Friday, February 13, 2009

Elvis Costello was so right...

[Musical interlude]

... but it is a good place for a manager. After all, you get to marshal a decent-enough squad for seven or eight months before turning up at Roman's office for your giant severance package.

In fact, it's this wonderful business practice that's contributed significantly to the money mess at Stamford Bridge, with the news this morning that the Blues revealed a 65.7m pound loss ($95m) for the financial year ending in June 2008.

How many Andrei Shevchenkos would that buy?

Sadly, considering they announced losses of 140m back in 2004, it just shows that they're slowly getting better. But still, this is difficult terrain for a club and owner who were so used to being able to outbid anyone on a player at any time.

From the Beeb:

The BBC has learned that Mr Abramovich's investment in the club has reached £710m. He has now changed part of that investment from an interest-free loan into shares in the club, as a sign of continuing commitment to Chelsea.

The move will also help defuse European criticism that Chelsea is a heavily indebted business, says BBC business correspondent Nils Blythe. In another attempt to scale back its debt, the club is aiming to pay for any purchases this summer by selling players.

The club has also reiterated its intention "to require zero cash funding from the owner [Roman Abramovich] at the beginning of the financial year 2009/2010". Chelsea chief executive Peter Kenyon added: "There is no doubt that the positive upward trends of turnover and the continued reduction in losses shows that Chelsea is building a strong business base to build on in what will be challenging times. This is even more evident given that the results were adversely affected by the exceptional items."

He also said that any squad restructuring in the summer would be funded predominantly by sales, and that over the past five years the club had "consistently reduced our net transfer spend".

The BBC's business editor Robert Peston said Mr Abramovich and the club's executives were "doing what they can to transform Chelsea from a trophy asset that only a multi-billionaire could own into a something that might be describable as a business".
Still, we can point and laugh, right? Bringing in players on loan seems a long way away from the 25m and 30m price tags of Veron and Shevchenko.

23m pounds spent on severance for Mourinho, Grant and five other coaches lost in the year, and Scolari's losses are yet to hit the books, although it's in the range of 7.5m pounds. Hiddink is collecting 100,000 pounds a week until the end of the season, and that wage bill needs to come down somehow.

Will they able to remain a competitive Top 4 team while also trying to become a respectable business. If Roman has 10 quid left, he might wish to bet on "no".

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