Chelsea suffers valuation blow but the figures are on par with the club average.
This was a season full of extreme difficulties for all the clubs in the game. The clubs were facing financial difficulties because of a lack of revenue streams. Chelsea was the top spender in the last window which is also why the organisation took a big hit financially.
According to the report presented by KPMG (one of the big four accounting firms in the world), Roman Abramovich saw a fall of £298m in the past 12 months in Chelsea’s Enterprise Value.
Enterprise value (EV) is a measure of a company’s total value. However, Chelsea are not alone in this. All of the clubs in the top standings have seen negative numbers in the 2020-21 season.
Such was the drastic effect of the Covid pandemic. Chelsea are among the 5 English clubs in the top 10 list along with Manchester United, Liverpool, and Manchester City, and Tottenham.
The good thing for Chelsea is their decline percentage is at par with the average year-on-year fall of the top 32 prominent clubs in the pandemic. As of now, Chelsea stands at the 7th position in the top 10 list.
The Blues are just one spot below Manchester City whom they will face in the Champions League final come Sunday. This will be a good opportunity for the club to close the gap between them and Manchester City.
Let’s dive a bit deeper into the financial performance of Chelsea
According to the findings consolidated by football London, Chelsea have managed the situation quite well by banking on revenue from sale of key players. The main component causing the EV to decrease was Operating Revenues which was down by 9%.
“However, the London club managed to improve their profitability, thanks to cost reduction and the €162m (£140m) profit on players’ disposals, mainly associated with the sale of Eden Hazard and Alvaro Morata to Real Madrid CF and Atletico de Madrid, respectively.”
Liverpool is the only English club to have a lesser fall % in EV than Chelsea. Arsenal has been falling down the order since the past few years and is now at the 11th position. Tottenham on the other hand has been doing well since 2016 and moving up the order.
8 teams from the Premier League now feature in the top 20 rankings. Leicester and Everton sit and the 18th and 20th positions respectively. Pretty impressive numbers for the English league as they occupy more than a third of the total spots in the top 20 rankings.
“The aggregate Enterprise Value of the 32 most prominent European football clubs has dropped by 15% year on year (-£5.26bn), down to €33.6bn (£29bn), a value slightly higher than the 2018 level,” KPMG said.
Overall this has been a tough stretch for all clubs involved in the top tier and even more so for the lower tier clubs. However, things look positive as the economy starts to unfold. Boris Johnson might allow fans to completely come back starting mid-June this year.
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