of £121.4m the previous year.
Despite that, sources close to Chelsea are completely confident and relaxed that the club are compliant with the PSR, which allow maximum permitted losses of £105m over a three-season period.
Teams with aggregate losses in their 2021-22 and 2022-23 accounts must submit a PSR calculation to the league no later than December 31 regarding their 2023-24 accounts.
If clubs are determined to have exceeded the maximum loss figure, the league must issue a complaint no later than 14 days from the December 31 submission deadline, and refer clubs to an independent commission under the league’s ‘standard directions’ for dealing with PSR cases which were voted through by clubs in the summer of 2023.
Last season, complaints were issued against Everton and Nottingham Forest on January 15, with both cases fully completed before the end of the season.
Investment in infrastructure, academies, charity foundations and women’s football are all items which can be treated as ‘add backs’ in a club’s PSR calculation.
Sources close to Chelsea insist they have followed all Premier League regulations. Those regulations currently permit profit from the sale of ‘fixed tangible assets’ to associated parties to be included in a club’s revenue calculation, provided those sales are deemed to have been done for fair market value.
The PA news agency reported in September that the sale of two hotels to a company linked to the club’s owners had received Premier League approval.
The club have also sold the women’s team to the club’s parent company, a deal which is also subject to Premier League scrutiny.
A vote to close this loophole failed to get the required 14-club majority at the league’s annual general meeting in June, with only 11 clubs voting in favour.
In August, Premier League chief executive Richard Masters said he welcomed clubs trying to “find an angle” to gain a competitive edge over their rivals, so long as they stayed within the rules.
Manchester United posted losses of £113.2m for the year ending June 30, 2024 on September 11, but remain confident they are compliant when all factors are taken into account.
Sources close to Nottingham Forest have also expressed 100 per cent confidence this time regarding their PSR calculation, following last season’s sanction. Everton did not comment, but are also understood to be confident of their position.
The Premier League is trialling new financial cost control measures in shadow form this season which, if voted through, could replace PSR for the 2025-26 season onwards.
One part of that are the new squad cost rules (SCR) which will limit “on-pitch” spending on things like player wages and transfer amortisation costs to 85 per cent of a club’s football revenue and their net profit or loss on player sales.
The second part is top-to-bottom anchoring (TBA), which in effect caps a club’s spending – regardless of their revenue – as a multiple of the smallest central Premier League television and prize money allocation to be received by any club.
Clubs agreed to trial an alternative League-wide financial system next season on a non-binding basis
The existing Profitability and Sustainability Rules will remain but clubs will trial Squad Cost Rules and Top to Bottom Anchoring Rules in shadow
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— Premier League Communications (@PLComms) June 6, 2024
The Professional Footballers’ Association has expressed unease on anchoring, and has said it will oppose any measure which amounts to a salary cap. It is understood to have instructed leading sports barrister Nick De Marco KC on the matter.
Masters said in August that a separate Premier League investigation into Chelsea, focused on allegations of financial misconduct during the tenure of former owner Roman Abramovich, was “reaching a conclusion”.
That investigation was prompted by the new owners self-reporting information they had come across during the takeover process to the Premier League and other regulatory bodies about what they described as “potentially incomplete financial reporting concerning historical transactions during the club’s previous ownership”.
