What Does Chelsea's £1 Billion 'Debt' Mean for the Club's Future?

what does debt consolidation mean

Comments

Unsurprisingly — after 11 seasons, 13 major trophies and 10 managerial appointments — transforming a good-not-great club into one of Europe's superpowers has proved an expensive undertaking.

Mike Hewitt/Getty Images

Though sagacious in the transfer market, Chelsea has required more interest-free money in the past 12 months.

There is, however, one slight issue. According to Wallace's article, from 2014's Fordstam report to 2015's, Chelsea's loan borrowings have increased by £57 million, this despite prudent spending and shrewd selling.

The 2011/12 campaign saw FFP implemented, and the droves of money flowing into upstart clubs across Europe dried up almost overnight (see AS Monaco). Chelsea was fortuitous, its transformation had just enough time to withstand the regulations, and the Blues proceeded to win the FA Cup and UEFA Champions League in FFP's inaugural year.

Alex Livesey/Getty Images

In somewhat ironic fashion, Chelsea won the Champions League the year financial fair play was instituted.

It is no longer enough for Abramovich to transfer money from pocket to pocket, Chelsea can only spend what it produces —that makes eliminating Chelsea's mounting loans (which have been around since before Abramovich) problematic.

Number of major domestic and European trophies won post WWII: #CFC —19 Arsenal —19 Tottenham—14

Were Chelsea's model focused solely on profit (e.g. Arsenal Football Club, etc.), making £1 billion disappear would take time, but it would not be an improbable task.

The club, though, is

not run for profit — it exists under Abramovich to win trophies.

Clive Rose/Getty Images

Chelsea is not in operation to make Roman Abramovich money (he has enough), it is run to win trophies.

In one of his first interviews after buying Chelsea, the then-36-year-old Russian sat down with editor of BBC Business Jeff Randall. When asked if buying the football club was about making money, Abramovich responded:

No, it's not about making money.

I have many much less risky ways of making money than this. I don't want to throw my money away, but it's really about having fun—and that means success and trophies.

From the outset of Abramovich's reign, intentions were clear: win at any cost. Partnering himself with like-minded individuals, such as manager Jose Mourinho, the billionaire has certainly created what he intended.

But where does this leave Chelsea in the future?

Clive Mason/Getty Images

Even as the old guard are phased out, Chelsea's core looks built for at least another half-decade.

Via Forbes . Chelsea is worth £868 million/$1.37 billion, but sports entities are often sold for over market value. Any person or conglomerate wishing to purchase the club from Abramovich would unquestionably be opulent and intend to carry the Blues' burgeoning reputation as an English giant forward.

In the meantime, Chelsea supporters should focus on the club's silverware count and not too much on spreadsheets.

Source: m.bleacherreport.com

Category: Bank

Similar articles: