A bad year for Abramovich’s team. They posted a loss

FC Chelsea ended with a loss of over 70 million pounds. One of the reasons was the early termination of coach José Mourinho’s contract.

The worst season under the ownership of Russian oligarch Roman Abramovich. That’s how last year turned out for football giant FC Chelsea, a team usually at the top of the English Premier League, which finished only 10th and missed out on European competitions. Moreover, it wasn’t just an unsuccessful season from a sporting perspective—it was also a poor financial year. Chelsea ended the fiscal year—from July 2015 to June 2016—with a loss of over 70 million pounds. According to the club, two exceptional events were to blame: the termination of the contract with coach José Mourinho and his coaching staff, and the early cancellation of a lucrative sponsorship deal with Adidas. “These are exceptional losses because they don’t occur every year. And the current situation shows that the management’s decisions were correct,” said Jozef Tokos, sports analyst and football agent, for the Economic Daily.

Golden multi-million parachute
Chelsea’s management explained on its website that if it weren’t for those two extraordinary events, the club would have ended the fiscal year with a profit of 4.7 million pounds. “That’s why we can say that the club’s financial situation is sound in the long term,” said Tokos. According to British media, the payout to Mourinho after his dismissal was an expensive move—several sources reported the severance package reached around 40 million pounds. The amount was influenced by the successful 2014/15 season, in which Chelsea, led by the Portuguese coach, won the league title. But at the beginning of the following season, the team fell into conflict with Mourinho and struggled at the bottom of the table.

“This allowed the Italian coach Antonio Conte to take over during the summer, and look what he managed to do with the struggling team in just a few months,” Tokos remarked. Chelsea is now dominating the Premier League, leading the table with a six-point advantage over second-placed Liverpool, and will certainly end the calendar year as the league leader.

Unexpected change of sponsor
Shortly after Mourinho’s dismissal, another unusual event occurred at Chelsea—something rarely seen at big clubs. The management decided to terminate the sponsorship deal with German kit manufacturer Adidas six years before its expiration. The early exit cost Chelsea tens of millions more, but from a long-term perspective, it was the right financial move. Adidas had been paying them 30 million pounds annually, but from next season, new sponsor Nike will be paying them twice as much. “We believe Nike will support our growth in new markets and strengthen our position among the elite football clubs of the world,” said Chelsea director Marina Granovskaia in a statement for the BBC. Like most of the wealthiest Premier League clubs, Chelsea aims to expand its commercial and fan base in the Middle East, Southeast Asia, and North America. (...)