There is major relief at Chelsea today following the announcement late last night that the club’s sale of two hotels from one branch of their ownership to another had been cleared by the Premier League.
The English top flight had been conducting an investigation into the £76.5m sale of the Millennium and the Copthorne hotels, which are on the site of Stamford Bridge.
In order to offset their colossal transfer spending over the last couple of years, the current ownership decided to sell off both properties to bring in some money. The Premier League’s profit and sustainability rules (PSR) allow clubs to lose up to £105m over a rolling three year period, and so some major one-off sales like this were necessary to keep Chelsea below the limits.
The valuation also seems fair £76.5m for two massive slices of prime real estate in one of the most desirable parts of London. The issue with who is buying them. Effectively, the Todd Boehly and Clearlake Capital ownership have sold both properties from one company they own to another.
Moving money magic tricks
Effectively the money has stayed within the club, but been moved from one pocket in another in a way that allows the accountants to pretend we’ve made money. It’s sneaky, and cheeky, but the Premier League have checked it out and found nothing wrong with it.
The fact that it was considered a “fair market valuation” is the crucial part, which takes it from rule-breaking to rule-bending.
As with some of the other clever tricks we’ve seen this ownership use to get around these regulations, it could be quickly closed up as a loophole by future Premier League meetings. But what’s done is done, and the last vote (held back in June) saw just 11 of the 14 clubs that would have been needed to change the rules vote in favour of preventing this sort of move.
