Ownership change brings £50m cash windfall for Abramovich era Chelsea directors

By David Owen

April 10 – Chelsea’s new US owners made payments totalling nearly £50 million to former directors of the West London club for services relating to the protracted £4.25 billion sale that last year brought down the curtain on the trophy-studded but controversial Roman Abramovich era.

Details of the £49.75 million payments are disclosed in newly-published accounts for the year to end-June for the recently renamed corporate entity, Chelsea FC Holdings Limited.

The club, currently struggling in mid-table of the Premier League, ran up another large pre-tax loss, of £121.4 million, in spite of registering a substantial £123.2 million gain from player sales. This loss was somewhat lower than the previous year’s towering £155.9 million deficit. The latest operating loss was particularly eye-catching, at £242.4 million, up from £182.8 million for 2020-21.

A total of four Chelsea directors resigned during May and June 2022, as the new guard assumed command. These were, in chronological order, E.Tenenbaum, G.Laurence, M.Granovskaia and B.Buck.

The highest-paid director, who is not named, is said to have received just over £35 million in the 2021-22 financial year.

Directors’ remuneration aside from the £49.75 million mentioned above rose sharply to £5.86 million. This included £1.08 million in compensation for loss of office.

A “related party transactions” Note near the end of the accounts indicates that the club “facilitated payments through its payroll to certain former directors…and staff of £51 million…on behalf of Blueco 22 Limited”, the new owner. This is said to be “repayable by Blueco 22 Limited” and included in £159.1 million of amounts due from other group companies referenced in a separate Note.

The new accounts also make reference to various sums related to “ongoing legal matters”.

Note 5 alludes to £18 million payable in relation to unspecified ongoing legal matters; this is down from £24.1 million in 2020-21. The short-term creditors’ Note – Note 21 – states that £33.6 million of the nearly £213 million accruals and deferred income balance represents “amounts that are due to settle ongoing legal matters”. This is up from £16 million the previous year. Lastly, the related party transactions Note – Note 31 – explains that “within accruals is a net amount of £1.16 million payable with respect of a former director to settle an ongoing legal matter”.

A valuation of the playing staff led the club to conclude that an impairment of £76.7 million was “necessary when comparing the valuation to a net book value of £302.9 million”.

Since the latest year-end, the club has incorporated a new wholly-owned subsidiary in the US.

Currently sitting below local minnows Brentford and Fulham in the league table, Chelsea recently discarded manager Graham Potter after less than seven months in charge, and installed a former player and boss Frank Lampard as interim manager.

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