The Premier League recently gave the green light to Chelsea’s sale of two hotels, totaling £76.5 million, to a sister company. This sale was a strategic move by the club to comply with the division’s profit and sustainability rules. The deal, which took place between Chelsea FC Holdings Ltd and BlueCo 22 Properties Ltd, both subsidiaries of Chelsea’s holding company, BlueCo 22 Ltd, was essential in reducing the club’s reported loss of £89.9 million in the 2022-23 financial year.
The Premier League’s profit and sustainability rules dictate that clubs can have a maximum of £105 million in losses over a three-year period. Certain deductions, such as infrastructure spending and investment in women’s football, are permitted. Chelsea’s sale of the hotels was crucial in ensuring compliance with these regulations, as it significantly decreased their reported losses for the financial year.
While UEFA and the English Football League typically ban such transactions, the Premier League allows them under the condition that they adhere to the league’s associated-party transaction rules and are assessed for their “fair market value.” ESPN’s sources have confirmed that this assessment has been successfully completed, with the sales found to be within an acceptable margin based on estimates of the hotels’ valuation.
Reports indicate that some of Chelsea’s Premier League rivals were skeptical of the validity of the sales. Any potential complications could have raised questions about the club’s compliance with PSR rules. Despite this, only 11 clubs supported a proposal to ban such transactions to sister companies at the Premier League’s Annual General Meeting in June. With a minimum of 14 votes required for the rule to change, the status quo was upheld.
A source close to Clearlake Capital, the majority owner of Chelsea, expressed confidence in the club’s ability to comply with the rules not only in previous seasons but also in the upcoming 2024-25 accounting period. This assurance reflects Chelsea’s commitment to operating within the guidelines set by the Premier League.
Chelsea’s sale of two hotels to a sister company has been approved by the Premier League, signaling their commitment to ensuring compliance with profit and sustainability rules. While the transaction may have faced scrutiny from rivals, the club remains confident in its financial management practices moving forward.