Chelsea’s financial fair play record is under pressure from a transfer deficit of more than €500m this season. Suddenly there are several transfers to Saudi Arabia that could repair the balance sheet – but why is this help coming?
With Pierre-Emerick Aubameyang, Edouard Mendy, Kalidou Koulibaly and Hakim Ziyech are currently several players playing at FC Chelsea are under contract, linked to a transfer to Saudi Arabia. These moves could be a lifesaver for the club. Because the value of the players mentioned is no longer as great for the team as their salaries. And Chelsea is under pressure from the financial rules of the associations to have to sell players.
High expenses, little income – Chelsea have a problem
In the 2022/23 season, the club has accumulated a transfer deficit of more than 500 million euros, which is compounded by the high salaries of the players. After being taken over by American investors, the club had spent more money than all top division clubs from Spain, Italy, France and Germany combined to reach the European Cup in the winter transfer window alone.
The investments did not pay off Chelsea finished twelfth in the table. In the end there is a problem: the squad is large and expensive, but there is no income from the European Cup.
UEFA has already publicly warned Chelsea about finances in 2022
In principle, UEFA’s financial regulations state that, apart from a margin of 20 million per season, a club may not spend more than it earns in the premier league Similar provisions apply with £35m per season. According to the rules, however, the reported income must come from the football business and must not come from the investor.
Already in September 2022 Chelsea as well as several other clubs have been publicly warned by UEFA that future balance sheets must look different. Chelsea, which has already stretched the rules with extremely long contract terms for the players committed in winter 2022/23, has to give up players. So the possible transfers to Saudi Arabia come at the right time.
Why is Saudi Arabia’s sovereign wealth fund particularly focused on Chelsea players?
Saudi Arabia’s sovereign wealth fund PIF has taken control of four clubs in the country – Al-Ittihad, Al-Ahli, Al-Nassr and Al-Hilal – and is currently trying to attract numerous players from European clubs to these clubs. Heung Min Son of Tottenham Hotspur should be included, for example. Cristiano Ronaldo and Karim Benzemaalso Wolverhamptons Captain Ruben Neves is moving there.
In England, however, the question is raised as to why so many players from Chelsea for the clubs in Saudi Arabia. N’Golo Kante has already moved to Al-Ittihad in Saudi Arabia on a free transfer, and several others are being discussed.
Chelsea’s Owners: What influence does the sovereign wealth fund have?
Russian oligarch Roman Abramovich was sanctioned by the British government in 2022 after the Russian attack on Ukraine began because the British government believed he had clear ties to Russian President Vladimir Putin. Abramovich sold the club to America. The main focus of the takeover was the investor Todd Boehly in the foreground. However, 60 percent of the shares in Chelsea and thus the majority went to the investment firm clear lake – a private equity-Company.
At private equity is the principle that money is collected from investors in order to invest. In Great Britain, several media are now reporting that the Saudi Arabian sovereign wealth fund PIF is worth several billion clear lake have invested and, conversely, could have an interest in the muddled business of Chelsea to fix again. TV expert Gary Neville has already demanded on the BBC: “The Premier League should impose an immediate ban on transfers to Saudi Arabia to ensure the integrity of football is not damaged.”
When examining new owners, the premier league actually any influence can be identified. Neither clear lakestill Chelsea and the premier league have so far responded to inquiries from the sports show about the ownership of the club and possible influence. The extent of any PIF involvement with Chelsea’s majority shareholder is unknown.
Private equity with increasing role in football
private equity but basically plays an increasingly important role in football. Such companies entered several leagues and clubs in Europe. “private equitySocieties are unsuitable owners of clubs”said Martin Broughtonformer chairman of the FC Liverpoolin March in the BBC. It’s all about quick profit maximization, but football clubs are emotional assets for the fans.
Despite all reservations about some countries, clubs are in better hands even with sovereign wealth funds, as they at least have a long-term perspective, said Broughton.
A question for the future: are the regulations sufficient for the new structures?
For UEFA, the problem is not acute, since Chelsea did not qualify for the European Cup. But for the future, the question arises as to whether the current rules can still keep up with the circumstances. It is currently prohibited in European competition for a legal or natural person to control more than one club. At private equity exactly that may not always be transparent.
At the end of April, UEFA set up an eleven-strong working group to deal with the “long-term sustainability” of football should deal with. Chelsea’s Tricks with the long-term contract terms should be an issue. May also need about private equity to be spoken. The first results of the working group were announced for the end of June.