Despite their outstanding domestic record of late, a team full of World renowned players and a bank balance that most clubs would only dream about, Chelsea’s current owner Roman Abramovich faces a complex issue over the next couple of years. The fact that Chelsea are likely to end every season deeply in debt on their club balance sheet, despite the millions that Mr Abramovich has put into the club.
A team may be able to make a decent amount of money from club and kit advertisement deals, the sale of soccer merchandise, the sale of players to other teams and prize money winnings, if they are good enough, but for Chelsea the enormous costs of keeping their squad together is still a major drain on resources. With UEFA adopting stringent new rules by 2012, meaning that all participants in their competitions must be running within stringent financial rules, Chelsea needs to find a way to increase their earnings while staying in European soccer’s elite.
The process of stemming the clubs debt started last summer when several high-income first grade players were allowed to leave the club for new pastures. Michael Ballack left for Leverkusen, Deco and Juliano Belletti joined Fluminense, Joe Cole moved North to Liverpool and Ricardo Carvalho rejoined former manager Jose Mourinho at Real Madrid. These player drops certainly reduced the annual wage bill, but other measures may still need to be taken in order to reduce the debts still further.
Chelsea’s owner has invested vast quantities of money recently to help the club achieve his ambition of the Londoners being recognized as not only the best club in England, but also Europe and the world. Currently either Real Madrid, Manchester United or Barcelona can claim the title of the worlds ‘biggest’ club, depending on how you wish to define the criteria for that title and there are two big reasons why Chelsea, despite Abramovich’s vast spending and blank cheque wages policy, have been unable to match the levels set by the trio of soccer giants: The gate receipts generated by the relatively small Stamford Bridge stadium and the clubs worldwide merchandising appeal.
over the past few years, there have been muted speculation that there are plans to address the limited size of Stamford stadium over the next few seasons. Reports have stated that Stamford Bridge may soon be replaced as the home of Chelsea Football Club. Exact details remain unknown but there is renewed talk that Chelsea may move in the near future to a shiny new, 60,000 seat capacity stadium which will then become the foundation for the club pushing on to becoming truly the most renown club in world.
The proposed new stadium and its higher capacity will have a instantaneous, positive effect on resolving Chelsea’s financial situation. The added income from the bigger ground would, provided the club can sell the additional tickets, generate considerably more income for the club during each home game. The increased revenue from a new ground will be an incredible bonus in helping the club follow the new set of rules the UEFA wants in use in time for the start of the 2012 season.
Another bonus financially is that Chelsea could decide to sell their stadium naming rights to the major sponsor, as neighbours Arsenal did with their new Emirates stadium.
Merchandising sales could also be improved by a new stadium, more seating means more fans and this will have a continuing effect in other overseas markets, notably those in East Asia and North America.
For Chelsea to be successful on their long term aspirations, now is the right time to spend their owners cash on the club’s infrastructure, instead of on player wages and huge transfer fees. If Mr Abramovich is ready to move Chelsea onto the same level as Real Madrid, Barcelona and Manchester United, then he needs to invest his money into a bigger stadium as that is the next step that the Londoners must take in order to achieve the levels of greatness to which they aspire.