Page last updated at 12:16 GMT, Friday, 13 February 2009

Boss sackings add to Chelsea loss

Chelsea midfield player Deco is tackled
Any future Chelsea transfer spending will be funded by sales

Chelsea Football Club has revealed a 65.7m ($95m) loss for the financial year to the end of June 2008.

The amount includes a total of 23m in compensation paid to Jose Mourinho, Avram Grant and five coaches who left the club during the year.

However, it does not cover the sacking of Luiz Felipe Scolari, who was axed from Stamford Bridge this week.

The latest in a string of hefty losses will ultimately be borne by Chelsea's Russian owner, Roman Abramovich.

Continuing commitment

The BBC has learned that Mr Abramovich's investment in the club has reached 710m.

He has now changed part of that investment from an interest-free loan into shares in the club, as a sign of continuing commitment to Chelsea.

The move will also help defuse European criticism that Chelsea is a heavily indebted business, says BBC business correspondent Nils Blythe.

In another attempt to scale back its debt, the club is aiming to pay for any purchases this summer by selling players.

'Strong business base'

The club has also reiterated its intention "to require zero cash funding from the owner [Roman Abramovich] at the beginning of the financial year 2009/2010".

Chelsea chief executive Peter Kenyon added: "There is no doubt that the positive upward trends of turnover and the continued reduction in losses shows that Chelsea is building a strong business base to build on in what will be challenging times.

Like an investment bank Chelsea is taking a vow to live slightly less high on the hog
BBC business editor Robert Peston

"This is even more evident given that the results were adversely affected by the exceptional items."

He also said that any squad restructuring in the summer would be funded predominantly by sales, and that over the past five years the club had "consistently reduced our net transfer spend".

The BBC's business editor Robert Peston said Mr Abramovich and the club's executives were "doing what they can to transform Chelsea from a trophy asset that only a multi-billionaire could own into a something that might be describable as a business".

Our correspondent added: "And if that remarkable transformation were achieved, Abramovich could perhaps sell the club without suffering a humiliating loss and without leaving Chelsea as an over-mortgaged financial wreck."

Losses reduced

Of the 23m compensation paid to former managers and coaches, the bulk of the money was paid to Jose Mourinho.

His replacement, Avram Grant, lasted just eight months before leaving the club to be succeeded by Scolari - who reports suggest could walk away with 7.5m having been only seven months into a two-year contract.

The club's loss is slightly better than the 74m lost last year and 80.2m in 2006/7. It is also some way short of the record 140m announced by Chelsea in 2004/2005.

The club came fifth on the list of the world's richest clubs in 2007/8 - behind Real Madrid, Manchester United, Barcelona and Bayern Munich.

However, Deloitte's Football Money League is based on revenue and does not take debt into account.

Some European clubs have been critical about the level of debt that some leading English clubs, such as Chelsea and Manchester United, are carrying.

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