Chelsea may have an outstanding recent domestic win ratio, a team filled with talented players who play open attacking soccer and be one of the richest clubs in world soccer, but the owner Roman Abramovich has one major problem to fix. The main issue facing Abramovich is that despite his vast personal wealth and his willingness to spend it on his club, each season Chelsea finish it is more than likely to see a major debt accrued on the clubs balance sheet.
While Chelsea’s massive soccer merchandise sales may bring in revenue, as will the sale of a player or two away from the club, sponsorship deals and prize money, the problem 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 need to find a long-term solution to their debt.
The process of reducing the clubs debt began last summer when several high-earning first team players were permitted to leave the club for new pastures. 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 chose not to replace them with renowned stars, instead promoting youngsters from within the club. Even this reduction of the playing squad and a higher reliance on youth players has not been completely effective in stopping the club’s constant tumble into debt.
Mr Abramovich’s main objective for Chelsea is that they become not only the biggest name in English soccer, but European and World Soccer too. Depending on your view, this title is currently held by either of the La Liga giants Real Madrid or Barcelona, or Chelsea’s English rivals Manchester United, and the cause of Chelsea being unable to compete with these three giants of the beautiful game is due to two key factors: The size of Stamford Bridge and the gate revenue the stadium generates and the clubs worldwide apparel in terms of merchandising.
The most obvious issue to address; the size of the stadium and the revenue it brings to the club, could well be set to be addressed shortly. Stamford Bridge may, if the whispers are true, soon be part of Chelsea’s decorated past, rather than their future. Specific details remain unknown but there is fresh talk that Chelsea may be moving in the near future to a shiny new, 60,000 capacity stadium which will then become the foundation for the club attempting to becoming truly the largest club in world.
A new ground, purposely built and with a much improved seating capacity, will have an immediate effect on Chelsea’s financial situation. A higher capacity, if the fans can fill it, will mean Chelsea turning over far more a year from spectators. The increased revenue from a new ground will be incredibly beneficial in helping the club follow the new set of rules the UEFA wants imposed in time for the beginning of the 2012 season.
A new ground will also allow Chelsea to sell the naming rights of the stadium for a large sum of money, as neighbors Arsenal decided to when they chose to name their own new stadium after main sponsors Emirates Airlines.
A new stadium would also have an effect on increasing the merchandising sales that the club makes as the new ground would give the club increased publicity, particularly in the potentially large customer markets in Asia and America.
The long term success of Chelsea hinges on the owner investing his time and money not just in players, but in the foundations of the club. Making the next step towards becoming the world’s biggest club is simple; Chelsea must design and build a flashy new stadium that matches the sky-high goals of their owner and fans and only then will they truly be considered amongst the world’s elite soccer clubs.