Owner's move cancels Chelsea debt

 

CHELSEA HAVE in effect drawn a line under an era of lavish benevolence from Roman Abramovich after the Russian oligarch converted his outstanding €350 million of interest-free loans into equity and technically rendered the company debt-free.

The club’s financial figures to June 2009 revealed that Abramovich had followed up his initial €415 million conversion of loans from the parent company into equity, announced back in February, by doing the same for the remainder of the debt.

The Russian’s generosity will now prompt renewed attempts to achieve self-sufficiency – albeit not within the time frame initially outlined by Peter Kenyon, who had targeted 2010 – and, as a result, confirms the end of the heady, free-spending days of the early Abramovich era.

Manager Carlo Ancelotti said yesterday significant funds were available should he feel they were necessary.

Abramovich remains willing to fund a marquee signing in exceptional circumstances, though Chelsea chief executive Ron Gourlay suggested the club would seek to “control expenses, including salaries and wages” as they attempt to reduce annual losses, registered at €50 million in the latest accounts, further in future.

Those losses were reduced by €24 million on the previous year but included a €15 million payment to compensate Luiz Felipe Scolari – whose reign as Chelsea’s manager was curtailed seven months into a two-year contract – and three of his coaching staff.

Further, the figures to be published today will reveal Chelsea’s wage bill has risen from last year’s €166 million.

Regardless Gourlay, who saw turnover reduce by €10 million to €230 million, reflecting the front-loaded nature of some sponsorship revenues, is confident self-sufficiency can be achieved and will seek naming rights for the club’s Stamford Bridge stadium, which might generate €60 million over five years, as one means of additional income.

“The club’s debt has been reduced almost to nil to provide more long-term stability for the club,” said chairman Bruce Buck. “The reduction will also enable the club to comply with any regulations on debt levels which are being discussed by the football community.”

That referred to the Uefa president Michel Platini’s pursuit of “financial fair play”, whereby clubs who spend beyond their means would potentially be excluded from European competition from 2012-13.

Ancelotti reiterated he would consider adding to his squad in January only in exceptional circumstances.

“Together, I and the club took the decision to maintain this squad because we have an opportunity – a great opportunity – to play the younger players,” said the Italian, who has lost four senior players to the African Cup of Nations.

“It’s not a question of money. Absolutely not. If it’s necessary to buy players, then we can do it. But it might upset the balance of the squad when the players come back. But I don’t need any new players. It’s not necessary at this moment.”

His concerns over Didier Drogba’s absence in Angola have been eased somewhat with confirmation that Nicolas Anelka’s recovery from a hamstring tear is gathering pace. The France international will train today and should be in contention for a return against Watford in Sunday’s FA Cup third-round tie at Stamford Bridge.

GuardianService