Chelsea in talks with UEFA to avoid European ban

The club now faces a significant financial penalty and possible exclusion from European competitions. Chelsea's extravagant spending in recent seasons could have serious consequences.

On Saturday, the respected British newspaper reported that the West London club has violated UEFA's financial sustainability rules and is at risk of multiple sanctions.

It is understood that the Blues exceeded UEFA's €200 million loss threshold over a three-year period, similar to the Premier League's own regulations. However, while Chelsea are believed to have met the Premier League’s financial requirements, they appear to have fallen foul of UEFA due to differences between the two sets of rules.

As The Times explains, Chelsea attempted to balance their books by including the £200 million sale of their women's team to BlueCo Midco Ltd—the consortium that owns the club and is led by Todd Boehly—as part of their accounts.

However, UEFA rejected this transaction because revenue from the sale of assets to a sister company cannot be recognised under their financial rules. The club also sought to include the sale of two hotels to another related company for a reported £76.5 million, which was similarly disregarded.

UEFA is determined to prevent intra-group transactions from being used to circumvent financial rules. While the Premier League accepted part of Chelsea's accounting measures, UEFA has taken a much stricter stance.

This has prompted Chelsea to enter into formal discussions with European football's governing body in a bid to avoid severe punishment, including a potential ban from European competition.

Without the disputed revenues from related-party transactions, Chelsea's cumulative losses over the last three years are estimated to be around £358 million.

As part of the ongoing negotiations between UEFA and Chelsea's ownership group—Todd Boehly and Clearlake Capital—talks have centred on the payment of an initial financial penalty and the implementation of a spending adjustment plan over the next three seasons. Should the club fail to comply again, harsher measures would be expected.

UEFA is expected to announce its decision regarding the London club's case by mid-May. Reports in the British press also suggest that at least three other European clubs are in similar positions and are currently engaged in talks with UEFA over breaches of financial regulations.