Soccer Rules

Chelsea may have an outstanding recent domestic record, a squad packed with outstanding players who play open attacking soccer and be one of the richest clubs in world soccer, but owner Roman Abramovich has one large problem to fix. The main issue facing the Chelsea owner is that despite his vast personal wealth and his eagerness to spend it on the team, each year Chelsea finish it is likely to see a major debt accrued on the clubs balance sheet.

While Chelsea’s massive soccer apparel machine may bring in cash, as will the transfer of a player or two away from the club, sponsorship deals and prize money winnings, the fact is that Chelsea’s overhead far exceeds the revenue generated and so far it has been the owner that has covered these debts. UEFA’s uptake of tough new rules regarding the eligibility of teams entering their competitions with reference to being financially profitable, means that Chelsea have a somewhat pressing need to find a long-term answer to their debt.

The process of reducing the clubs debt started last summer when several high-income first team players were allowed to leave the club for pastures new. Players like Michael Ballack, Joe Cole and Deco were not offered new contracts while Ricardo Carvalho was transfered to Real Madrid and manager Carlo Ancelotti did not replace them with established stars, instead promoting youngsters from within the club’s junior ranks. Even this trimming of the playing squad and more reliance on younger players has not been fully effective in stopping the club’s annual tumble into debt.

The initial level of investment made by owner Abramovich was targeted at helping Chelsea fast-track to becoming the most known club not only in the Premier League, but also European and world soccer. Depending on your personal opinion, this title is currently held by either of the Spanish giants Real Madrid or Barcelona, or Chelsea’s English rivals Manchester United, and the reason why Chelsea have been unable to match these three giants of the world game is down to two main reasons:

• The seat capacity of Stamford Bridge and the gate revenue the stadium generates.
• The clubs worldwide apparel in terms of merchandising.

Addressing the issue with the stadium capacity and revenue generating capabilities of Stamford Bridge is something which Roman Abramovich may consider reviewing sooner, rather than later. Stamford Bridge may, if talks are true, soon be part of Chelsea’s past, rather than their future. Soon, Chelsea fans may be watching their home games at a 60,000 capacity purpose built stadium near the current Stamford Bridge and it is hoped that this new stadium will generate the income and give the club the renown it needs to truly rival the world’s soccer elite.

A new stadium, designed for soccer and with a much improved seating capacity, will have an immediate effect on Chelsea’s financial health. The increased revenue from the larger ground would, provided the club can sell the additional tickets, generate considerably more revenue for the club during each home game. In turn, this added income will help reduce the strain the club endures from its consistent annual debt and means that the club is better prepared to meet the new UEFA guidelines, which are coming into effect in 2012. Another bonus financially is that Chelsea could choose to sell their stadium naming rights to the biggest sponsor, as other teams such as Arsenal did when they named Emirates stadium.

Merchandising sales could also be increased by a new stadium, more seating means more fans and this will have a continuing effect in other unused markets, hopefully those in East Asia and North America.

For Chelsea to be successful on their long term goals, the right time is now to spend their owners cash on the club’s infrastructure, instead of on player wages and huge transfer fees. Making the next step towards becoming the world’s biggest club is simple; Chelsea must develop a flashy new stadium that matches the sky-high ambitions of their chairman and fans and only then will they truly be considered amongst the world’s elite soccer clubs.