Chelsea booked the highest pre-tax loss in English football history in the 2024-25 season, per data released by UEFA.
The European Club Finance and Investment Landscape report, issued annually by the governing body, includes the 10 clubs with the highest losses in a given season.
The west London side topped — or bottomed — that cohort last season, but it is the scale of Chelsea’s loss which stands out. In their third full season under the ownership of a consortium headed by Clearlake Capital and Todd Boehly, the club booked a €407million (£342m) pre-tax deficit.
Only Barcelona’s €555m loss in 2020-21 has ever exceeded that scale of deficit in European football, and that was a year impacted by both the Covid-19 pandemic and the return of Joan Laporta to the role of president, with the Catalan side subsequently choosing to record significant one-off costs in that financial year.
UEFA’s report does not provide full details of individual club finances, so the exact make-up of the record loss is unclear. When contacted by The Athletic, Chelsea did respond to requests for comment.
Chelsea have carried significant operating losses in recent years, topping £200m in each of the three seasons before last, as declining revenues combined with significant cost increases.
One source with knowledge of the club’s dealings, speaking on the condition of anonymity to protect relationships, offered that Chelsea’s huge loss last season was, like Barcelona’s before them, driven by significant non-cash, accounting entries. These, the source said, included player value write-offs (whereby Chelsea deemed the player’s book value unlikely to be recovered, and so impaired that value in their books), as well as other asset write-offs. The make-up of those assets is unknown.
Further, the source cited one-off cash items which negatively impacted Chelsea’s 2024-25 figures. Those included the €31million (£27m) fine levied by UEFA after Chelsea were found in breach of two of its financial rules last year.
The same source offered that the huge deficit was reflective of neither the club’s underlying operating performance nor how finances will look in the current and future seasons. The sentiment offered was that last season reflected a tidying up of historic issues, with several high-cost, one-off items booked into the same financial reporting period.
Getting a handle on Chelsea’s financial results in recent seasons has been made more difficult by the club engaging in transactions which land in the gaps between UEFA and the Premier League’s respective financial regulations.
The most high-profile of those included the internal sale of the club’s women’s team, and similar intragroup transactions covering two hotels and a car park.
But UEFA also applies more stringent rules when it comes to player trading. The governing body requires that clubs exclude deals which it deems akin to grossed up player swap deals, a category that Chelsea’s signing of Omari Kellyman from Aston Villa in June 2024, with Ian Maatsen going the other way, fell into.
Moreover, and like the Premier League this time, a rule change ahead of the 2023-24 season prevented clubs from spreading the cost of (amortising) a player’s transfer fee over a period longer than five years. Chelsea regularly sign players up to contracts longer than that, meaning there is a divergence between the amortisation figure — and thus the overall profit or loss figure — presented in their accounts and what is submitted to football’s governing bodies.
All of which is to say that Chelsea’s annual accounts may well show a different, lower loss than that detailed in the latest UEFA report. The latter, though, is the relevant figure for financial regulatory purposes on the European front.
So, will Chelsea face a punishment?
The huge 2024-25 deficit means Chelsea’s rolling three-year loss for UEFA purposes was €622m (£528m), an enormous sum and one which far exceeds the €60m loss limit imposed by UEFA’s Football Earnings rule, even after we deduct for allowable costs on youth teams and the likes. It should not, however, lead to greater penalties being imposed on the club.
As part of a settlement agreement entered into with UEFA last summer, it was agreed Chelsea’s 2024-25 Football Earnings deficit could be kept in line with “the projected deficit submitted in the business plan”. In other words, provided the loss remained at the level Chelsea signposted to and agreed with UEFA, the terms of the settlement agreement would be met. Sources say this was the case.
Chelsea’s return to the Champions League will increase their revenue (Glyn KIRK / AFP via Getty Images)
On the domestic front, The Athletic has previously estimated Chelsea could have lost £300million pre-tax in 2024-25 without breaching the Premier League’s profitability and sustainability rules (PSR). The figure detailed here would exceed that but, as outlined, the loss presented for domestic PSR purposes could differ from the club’s UEFA submission. In any case, sources say Chelsea did not breach PSR in 2024-25, so whatever loss was included in their Premier League submission, while still clearly large, fell kept Chelsea within their three-year rolling loss limit.
That source mentioned above, speaking with knowledge of Chelsea’s affairs, told The Athletic the club is confident it is operating in line with the terms of the settlement agreement and other financial rules, citing improved underlying performance and, among other things, significant player sales. Chelsea raised around £300m from outgoing transfers last summer.
The same source offered the view that the large 2024-25 loss was not representative of Chelsea’s finances moving forward and is instead the end product of a period of business rationalisation. The expectation is that Chelsea will comply with financial rules both at home and abroad, aided by revenues which will grow this season, not least because of a return to Champions League football. The Athletic estimates Chelsea have already earned £80m in prize money from the competition.
Under the terms of that settlement agreement, Chelsea are limited to a Football Earnings loss of just €5m in the ongoing 2025-26 season. Increased revenues — commercial performance has and should continue to improve, especially now a front-of-shirt sponsor has been found — alongside those player sales will help the club towards that goal and, as mentioned, the expectation is Chelsea will be compliant.
Even so, costs plainly remain significant, with the latest UEFA report detailing a wages-to-revenue ratio of 76 per cent, a higher level than is usual at one of football’s ‘bigger’ clubs. That size is reflected in the £231m operating costs the report details at Chelsea last season.
Those and the club’s wage bill reported to UEFA combined for a total cost of around £605m, against revenue of just £491m — and that is before including the costs of amortising player transfer fees, which stood at £190m in 2023-24 and will be higher in UEFA submissions. While the record pre-tax loss was worsened by one-off items, Chelsea still ran a large operating loss last season.
A clearer view on the club’s 2024-25 finances will not be available until the club’s accounts are filed at the end of next month.