Premier League clubs reacted with exasperation after seeing that Chelsea eased their financial position with the £76.5m sale of two hotels to a sister company in a deal that appears to have helped the club avoid a breach of profitability and sustainability rules (PSR).
Chelsea’s accounts, published last weekend, revealed the club made a loss of £89.9m in the last financial year. That figure would have been £166.4m without the hotels sale from Chelsea FC Holdings Ltd to Blueco 22 Properties Ltd. Both companies are subsidiaries of Chelsea’s holding company, Blueco 22 Ltd.
The move to sell the Millenium and Copthorne hotels, and their car parking, was not blocked by the league. But Chelsea’s ability to exploit a loophole in the rules has not gone down well with everyone. An executive at one top-flight club was incredulous after learning of the deal and another club were left with “raised eyebrows” and were said to have read the accounts “with interest”.
There was a sense of resignation at another club, where a figure said that the deal came as “little surprise”.
Under the PSRs Premier League clubs are not permitted to have losses of more than £105m over a three-year period. The league has sought to deal heavily with PSR breaches this season. Everton received their second points deduction of the season last week – the appeal board handling the appeal said on Friday it intended to announce the outcome before the end of the campaign – and Nottingham Forest were docked four points last month. Forest’s appeal against their punishment will be held next week.
Chelsea have spent more than £1bn on signings under their Todd Boehly-Clearlake Capital ownership but are confident they will continue to comply with the regulations. They are likely to need to sell players to raise funds this summer.
The hotel sales were yet to be assessed as “fair market value” under the league’s associated-party transactions rules, according to Chelsea’s accounts. Any decrease in the £76.5m valuation could place Chelsea’s finances under renewed pressure. The accounts were signed off in December 2023, six months after the hotels deal took place.
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Chelsea and the league have not confirmed whether a fair-market assessment has been concluded. It has been pointed out by Chelsea that they appointed two independent valuers to assess the club’s valuation of the hotels and that no issues were raised.