The recent sale of two hotels by Chelsea for £76.5 million to a sister company has been given the green light by the Premier League. This deal was a strategic move by the club to ensure compliance with the division’s profit and sustainability rules (PSR). The sale of the Millennium and Copthorne hotels, as reported in the club’s accounts for the 2022-23 financial year, helped offset a significant loss of £89.9 million.
The transfer of ownership of these two properties from Chelsea FC Holdings Ltd to BlueCo 22 Properties Ltd, both subsidiaries of Chelsea’s holding company, BlueCo 22 Ltd, raised some eyebrows in the football community. While UEFA and the English Football League have restrictions on such transactions, the Premier League’s regulations allowed for this sale to proceed. This was contingent upon an assessment of the “fair market value” of the hotels, which has now been completed.
Despite the clearance from the Premier League, there were reports of skepticism from some of Chelsea’s rivals regarding the validity of the sales. Any complications in this deal could have sparked renewed scrutiny over the club’s financial practices and their adherence to the PSR rules. The concern lies in the overall financial health of the club and whether they can sustain compliance with the set limits on losses over a three-year period, which currently stands at £105 million.
A source close to Clearlake Capital, the majority owner of Chelsea, has expressed confidence in the club’s ability to meet the requirements of the PSR. Chelsea believes that they have operated within the boundaries of these rules in previous seasons and are well-positioned to do so in the upcoming accounting period of 2024-25. This assurance is crucial in maintaining trust and credibility among stakeholders.
Amidst concerns raised by some clubs, the Premier League deliberated on the possibility of banning similar transactions to sister companies at their Annual General Meeting in June. However, sources indicate that the proposal did not garner enough support, with only 11 clubs backing the ban. A minimum of 14 votes was required for the rule to be altered, highlighting the complexities of enforcing stricter financial regulations in the league.
Chelsea’s £76.5 million hotel sale has been given the seal of approval by the Premier League, signaling a temporary resolution to the compliance issue. However, the underlying questions around financial transparency and adherence to regulatory standards persist, urging clubs and authorities to maintain vigilance in safeguarding the integrity of the game.