Chelsea record largest loss in six years after ditching Adidas for Nike — but record revenue points to long-term health
Chelsea recorded their biggest loss in six years last season, after agreeing to pay out of their £30m a year Adidas kit deal.
The Blues announced a net loss of £70.6m for the year after incurring exceptional costs of £75.3m — which included compensation fees paid to both Adidas and sacked manager Jose Mourinho.
Yet the club's revenue hit record levels at £329.1m, a five per cent increase from last year's £314.3m, while before exceptional costs the bottom line came in wih a £4.7m profit.
Chelsea agreed to terminate their Adidas deal last season, just four years into a 10 year contract, for a fee believed to be close to around £40m.
The club's commercial team believed that it could negotiate a better deal elsewhere and have since secured a 15-year deal with Nike worth close to £1bn that justifies its decision.
Although recording its biggest net loss since 2010 when finishing the year £70.9m in the red, Chelsea's growing revenue figures point to long-term financial health.
Read more: A sponsorship expert explains why Chelsea parting ways with Adidas still makes financial sense
Uefa's financial fair play rules have forced the club to move away from relying on owner Roman Abramovich's billions and towards a more sustainable model.
Clubs under Uefa jurisdiction currently restricts clubs to a maximum permitted loss of €30m over thee years.
Yet there are numerous exceptions for this, including any loss on the disposal of assets made for the long-term benefit of the club.
Chelsea are also on the verge of completing the biggest sale in their history with Oscar reportedly set to join Shanghai SIPG for £50m.
"The fact Chelsea recorded our highest revenues in a season when on-pitch performance was disappointing is a credit to our hard-working, dedicated staff and the robust business they have helped build," said chairman Bruce Buck.
"It has long been our aim for the business to be stable independent of the team's results and we continue to reinforce that."