In the final weeks of a Premier League season that appeared doomed to end in mid-table mediocrity, Chelsea have a real shot at qualifying for Europe.
Currently in seventh, level on points with Manchester United but boasting a far superior goal difference, Mauricio Pochettino’s young team sit two points behind Newcastle United with three matches remaining. Sixth place — which would secure Europa League football next season, provided Erik ten Hag’s side do not beat Manchester City in the FA Cup final — remains firmly in play.
That outcome would feel like success and represent tangible, positive progress for a relatively inexperienced squad that has been on a painful learning curve in the most competitive league in the world.
It would also introduce new financial challenges for Chelsea’s owners, some of which were detailed by The Athletic ahead of the Carabao Cup final in February.
UEFA’s club licensing and financial sustainability regulations (FSR) will only allow losses up to €80million (£68.5m; $86m) for the 2024-25 monitoring period — which encompasses the 2022-23 and 2023-24 seasons — provided the club in question is deemed to be in good health and not subject to existing UEFA sanctions. This is significantly more restrictive than the £105m loss over a three-year period permitted by the Premier League’s profit and sustainability regulations (PSR).
Chelsea’s official financial results for 2022-23, published on Companies House in March, revealed a £90.1m pre-tax loss and painted a worrying overall picture that indicated the club only narrowly remained PSR compliant by banking £76.5m profit from the sale of the two hotels at Stamford Bridge to a sister company owned by Todd Boehly and Clearlake Capital.
Ominously, this deal is still awaiting formal approval from the Premier League as being of “fair market value” almost a year after it was agreed.
In any case, it cannot help Chelsea comply with FSR. “Under UEFA rules, real estate profits are excluded from the calculation,” football finance expert Kieran Maguire tells The Athletic. “You can do it under PSR, but you can’t do it in the EFL and you can’t do it under UEFA.”
Chelsea sold two hotels at Stamford Bridge (John Walton/PA Images via Getty Images)
The margin for financial error is further reduced by UEFA’s decision to cap player amortisation at a maximum of five years regardless of the length of their contract from the summer of 2023. Premier League clubs voted to follow suit but the rule change did not come into effect domestically until January 2024, making Chelsea’s signings last summer more expensive for the purposes of FSR compliance than for PSR.
“In the case of Moises Caicedo (who signed an eight-year contract with Chelsea after joining from Brighton & Hove Albion), his £100m transfer fee counts as £12.5m annually for PSR but, in UEFA’s calculations, it will need to be £100m divided by five (years),” Maguire explains. “So it will count as £20m per year.”
The Athletic projected in February that UEFA’s five-year amortisation cap would raise the yearly cost of Chelsea’s summer signings for FSR purposes from £59.4m to £80.9m.
This, however, was based on the total transfer fee commitment for the summer of 2023 being £404.8m; in their accounts the club disclosed transfer spending of £454m after June 30, 2023, suggesting the fees paid for the 11 players who arrived at Stamford Bridge in that window may be even higher than initially reported — thereby making the amortised cost greater.
In such financial circumstances, it is legitimately questionable whether the benefits of qualifying for the third-tier Europa Conference League — Chelsea’s likely outcome if they finish seventh rather than sixth — outweigh the financial drawbacks. West Ham only earned around £16m for winning the entire competition in 2022-23.
The good news is the Europa League is a different matter.
Lifting the trophy for a third time in 2024-25 would net Chelsea around £30m in prize money. That best-case scenario would also guarantee seven additional matches at Stamford Bridge, which brought in an average of £3.1m in match-day revenue in 2022-23, with tickets and hospitality packages more likely to sell out against a slightly higher standard of European opposition.
Add that up and a successful Europa League campaign could be worth in excess of £50m. It may not be the £82m that Chelsea earned for reaching the Champions League round of 16 in 2022-23 but it is a significant revenue boost, even factoring in the bonuses for European participation written into first-team player contracts.
There are other benefits. Qualifying for the Europa League would improve Chelsea’s chances of securing a lucrative new primary shirt sponsorship, which is yet to be finalised for the 2024-25 season. Finally and most enticingly of all, winning it offers an alternative route — and arguably an easier one — back into the Champions League.
Chelsea’s most recent published financial results reinforced the outside perception, played down by senior figures within the club, that significant player sales are required before June 30 in order to remain PSR compliant for 2023-24. This artificial deadline could put additional pressure on an important summer and weaken the club’s negotiating position when attempting to sell the players considered expendable at Stamford Bridge.
In his analysis of Chelsea’s financial results, respected football finance analyst Swiss Ramble concluded that the club will have to generate a PSR profit of £36m for 2023-24 to remain within the Premier League’s three-year loss limit of £105m, effectively breaking even in the accounts before allowable deductions are applied.
Selling players — particularly academy graduates who represent pure profit in the books — before June 30 is the most feasible way to achieve that.
Conor Gallagher’s sale would represent ‘pure profit’ on the books (Justin Setterfield/Getty Images)
When it comes to FSR, Chelsea have more time to get their books in order. UEFA’s monitoring period runs from January 1 to December 31, meaning even player sales registered after June 30 are factored into their calculation. The fact that no new signings arrived at Stamford Bridge in the most recent January transfer window will be helpful.
UEFA have also introduced squad cost control measures that tie player wages, transfer and agent fees to club revenue and profit on player sales. The ratio stands at 80 per cent for 2024 before dropping to 70 per cent in 2025; Swiss Ramble estimates Chelsea were at 86 per cent in 2022-23, but this is tied to a gargantuan £404m wage bill that club officials insist has been drastically reduced with the departures of a large number of high earners last summer.
Many in football are waiting, or even hoping, for Chelsea to be found in breach of the sport’s financial regulations. Qualifying for the Europa League or Europa Conference League might well increase the chances of this happening, though the club’s owners have so far proven creative (or cynical, depending on your point of view) enough to stay just within the permitted limits.
Pochettino and his team have no choice but to finish the Premier League season as strongly as possible, bring European football back to Stamford Bridge and let others worry about the rest.
GO DEEPER
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(Top photo: Chelsea celebrate winning the 2019 Europa League, Etsuo Hara/Getty Images)