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Article continues belowArticle continues belowArticle continues below<script type="application/json" data-placement="fcplayer-semantic">{"type":"fcplayer-semantic","data":{"embedCode":"//cdn.fcp.codes/embed-code-template/embed-code-template.js#SEMANTIC_5704afb8-c10b-4ba5-9cb4-d7fb6098ef90"}}</script><ul><li>Chelsea on UEFA's "watchlist"</li><li>Blues struggling to meet “football earnings” rule</li><li>Any sanction will be applied after this season</li></ul>

Why Chelsea are at serious risk of breaching UEFA's financial rules - explained

Conference League

FC Astana

Chelsea

The Premier League has allowed Chelsea to register the sale of <a href="https://www.goal.com/en/lists/chelsea-bizarrely-sell-hotel-76m-avoid-points-deduction-disastrous-financial-results/blt80bf92c53dff9bef" target="_blank">two hotels to a sister company for £76.5 million</a> ($101m) and the transfer of ownership of the women’s team to the club’s parent company. However, UEFA has made it clear that such transactions are not permissible under its financial rules. Each case will be assessed individually by UEFA’s independent panel, but the overarching message is that these kinds of financial manoeuvres will not be tolerated.

WHAT HAPPENED?

According to <a href="https://www.thetimes.com/sport/football/article/chelsea-uefa-financial-rules-football-bff0b5znw" target="_blank">The Times</a>, any sanctions resulting from a breach of UEFA’s financial rules would not impact Chelsea's participation in this season’s Conference League but could be enforced before the next season begins. <a href="https://www.goal.com/en/news/chelsea-pay-uefa-8-6m-settlement-incomplete-financial-reporting-roman-abramovich/blt6fc86b28cd09d9d9" target="_blank">UEFA’s Club Financial Control Body has a range of penalties</a> at its disposal, from issuing warnings or fines to imposing more severe measures, such as excluding a club from European competitions. A historical example of this is AC Milan’s one-year ban from European football in 2018, which was the result of multiple Financial Fair Play (FFP) breaches.

THE BIGGER PICTURE

In an interview with The Times, Kieran Maguire, a football finance author, said: "Chelsea’s position in terms of compliance with UEFA's Financial Sustainability Rules could be more than challenging given that UEFA are not as flexible when it comes to real estate sales to related or associated parties. This could also apply if the women’s team has been sold to another part of the Clearlake-Boehly empire.”

WHAT HAS BEEN SAID

Chelsea’s challenges are further compounded by UEFA’s more rigorous financial rules compared to the Premier League. The new <a href="https://www.goal.com/en/lists/chelsea-snub-europa-conference-league-carabao-cup-liverpool-mauricio-pochettino/bltbf4254509b12940e" target="_blank">“football earnings” regulation</a> provides little margin of error to the clubs as they can book losses of just €40m (approximately £34.5m) over two seasons (namely the 2022-23 and 2023-24 seasons). This is far more rigid than Premier League's upper limit which allows a club to post a £105m ($138.5m) loss over three years.Chelsea reported an £89.8m ($118m) loss for the 2022-23 season, exacerbated by the lack of Champions League income. The numbers are even more alarming given the club have continued to spend heavily this summer as well, further straining their financial position. Todd Boehly and Co. need to be more vigilant as they have been on UEFA's watchlist since September 2022, alongside 19 other European clubs. Yet the governing body have not come down with sanctions due to various Covid-related allowances. But things could change next season if Chelsea make it to a European competition after a major squad revamp under Enzo Maresca.

DID YOU KNOW?

As UEFA continues to tighten financial controls, Chelsea must find a way to navigate these challenges. Although their participation in this edition of the Conference League remains safe, the future does not look bright as the governing body might deliver a severe punishment for breaching financial regulations.

WHAT NEXT FOR CHELSEA?

Why Chelsea are at serious risk of breaching UEFA's financial rules - explained | Goal.com Uganda

Chelsea are facing a serious challenge in complying with UEFA’s stringent financial regulations after the European body modified its rules.