Just how screwed will Chelsea be without Champions League football next season?
Chelsea are almost certainly not going to be in the Champions League next season. They may well not be playing European football at all.
They declared losses of over £260m for 2024/25 and have already been whacked sharply on the knuckles by UEFA’s fining stick with bigger and harsher penalties to come if they can’t make the numbers add up over the next four seasons.
Given the player-trading model BlueCo have adopted in their time so far, it’s hard to see how they can possibly make that work.
So, just how financially f*cked are Chelsea as a result of their current malaise, and what on earth might they be able to do about it?
What’s happened to Chelsea, then?
Right, okay, so this piece will be delving into some complex financial waters with some difficult words. So you will have to pay attention from the start.
The current key to the problem, if you’ll allow us a brief early foray into the long grass of technical jargon, is that Chelsea’s football has gone to complete and utter f*cking sh*t.
A woeful 3-1 defeat to Nottingham Forest means they’ve lost their last six Premier League games in a row. They last did something that absurd in 1993, when football and Chelsea were very different things.
‘Football wasn’t invented in 1992, you know’ may be yer da’s favourite thing to say while expressing his delight at ‘proper clubs’ like Leeds and Nottingham Forest securing their Premier League status for next season, but there’s no use pretending it wasn’t a significant turning point in the game.
Chelsea are one of the most significantly altered clubs and concepts across the Premier League years. Essentially, if they’re doing pretty much anything they were last doing when half of Stamford Bridge was a car park, then it’s bad.
Joao Pedro’s spectacular but largely meaningless late goal did at least prevent Chelsea from six straight defeats without even a goal scored – something they’ve never ever done, before or since the invention of football – but it still leaves them rock bottom of what is, as an aside, a truly mental form table.
That table features Nottingham Forest top of the pile and being kept honest by the Manchester clubs plus Brighton and Leeds, Arsenal and Liverpool in mid-table with West Ham and Spurs, and Aston Villa and Newcastle nervously just outside the relegation places where Chelsea are joined by, in fairness, Wolves and Burnley.
So Chelsea are ‘sh*t’ at the moment, in the parlance of our times, but why does that matter?
Because it’s now almost certainly going to cost them a place in next season’s Champions League, and possibly see them miss out on Europe altogether if they can’t find a way past Man City in the FA Cup final.
Both those things are perfectly plausible – although both look slightly dicier now than they did a couple of weeks ago – but even then Chelsea being the team to benefit looks a long shot.
They are currently ninth, four points adrift of a Bournemouth side who haven’t lost a Premier League game since the first weekend of January.
Missing out on the Champions League would obviously have significant financial implications for a club that can’t really afford significant financial implications.
Why can’t Chelsea afford significant financial implications?
Because they are already firmly under UEFA’s microscope anyway. Chelsea were slapped – as football clubs in these situations must always be – with a £27m fine last year for breaching financial sustainability rules in 2023 and 2024.
Chelsea’s settlement agreement with UEFA put them under scrutiny for the next four years. This year will be fine. Chelsea’s Club World Cup success and Champions League participation will keep them on the happy side of par with UEFA.
So what’s the problem, then?
The future years. With UEFA slightly less gullible than the Premier League when it comes to trying to outmanoeuvre financial regulations by doing things like selling your own women’s team or a hotel to yourselves, it will be harder for Chelsea to wriggle out of any future breaches of their UEFA settlement.
Potential and increasingly likely problems for Chelsea here include an even heftier fine, not being allowed to register new players to their UEFA A squad, and eventually even a one-year ban from European competition.
Maybe it would be better not to qualify for Europe at all, then? Avoid some of those potential issues.
It’s one school of thought, and Chelsea’s players appear determined to give missing out on even the Thursday night competitions a red-hot crack anyway. But it comes with its own problems.
Most obviously, an even sharper reduction in income and a potentially even tougher time down the line trying to get on the right side of the ledger if they do get back into the Champions League.
But it also denies them another option that Italian clubs have deployed in the past; that is, to take their medicine and accept the one-year ban in a year when it only means missing out on the Europa League or Conference League rather than the big bucks of the Champions League.
Now it should be noted here that Chelsea themselves have always insisted they wouldn’t do this and don’t need to, but football finance experts have suggested it as a route they might consider and it would at least be an option on the table should they manage to secure qualification for one of the two lesser events.
What UEFA rules did Chelsea actually break?
UEFA have a ‘football earnings rule’ and a ‘squad cost rule’. The first is about how much can be spent against the revenue coming in, and the second is about how much of that money is ploughed into the first-team squad. Clubs are not allowed to go above 70 per cent, and Chelsea’s breaches put them between 80 and 90 per cent.
They must get that figure down below 70 per cent, yet have continued to invest heavily in players without it always appearing clear that it was with the intent of significantly improving the first team.
And they must avoid any repeat of 24/25’s vast losses – something that just got a lot more difficult.
How do they avoid breaking the rules again, then?
Beyond this season and with no Champions League football, with enormous difficulty.
Chelsea reported pre-tax losses in 2024/25 of £262m – a Premier League record – despite the club’s second-best ever revenue figure of £490.9m.
The impact of this season’s successes in the Club World Cup and making it to the last 16 of the Champions League is tipped to see that revenue figure rise to north of £700m for 25/26.
But that only highlights the freak one-off nature of this season’s revenue. With no Champions League and no Club World Cup, Chelsea will drop back to those 24/25 levels, at best.
And they simply cannot record another loss anywhere near that 24/25 figure.
There are allowances that UEFA will make, but any losses above £52.2m would trigger a fine up to £17.4m; losses over £69.7m and you’re looking at a one-year ban from European competition the next time they qualify.
So what will Chelsea do?
Despite their insistence that they’ve got all their ducks in a row and all the numbers figured out, it does seem unlikely they will be able to get next season’s numbers anywhere near the required targets without a significant change in their current approach to player trading.
Chelsea may have repeatedly ruled it out, but biting the bullet and taking a one-year ban in a season where it will be a Thursday night competition they miss rather than a possible Champions League season is definitely worth considering from a purely financial viewpoint.
A conservative estimate once extra ticketing, hospitality and sponsorship revenues are added to the £78.9m prize money they earned for this season’s run to just the last 16 of the Champions League would make it a nine-figure sum. The revenue from winning the Conference League amounted to something more like £15m. It’s a vast difference.
But still that serves only to mitigate the impact of a hugely serious sporting punishment. It seems inevitable that Chelsea will have to navigate the next few transfer windows more carefully than recent ones.
Difficult player sales will have to be considered – Enzo Fernandez and Cole Palmer two obvious star names who are already attracting significant interest but who will not be alone.
How has it come to this?
BlueCo have squandered what was a very comfortable PSR position since taking the reins at Chelsea. While they have avoided Premier League sanctions through the use of related-party transactions, most notably selling hotels and the women’s team to other companies owned by Chelsea’s parent company, 22 Holdco – something UEFA’s rules explicitly refuse to take into account – it is pretty wild they’ve even needed such chicanery in the first place.
Chelsea had a very strong PSR buffer when BlueCo came in, but they have now spent over £1.5bn on players without a significant improvement in on-field results.
The club does do good business in player sales, and that is the thinking behind their infamously long, amortised contracts and explains why bare revenue numbers remain strong even as the losses pile up.
Football finance expert Kieran Maguire has previously likened Chelsea’s player-trading model to a hedge fund, with players signed on long-term contracts with a view to long-term profit and reduced chance of losing players on Bosman frees.
But without on-field success, that model can only last so long.
Chelsea’s own accounts refer to success of the men’s first team as a ‘clear driver’ of revenues but the club remain reliant on owner funding and loans to subsidise the current business model.
The long-term implications are truly grisly. UEFA’s watchful eye is already a more than ticklish enough short-term concern.
Chelsea will appoint yet another new manager in the summer who will inevitably want to make the squad his own; that is a course that will now have to be navigated with great care.
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