Chelsea reports record losses

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Inside of a few weeks, the Premiere League club revealed it suffered the largest financial losses in football history and were accused of improper player transfer dealings, developments that the London club tried to minimize. The club’s pre-tax losses rose by 60 percent in the financial year ending 30 June 2005, up from GBP 80 million to GBP 140 million. The club explained those figures were inflated because it included one-time buyouts to former players Adrian Mutu – dismissed from the team because of a positive drug test – and Juan-Sebastian Veron. Combined the players cost the club nearly 23 million GBP.

In addition, the club terminated its sponsorship agreement with Umbro for GBP 25 million. The figures do not include a new 10-year, GBP 100 million deal with adidas and a GBP 50 million shirt sponsorship deal with Samsung.

“These figures reflect the continuing restructuring of the business which we began in 2003-04,” Club chief executive Peter Kenyon told the BBC. “The overall loss increase is, in the main, down to some exceptional items that were necessary in order to help us achieve our strategic business aim of break-even by 2009/10. In simple terms we have taken some pain now for long-term gain.”

Chelsea was also forced to explain charges of misconduct filed by Premiere League club Manchester United concerning Nigerian midfielder John Obi Mikel. Mikel originally signed with Manchester United, but backed out of the deal claiming he was pressured to sign the contract. Later he said his true desire was to play for Chelsea. A letter from Manchester United to FIFA outlining their complaint was leaked to the media. “Chelsea is aware that at least one copy of a private and confidential letter from FC Lyn Oslo and Manchester United to FIFA dated May 18, 2005, that made unfounded allegations against Chelsea in the case of John Obi Mikel, has been leaked to the media,” Chelsea said in a website statement. “It is outrageous that private and confidential correspondence relating to proceedings before FIFA has been deliberately leaked in this way in an attempt to smear Chelsea's name and, more importantly, to undermine an active FIFA process and pressurise Mikel.” Mikel has since returned to his original club, Norway first-division club FC Lyn Oslo.