More helpful with spreadsheets than Phurry
- May 13, 2010
As someone who kind of does this for a living, I have no idea where this logic comes from. Let's say Roman has put in c. $2bn into Chelsea, maybe its a few hundred million here or there, but what's that between billionaires.As for where the money comes to fund transfers you seem to suggest that other clubs don’t generate their own revenue whilst no other PL club is able to achieve the levels that Man Utd do but as I pointed out the other day in terms in terms of value even if you add up every £ put into Chelsea by RA including the purchase from Bates alongside-cash injection to CFC
holding company to support losses and based on Forbes valuation then RAs investment, should he sale CFC, would show a significant profit.
Let's say I'm an entity with some capital, let's say for simplicity I have $2bn to play with, and I'd like to invest in such a way as to make good returns. Say 5% which I could probably get through various financial instruments. That's $100m of pure returns each year.
Chelsea Football Club has managed to come close to that exactly once in its history. When exceptional player sales managed it. Operating profits - the bit that is most like a 'normal' business are huge losses. According to Swiss Ramble, averaging over $60m loss each year over the last 10 years (2011-2020).
And Chelsea is only able to generate the onfield success and therefore revenue it does because Abramovich subsidises it. If it had to stand on its own to two feet as a going concern, it could not afford to buy Pulisic, Ziyech, Havertz etc and then be talking about Haaland. It would not have been able to buy Hazard - the only reason its ever been able to post decent profits.
There's some weird fallacy with the sugar-daddy clubs where fans justify the owners 'investment' due to the appreciation of the asset. But a PSG, or City or Chelsea is only worth these valuations because its owners are losing money on it. None of these clubs can support the level of spend they've been doing. No club in world football can. Look at Barcelona, or Madrid.
And it's not a go at Chelsea in particular - I posted very similarly about who could buy United. The fact is that football clubs today are not a good investment. You'd be better any number of financial instruments or other hedging products.
United was an excellent investment by the Glazers because they paid exaclty zero dollars for it. Therefore $20m a year of dividends is wonderful. But if someone had to pony up our 'market value' of c. $3bn for it, they'd want returns that no football club can deliver.
And so, we arrive at today, where the only clubs 'succeeding' are those that can lose money over the long term. The whole model is built on requiring outrageously rich people to subsidise the entire industry for kicks/sportswashing. It's stupid.