FootBiz newsletter #69: Financials deadline day, Man City legal spend and £200m for Chelsea Women's team

Yesterday was deadline day for English clubs to file their accounts for the 2023/24 season, which explains why you may have seen a flurry of financials clogging up your feeds.

Eight Premier League clubs (of that period) began Monday due to file: Aston Villa, Chelsea, Crystal Palace, Everton, Luton Town, Nottingham Forest, Sheffield United and Tottenham Hotspur.

Some chose not to file in time and just take the fine. That is a fairly painless way to go about things, though Palace (who didn’t publish theirs yesterday either) were threatened with the dissolution of the club in 2018 after failing to file or respond to requests from Companies House.

For each of those clubs who actually did publish there was something of interest to dig into.

For Aston Villa, who are seemingly desperate to spend as much money as possible while raging against regulations that try to prevent them from doing so, it was about how much they had lost. The answer was £85m. They should be fine under Premier League PSR rules but may struggle more when UEFA come to take a look at their books.

For Chelsea, there was so much of interest that it has its own separate section below the table of contents.

This season’s surprise package, Nottingham Forest, sold players well enough to post a £12m pre-tax profit but still posted an underlying loss of £73m - which serves to highlight how much Champions League revenues would help the club. Owner Evangelos Marinakis continues to plunge money into Forest them, he put £98m into the club in the form of loans that have since been converted to equity and do not have to be repaid. This is in addition to £87m in 2022/23. Forest are flying, yes, but their success has come at considerable cost to their Greek owner and is evidence of how deep your pockets need to be to own a Premier League club.

Everton announced that they had reduced their loss from £89m last year to just £53m this year. It was the seventh consecutive year of losses, totalling around £570m, which is even further evidence of how deep your pockets need to be to own a Premier League club. While Everton were deducted eight points for PSR breaches last season, they should be clear of any future danger once they move into their new stadium in the summer.

Tottenham made a big song and dance about crossing the £500m revenue threshold last year, and though they suffered a slight dip in 23/24 they remain above that half-billion line. Their pre-tax loss was £29m and an underlying loss of nearly £60m despite some healthy metrics, like a 42% wage:turnover ratio which is one of the best in English football.

But this is a bit of a dense, financial start so let’s get to the newsletter….

Table of Contents

• Chelsea women’s £200m sale

• City pay their lawyers more than Haaland

• M&A Murmurs

• Spotlight on Newcastle influencer deal

• Extra transfer window confirmed

• Club World Cup play-off

• Did Barca field an ineligible player?

• Reading fate up in the air

• Prosecutors investigating San Siro deal

• Overseas North London derby confirmed

• Brazil seek new coach for World Cup

• Sheffield Wednesday hit crisis mode

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Chelsea women’s £200m sale

News from Silicon Valley this week, where Elon Musk sold one of his companies to another and banked an artificial profit entirely of his own making.

Of course, no such thing could happen in footba… hold on, we are getting some news from Chelsea.

Ah yes, Chelsea’s consolidated financials were published yesterday and the big piece of information everyone was waiting for was how much BlueCo had paid to buy Chelsea FC Women from themselves.

The answer: £198.7m.

That shuffling around of assets as the PSR deadline approached last year (following from 2024’s hotel and car park sales) helped turn an underlying loss of £70m (down from last year’s £90m, to their credit) into a net profit of £129.6m after tax for the 2023/24 season.

Chelsea have now banked around £275m of profit from intra-group transactions to subsidise heavy losses at the operating level.

On top of selling the women’s team and property to conform to PSR rules (successfully, I may add, though UEFA did not accept these as part of their own FFP calculations) Chelsea also reported profits of £150.2m on player sales, including academy graduates Mason Mount and Ian Maatsen.

It is difficult to make that number make sense, but we will have to wait until the full accounts are released as all we are currently able to access is a news story on the club website. 

How would CFCW’s £198.7m sale compare to other transactions?

Well that enterprise value (EV) would be over 20x revenues for the preceding financial year (2022/23). The closest equivalent to Chelsea in terms of recent transactions would be Michelle Kang’s purchase of OL Feminin, also a leading club domestically and continentally, which transacted at 7-10x revenues. Lyon are the most successful team in Champions League history, however.

Even if you look at the most recent transactions in the NWSL you won’t find anything approaching justification for that valuation either.

The Seattle Reign's $58m sale in 2024 was just under 7.5x EV/revenue ratio, while the San Diego Wave's monster $113m deal in 2022 still was only 7.1x.

We await more details, and with real estate assets stripped out of the Chelsea deal perhaps it will make a little more sense.

But there are plenty of people keen to pick over Chelsea’s full results when they’re released.

City pay their lawyers more than Haaland

Manchester City spent over £30 million on legal fees last season, with the vast majority used in defending themselves against the Premier League’s 130 charges of Financial Fair Play breaches.

The club’s legal bill, which is expected to be even higher this season, was around two-thirds of the Premier League’s spending on lawyers over the same period.

In addition to prosecuting City over FFP and defending themselves against the club’s legal challenge over Associated Party Transaction rules, the Premier League also charged and docked points from Everton and Nottingham Forest for profit and sustainability rules breaches during the 2023/24 season, as well as charging Leicester for a PSR breach.

City’s legal spending of £30,596,000, an increase of £10.7m on the previous year, is detailed in the accounts of parent company City Football Group. The club’s FFP defence is being led by Lord Pannick KC, who it has been reported charges around £5,000 an hour for his services, while their other lawyers cannot be cheap either as their total costs equate to almost £600,000-a-week, more than Erling Haaland’s wages.

The CFG accounts attribute the legal costs to “expenses incurred by City Football Group Limited on behalf of Newton Investment and Management". NIM is the Abu Dhabi-based company through which Sheikh Mansour owns his majority stake in CFG, which in turn owns City and other clubs.

A number of other top-flight clubs have queried the rise in the Premier League’s legal costs, although given the extent of City’s spending they will not be reduced any time soon.

M&A Murmurs

Liverpool’s owner Fenway Sports Group (FSG) have joined Qatar Sports Investment, the owners of Paris Saint Germain, in expressing an interest in buying Spanish club Malaga. The Athletic’s David Ornstein revealed FSG’s interest in the La Liga 2 club last weekend after they visited Malaga last month.

FSG appointed former Liverpool sporting director Michael Edwards to a new role as chief executive of their football operation last year, with a brief to set up a multi-club operation. Talks with Bordeaux failed to progress last year which led FSG to refocus their attention on Spanish clubs, with Levante, Elche, Espanyol, Getafe and Valladolid all under consideration.

Malaga are valued at around €100m (£83m) with majority shareholder Sheikh Abdullah Al-Thani open to selling his 51 per cent stake. The rest of the club are owned by Spanish hotel and real estate group, Blue Bay.

QSI are understood to have held talks with both parties, but have yet to make a formal bid.

Leyton Orient are close to being sold to American TV executive David Gandler, who has offered a package rising to £18m to buy 70 per cent of the League One club, according to The Guardian.

Current owner Nigel Travis would retain a significant stake in the club and stay as chair as part of the deal, which also includes plans to build a new multi-sport stadium in east London.

Gandler has moved for Orient after selling his 17 per cent stake in Paris FC last October as part of a takeover of the Ligue 2 club by the billionaire Bernard Arnault, France’s richest person. The New York-based Gandler is a former Warner Bros executive, and the founder and chief executive of fuboTV, a streaming platform that broadcasts European football in the US, Canada and Spain.

Orient have been on the market for over a year, though if completed soon that would represent a relatively quick transaction by EFL standards, particularly compared to the ongoing sales’ processes at Reading, Tranmere and Preston.

Travis has taken Orient from the National League to the brink of the League One play-off positions in seven years in charge, but has concluded that outside investment is needed to achieve his aim of establishing them in the Championship.

Yeovil Town owner Martin Hellier has said that he plans to sell the club after online abuse from fans became too much.

Hellier took over the Somerset club a couple of years ago and bankrolled a return to the fifth tier after winning the National League South by 11 points but at a deficit of nearly £3m.

The Glovers spent 16 years in the EFL from 2003-2019 but will now need to find a new owner willing to fund their return to league football.

"I fully intend to sell the club and leave as soon as a suitable buyer is found," Hellier said in a statement on social media.

"It's simply not worth losing the money to be abused and my children abused and so on.

"I would ask in the meantime that you stop the endless online harassment and abuse. You've done enough, it's worked."

Hellier has made something of a habit of taking fans on who have been critical of his reign, resulting in a number of needlessly combative social media posts.

Spotlight on Newcastle influencer deal

Plenty of eyebrows were raised last week as Newcastle United content creators started plugging celebratory trips to Saudi Arabia as a way of “carrying on the party” after the trophy parade for the club’s Carabao Cup win.

TikTok creator Thogback, who boasts nearly half a million followers, posted arguably the most inauthentic and puzzling video of the lot but there is some strong competition.

The Magpie Channel’s TikTok (which appears to have gone missing but was recorded here) has far more of an advert feel to it.

Another Newcastle United influencer, Adam Pearson, published a painful video and added a link in his bio so you can book the Southall Travel trip to Saudi Arabia.

The best quote from that latter video has to be:

“For those of you watching who want to continue the after party, get yourselves over to Saudi Arabia. enjoy the culture, learn more about country and of course gets yourselves over the Boulevard World.

“It's a chance as well to learn a lot more about the background of Newcastle United.

“And of course it's easy to fly there, there are plenty of direct flights options in the UK. Visas are available online and on arrival from the United Kingdom."

The basic premise of influencer marketing is that a creator seamlessly integrates a brand’s message with the sort of content that subscribers are accustomed to seeing, thus lending more authenticity and cachet and allowing the brand to hit the precise audience they were targeting.

If Visit Saudi think this qualifies as authentic fan content, it might be time to find a different influencer agency.

Extra transfer window confirmed

The Premier League has announced a special transfer window in the first 10 days of June to allow Chelsea and Manchester City to add new players before the Club World Cup.

FIFA only allows the window to be open for 16 weeks per year in any country, with four of those reserved for January.

England’s new mini-window from June 1-10 would allow City midfielders Kevin De Bruyne and Ilkay Gundogan to potentially sign short-term extensions to allow them to play in the Club World Cup in its entirety, given their contracts expire on June 30, but also to sign players from elsewhere.

The window will close for five days before reopening on June 16.

Additionally, FIFA agreed to open a registration window mid-tournament, from June 27-July 3, so clubs can register additional players for the knockout stage.

Club World Cup play-off

FIFA are planning a play-off between MLS side LAFC and Liga MX’s Club America to determine who will replace Club Leon in the Club World Cup. The winners would receive a huge prize of at least $9.55m for the playoff and competing in the group stage this summer, and that is just the base participation fee FIFA will give to teams from the CONCACAF region with more unlocked for progressing through the competition.

Club Leon were removed from the tournament by FIFA last week due to the club sharing ownership with fellow Mexican side Pachuca, who have also qualified. Both clubs are owned by Grupo Pachuca, which also has stakes in Spain’s Real Oviedo among other clubs. Article 10 of FIFA’s regulations for the 2025 Club World Cup states: “No individual or legal entity may have control or influence over more than one club participating in the competition,” and that “If two or more clubs fail to meet the criteria … only one of them may be admitted to the competition.”

Club Leon are appealing their expulsion at a Court of Arbitration for Sport hearing in Madrid on 23 April, but FIFA are already taking steps to replace them.

Costa Rican club Deportivo Alajuelense reported the dual ownership issue to FIFA and have a claim to replace them as the highest-ranked non-Mexican and non-American side in CONCACAF, but appear to have been overlooked.

LAFC lost the CONCACAF Champions League final to Leon, justifying their inclusion in the playoff, while America are the highest-ranked team from the Mexican federation.

Did Barca field an ineligible player?

More fun in La Liga this week on the back of Thursday’s game that nobody wanted to play.

As we covered last week, Barcelona and Osasuna were forced to play less than 48 hours after some World Cup qualifiers because La Liga could not find another window to fit their rearranged match into.

Barca won 3-0, though Osasuna have since lodged an appeal with the Spanish Football Federation claiming that the Catalan club fielded an ineligible player.

And it appears they may have grounds for protest.

Iñigo Martinez pulled out of the Spain squad with injury but played against Osasuna on Thursday night.

Fifa rules prohibit a player from playing club football within five days - except with express permission from the FA - if he has not joined up with his country when given an international call-up.

Since the game was wedged in at the end of the international break, and Spain played on the Sunday night, Barca’s win over Osasuna would fall inside that window.

With three points separating the two rivals atop La Liga, Real Madrid will be watching this process intently…

Reading fate up in the air

The EFL Board will meet on Thursday to consider their next steps if Reading owner Dai Yongge fails to hit their deadline of selling the club by Saturday. The Chinese businessman was barred from being a director by the EFL in February after it emerged in a court case that he has been classified as a “dishonest debtor” in this home country, and has been told he must sell the club.

Yongge has agreed a sale package with Robert Platek of BDT & MSD Partners, but the matter is complicated by the fact that former Wycombe owner Rob Couhig has a mortgage over the stadium and training ground resulting from his own takeover bid last year, which needs to be renegotiated.

The EFL’s options essentially boil down to suspending Reading’s matches or extending the deadline if it deems there to be a reasonable prospect of the sale going through. In the event of Reading’s games being suspended they would retain membership of the EFL however, leading to the prospect of their games being rescheduled for later in the year with a knock-on effect for other clubs.

Prosecutors investigating San Siro deal

Last week we reported on Inter and AC Milan planning to buy their shared San Siro home from the city in order to build a new ground on the site.

Well, local prosecutors in Milan are now investigating the proposed sale in a move which will almost certainly delay the process.

The inquiry was launched following a complaint by Luigi Corbani, president of the Meazza committee, which advocates for the preservation of the historic stadium.

Earlier this month, the Municipality of Milan approved plans for a new stadium at the San Siro site after both clubs submitted a feasibility study and acquisition proposal.

A key focus of the investigation is the purchase price of the San Siro and its surrounding area, valued at a total of €197 million—€73 million for the stadium itself and €124 million for the surrounding land.

According to La Gazzetta dello Sport, discussions have taken place regarding an €80 million discount to cover the removal of demolition debris, a cost that would be borne by the Municipality of Milan.

Overseas North London derby confirmed

Arsenal and Tottenham Hotspurs will meet in a first north London derby to be held outside of the United Kingdom when they take part in the Hong Kong Football Festival at the end of July.

Both clubs will be headed to Asia for pre-season tours, and have agreed to a July 31 derby to take place at Kai Tak Stadium.

The newly opened arena seats 50,000 fans and will host Liverpool vs AC Milan a week earlier.

Tottenham have one of the most iconic Asian players of his generation in Son Heung-Min and regularly travel to Asia in pre-season. Last summer they visited Japan and South Korea, where they have a huge overseas fanbase.

Arsenal have focused more on the American market with their recent pre-season excursions but managing director Richard Garlick said the club is excited to go back to Asia.

“As well as training hard and playing the match, we cannot wait to connect with our Hong Kong supporters in this wonderful part of the world,” he said.

“Playing against Tottenham Hotspur in the magnificent new Kai Tak Stadium will be a great experience for both teams and supporters, and will be a very important part of our pre-season preparations ahead of the new season.”

Brazil seek new coach for World Cup

Brazil have made another push to hire Carlo Ancelotti from Real Madrid at the end of the season after disposing of Dorival Junior in the wake of their 4-1 defeat to Argentina.

4-1 may have even flattered Brazil, who were played off the park by their arch rivals and find themselves 10 points behind the world champions after 14 games.

The CBF have long wanted Ancelotti to take over, feeling his ‘vibe shepherd’ style of management would work well with a star-studded but slightly aimless Brazil squad.

The Madrid boss turned down the five-time world champions before, and it is far from certain that he is willing to leave behind a young and incredibly talented Real Madrid squad that is expected to add Trent Alexander-Arnold on a Bosman. Xabi Alonso would be first choice to replace him but reports out of Germany yesterday suggested Bayer Leverkusen sporting director Simon Rolfes has received word from Alonso that he will stay.

Former Benfica coach Jorge Jesus is the other name in the frame.

Sheffield Wednesday hit crisis mode

Sheffield Wednesday announced that they have failed to pay their players' wages for March due to cashflow problems encountered by owner Dejphon Chansiri, who has placed a laughable £350m pricetag on the club.

Wednesday said in a statement that it was a "temporary issue" due to money owed to the Thai businessman, 56, whose family own the world's largest producer of canned tuna.

"Sheffield Wednesday can confirm a temporary issue with the payment of player salaries for the month of March," read the club statement.

"This has occurred as a result of significant sums of money owed to the chairman's businesses which has in turn impacted on the club's immediate cashflow.

"The chairman is working hard to resolve this situation at the earliest possible opportunity and in the meantime thanks everyone for their patience and understanding."

A number of groups have shown an interest in taking Wednesday off Chansiri’s hands but one of those potential investors, Wednesday fan Adam Shaw, revealed that the current owner has no intention of leaving and wants £350m for the Yorkshire club. 

Fans and concerned onlookers note to FootBiz that Chansiri sold himself Wednesday’s Hillsborough stadium in 2019 to help the club comply with spending rules. 18 months ago, Chansiri asked for donations from the club’s support to pay a £2m tax bill. Four months ago, the club were banned from registering new players for failing to pay another tax bill.

With the club and stadium now separated, any potential transaction becomes a lot less desirable and a lot more complicated.