Chelsea Football Club now reportedly have the biggest wage bill in the English Premier League. The annual wage bill of £172 Million does not include new signings Fernando Torres, who has reportedly signed a contract worth £200,000 a week and £25 Million signing David Luiz, who both joined the club this week.
Premiership wages have been notoriously high in recent years and Chelsea's wage bill is £40 Million above closest big spending rivals Manchester City. A more important consideration is the percentage of a clubs turnover which is spent on players wages. Chelsea spend a reported 82 percent of their turnover on wages, while Manchester City spend 106 percent, this is in stark contrast to other top clubs such as Manchester United, who spend 46 percent of their turnover on wages, while Arsenal spend 49 percent.
Chelsea
Several big name players left Chelsea during the summer of 2010, the departure of Michael Ballack, Juliano Belletti, Deco, Ricardo Carvalho and Joe Cole saved an annual £20m in wages and generated around £15 million in transfer fees. Despite this saving Chelsea have recently reported losses of £70.9m which was up £26.5m from the previous financial year, the addition of Torres and Luiz will add to significantly to their wage bill.
Under the new UEFA Financial Fair Play rules, which come into effect from the 2011-12 season, clubs must only spend on wages and other expenditure what they earn in ticket sales, merchandising and other commercial income. Effectively the club's books will have to balance, failure to do so could ultimately lead to disqualification form European competitions such as the Champions League.
A potential safety net exists within the rules, any players whose contracts were agreed before 1 June 2010 will be exempt, if these rules were applied to Chelsea for the last financial year they would have actually been shown to make a financial profit. The rules won't be tightened until 2016 when all players wages will be taken into consideration, even then if a club is making a financial loss and they can prove there is an improvement in the trend of their finances, they may escape punishment by the governing body.
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