Chelsea owner pursues Champions League fixation before Uefa rules bite


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Feb 15, 2009
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Chelsea owner pursues Champions League fixation before Uefa rules bite
The £50m purchase of Fernando Torres should not stop Roman Abramovich complying with new financial fair-play regulations

As speculation about the imminent arrival of Fernando Torres reached fever pitch yesterday, one Chelsea insider explained that Uefa's financial fair-play doctrine ran through the club's operations "like a stick of rock". For many including Michel Platini, the Uefa president who has repeatedly claimed Roman Abramovich is a supporter of his reforms, which will broadly forbid clubs from spending more than they earn, that will be hard to swallow.

It was with no apparent sense of irony that Chelsea released their results – showing losses had increased to £71m despite the vaunted drive towards self-sufficiency unwisely trumpeted by the former chief executive, Peter Kenyon – on the same day the club splashed out almost exactly the same again on Fernando Torres and David Luiz. For Chelsea insiders it was further affirmation of Abramovich's continued appetite for the club – even in the face of the huge investment by Manchester City owners effectively copying the model he employed at Stamford Bridge when he bought the club in 2003. Abramovich is used to his fidelity being questioned. Every absence from the club is keenly noted and when he converted £726m in loans that have underwritten his huge investment to equity in two tranches, there were those who saw it as a potential parting gift rather than a sign of his commitment. The money is now owed by the parent company that holds his shares rather than the club itself. His money continues to talk for him.

There is little doubt that Platini is telling the truth when he speaks of the personal mandate he has received from Abramovich for his financial fair-play plans.But the Chelsea owner is equally aware that not qualifying for the Champions League would be more catastrophic than setting back his breakeven target a year or two.

Both the club and those close to him in Moscow have continued to insist he remains as committed to Chelsea as ever. They claim there is no inconsistency between the huge investment in Torres, a player long coveted by Abramovich, and a long-term plan to break even.

Huge investment in the club's academy – allowed under the financial fair-play rules – is beginning to bear fruit, they argue, even if more players in the 22-26 age range may have to continue to be bought to smooth the academy players' introduction.

Although Platini continues to talk tough, examined in detail the goal of complying with the fair-play criteria appears achievable – even taking the signing of Torres into account. The first accounts that will qualify concern the next financial year – 2011-12.But Uefa's accountants will not start examining them until the 2013-14 season, when they will take both 2011-12 and 2012-13 into account.

Even then, there is an "acceptable deviation" of €45m (£38.5m) over those first two years. And, as first revealed in the Guardian last month, if clubs can show their figures are moving in the right direction, then they are also allowed to discount the wages of players on contracts signed before June 2010.

The argument runs like this: this week's figures ran to the end of June 2010. Since then, Chelsea have reduced the annual wage bill by maybe £20m by moving on the likes of Juliano Belletti, Joe Cole, Michael Ballack, Deco and Ricardo Carvhalo and brought in some £15m in fees. Those brought in - Yossi Benayoun, Ramires - were on more modest salaries.

A renegotiated deal with Adidas, new sponsorship partners, increased ticket prices and improved Champions League and Premier League TV deals finally had them moving towards breakeven, say club insiders. While Torres alone will add around £10m a year to the bill in amortised transfer fees and £10m in wages, the club expect to move other high earning, older players in the summer and continue to boost commercial deals. Club insiders point out that they tried to sign Torres in the summer and that chairman Bruce Buck and chief executive Ron Gourlay have long insisted the funds for a marquee signing could be found if required.

For Chelsea, finding a stadium naming rights partner - a long held goal that has yet to bear fruit - and overhauling other sponsorship deals is disproportionately important. With no ground move on the agenda, the club will continue to have to run to catch up rivals with bigger stadiums. To that end, they will tour Asia in the summer as part of an ongoing plan to tap into developing markets and hope the capture of Torres - for all their previous investment arguably the first bona fide "superstar" signing - will help that process. In the short term reliance on the man who changed the face of English football when he appeared as if from nowhere and took control of Chelsea in a £140m deal in 2003 is likely to continue. Monday's splurge represented his biggest outlay since 2004.

There is another factor at work that may underpin the owner's renewed appetite for investment at home and abroad. Politically he has never felt more secure. As Abramovich sat yards away from Vladimir Putin in Zurich in December in the wake of Russia's victory in its campaign to host the 2018 World Cup, he appeared at once characteristically awkward with his public role and bathed in quiet satisfaction. As well as contributing to the $30m (£19m) campaign budget, Abramovich quietly used his contacts in the game to help the Russian cause. Kremlinologists say Abramovich has remained close to Putin because he understands how to keep on his right side.

For all that he is usually pictured in the British press aboard his yacht, as recently alongside his new wife and new baby, or at Stamford Bridge he is still said to spend more time in Moscow than in London or more glamorous locales.

He is estimated to have invested between $30m and $50m a year in Russian football in the past five years – first paying Guus Hiddink's wages as national coach and more recently in building scores of artificial pitches across the vast country and funding youth academies. While that pales in comparison with his Stamford Bridge losses, it is telling that Putin said Abramovich would be expected to fund the construction of one of the new World Cup stadiums.

Two years after he stepped down from the presidency for constitutional reasons, Putin remains the country's most powerful politician and speculation continues to rage over whether he will return to the post in 2012. As long as he remains in his pre-eminent position, Abramovich would appear to be in a strong position. And while spending big in the summer, in the wake of a Double victory, might have appeared wanton, to do so when Chelsea risk not making the Champions League places might be easier to make a case for.

The debate about whether he will redirect his investment is a false construct, say those close to him. A man whose wealth was estimated at £7.4bn by the latest Sunday Times rich list retains sizeable interests in gold, real estate and steel, can well afford to sustain his passion for the London club alongside other business and leisure pursuits, they argue.

Abramovich, who made his fortune in the bitterly disputed but entirely legal dash for state assets in the mid-1990s, will keep his counsel. But as long as he remains silent – he has not given an interview since 2003 – mystery willcontinue to surround his long-term intentions. Will this latest splurge come to be seen as the start of a new phase in the Chelsea project that will combine fiscal stability with on-field success, as the club insists, or as one last hurrah, an attempt to squeeze a longed-for Champions League victory out of an ageing squad?