Premier League braced for battle with Chelsea over potential breach of financial rules

Premier League braced for battle with Chelsea over potential breach of financial rules – with club preparing to cite Antonio Rudiger’s exit as one reason for their huge £121m losses

  • Chelsea have reported losses of £121 million across the 2021/22 season 
  • They were barred from receiving revenue for over two months from March 10
  • However, the majority of their income for the season had already been banked

Chelsea are set for a battle with the Premier League over a potential breach of spending rules with the club ready to cite Antonio Rudiger’s departure for Real Madrid on a free transfer last season as one justification for their huge losses. 

In reporting a loss of £121million for the 2021-22 season Chelsea cited ‘extraordinary expenses and loss of revenue’ when working under a government licence last year, but sources have told Sportsmail that the restrictions only cost the club a few million pounds.

Chelsea were barred from receiving revenue by the government after Roman Abramovich was sanctioned on 10 March last year until the Todd Boehly takeover was completed on May 28, but the vast majority of their income for the season had already been banked by that point. 

Premier League central funding, television fees, season-ticket and corporate hospitality revenue had all been paid by that point, although the club did lose out by being unable to sell merchandise, programmes and match-day food and drink.

Chelsea were also unable to negotiate any new commercial deals or player contracts during that three-month period however, with the club ready to cite the collapse of contract negotiations with Rudiger as a potential loss of income if charged with breaching profit and sustainability rules. 

Chelsea have reported losses of £121 million for the 2021-22 season  and cited extraordinary expenses and loss of revenue’ when working under a government licence last year

The club are expected to name their inability to offer Anthony Rudiger (pictured in action for Real Madrid) a new contract as a justification for their huge losses

The club are expected to name their inability to offer Anthony Rudiger (pictured in action for Real Madrid) a new contract as a justification for their huge losses

The accounts published this week take the club’s losses over the Premier League’s rolling three-year period to £241.9m – they made a profit of £32.5m in 2019-20 followed by a record loss of £153.4m the following year – putting them at risk of breaching the limit of £105m.

Rudiger moved to Real Madrid on a free transfer last summer after failing to agree new deal at Chelsea, whereas if he was under contract the 30-year-old would have been worth tens of millions. 

Sources with knowledge of the negotiations claim that Rudiger had already decided to leave on a free before Abramovich was sanctioned however, and the Premier League could ask Chelsea for evidence to demonstrate that they had realistic hopes of extending his contract.

Andreas Christensen, Ross Barkley and Marcos Alonso also left Stamford Bridge on free transfers last summer, but their departures were not confirmed until after 30 June so cannot be included in the 2021/22 accounting period.

The missed opportunity to renegotiate major commercial deals could also be cited, with Three and Hyundai suspending their arrangements with Chelsea for three months after Abramovich was sanctioned.

The Premier League have shown clubs significant leeway in the past, with Everton understood to have successfully argued that the depression of the European transfer market caused by the pandemic cost them tens of millions of pounds in lost revenue in 2021, although they were charged last week for breaching spending limits in the period ending June 2022.

Chelsea will have huge problems complying with the rules next year even if this season’s accounts are signed off, as the club have spent £553m on new players since the takeover was completed. 

In addition they are also facing the loss of around £80m in Champions League revenue as they are unlikely to qualify for any European competition, while their current league suggesting they will miss out on significant Premier League prize money, which is worth around £2m-per-place.

Chelsea’s financial predicament is illustrated by the fact that they were put on a watchlist of clubs in danger of failing UEFA’s Financial Fair Play regulations last September, although that will not be relevant if they are not in Europe.

Chelsea had to operate under a special licence after Roman Abramovich was sanctioned on March 10

Chelsea had to operate under a special licence after Roman Abramovich was sanctioned on March 10

The licence was lifted when Todd Boehly's takeover of the club was completed on May 28

The licence was lifted when Todd Boehly’s takeover of the club was completed on May 28