UEFA hand Chelsea huge financial blow amid rule clarification
Chelsea have been handed a blow by UEFA over the European football governing body’s stance that clubs are not allowed to raise income by selling assets to sister companies.
Premier League rules have permitted Chelsea to sell off two hotels for £76.5m, while ownership of the women’s team has passed from Chelsea to its parent company – effectively selling assets to themselves and being to report the money on the balance sheet.
The hotel deal was scrutinised for months because it hadn’t been signed off as being of „fair market value“, in other words there concerns over whether the value was overinflated. Similarly, there were reports in July of a Premier League investigation into transferring the women’s team ownership.
Yet a loophole not yet closed by the Premier League, but already banned in the EFL (Championship, League One, League Two), doesn’t fly with UEFA.
The Times writes that UEFA will not allow income raised in such ways to be registered, but cases will be assessed on an individual basis by an independent panel. If the governing body does believe Chelsea to have breached regulations, sanctions – starting from a fine and ranging to a ban from European competitions – could be applied from 2024/25 onwards.
UEFA’s financial rules, now dubbed its ‚football earnings‘ rules rather than ‚Financial Fair Play‘ as it was previously called, are stricter than the Premier League’s Profit & Sustainability Rules (PSR). Clubs in European competition this season must have made no more than €40m (£33.7m) across the last two seasons, compared to £105m over a three-year period in the Premier League.
For 2022/23, Chelsea posted a pre-tax loss of £90.1m, down from £121.4m in 2021/22. Their accounts for the 2023/24 campaign won’t be published for another few months.