Recently, the Premier League approved Chelsea’s sale of two hotels for £76.5 million to a sister company. This deal was crucial for Chelsea’s compliance with the division’s profit and sustainability rules. The club faced a loss of £89.9 million in the 2022-23 financial year, but selling the Millennium and Copthorne hotels helped reduce this figure significantly.
The transfer of ownership from Chelsea FC Holdings Ltd to BlueCo 22 Properties Ltd, both subsidiaries of Chelsea’s holding company, took place smoothly. The Premier League’s guidelines allow such transactions as long as they are within the “fair market value” determined by the league’s associated-party transaction rules. Reports had suggested some skepticism from Chelsea’s Premier League rivals regarding the validity of the sales.
The Profit and Sustainability Rules (PSR) of the Premier League permit clubs to have up to £105 million in losses over a three-year period. However, certain deductions, such as infrastructure spending and investment in women’s football, are allowed. Chelsea’s majority owner, Clearlake Capital, expressed confidence in the club’s ability to comply with these rules in both past and current accounting periods.
League Vote
The Premier League recently voted on whether to ban transactions to sister companies at their Annual General Meeting. Despite some doubts raised by clubs, only 11 supported the proposal, falling short of the required 14 votes for the rule to change. This decision indicates a general acceptance of such transactions within the league.
The approval of Chelsea’s £76.5 million sale of two hotels reflects the club’s commitment to financial compliance within the Premier League. Despite initial skepticism from some clubs, the league’s assessment cleared the deals as being within acceptable margins. Moving forward, Chelsea’s adherence to the Profit and Sustainability Rules will be crucial in maintaining their financial stability and competitiveness in the Premier League.
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