Soccer: Chelsea go $233m into red

Chelsea made losses of 87.8 million ($232.8 million) last season, a record in British football.

Amid a sea of dizzying statistics that would have most chief executives reaching for smelling salts and an insolvency practitioner's telephone number, the one digit that is largely responsible for the deficit relates to wages. Chelsea's salary bill in 2003-04, the first year of the Roman Abramovich era, was 115.5 million, representing a staggering year-on-year leap of 210 per cent.

Among the highest earners on the payroll was chief executive Peter Kenyon, with a package worth 3.53 million, although another 34 employees at Stamford Bridge pocketed 2 million or more each in the year.

Not since Peter Ridsdale lived the dream at Leeds, leading to record annual losses of 49.5 million in 2003, has one club spent so extravagantly in pursuit of success.

The Leeds gamble failed because they had limited resources to combat on-pitch failure, leading them to the brink of administration until Ken Bates took over last week.

Unless anything untoward happens to Abramovich, Chelsea should have no such concerns.

The other key figures from Chelsea's accounts are 152 million (turnover, up 40 per cent), and 76 (the percentage of turnover spent on wages).

Such a ratio would cripple most clubs but then Chelsea, under their billionaire owner, have never been an ordinary club.

Kenyon said the first season of Abramovich's tenure was exceptional and Chelsea were aiming to break even by 2010.

"Two years ago we were seen as streets paved with gold," he said. "That is over. Chelsea is now being run properly. The club is being run as a business."

Kenyon, who was recruited from Manchester United after Abramovich's arrival, said the club was looking to become financially self-sufficient.They have a five-year plan to reduce their dependency on the Russian.

Part of that plan is to increase commercial income, and Chelsea announced an eight-year, 100 million kit deal with adidas, which will start next year.

Kenyon is also in talks with at least six multinational companies about a new shirt sponsorship deal, with the mobile phone firms Siemens and Orange reportedly in the running.

Abramovich's money has certainly led to an improvement in on-field performance, with Chelsea leading the Premiership and still in contention in three cup competitions.

The accounts, however, might reasonably be used as evidence that massive spending does not necessarily buy success.

The season in which the 87.8 million loss was sustained, under Claudio Ranieri, ended without a trophy.

Some of the most expensive players - and most costly in terms of wages - were flops at Stamford Bridge, namely Juan Veron, Adrian Mutu and Hernan Crespo.

Only since the arrival of Jose Mourinho have Chelsea really started purring, and future expenditure under him is likely to be more constrained.

Kenyon said he would set "some aggressive targets" for reducing the club's payroll.

Kenyon admitted: "Our squad [before] was too large and too expensive."

He also said that Mourinho understood that further big-money signings would only be made if he sold first.

That would be tested by the availability of various high-price superstars in the long summer transfer window.

One concern for Chelsea fans must be their club's fate if Abramovich decides to leave.

Kenyon has told fans not to worry. "Roman is at Chelsea for the long run," he said. "He has bought in completely to the vision of making this club one of the biggest and best in Europe.

"This was not a vanity purchase for the owner. It is a serious investment with a long-term business plan."

The adidas deal is part of that.

Chelsea hope to target key geographical areas, including the US and China, to expand their fan base and income. With such a loss, they might need it.

Chelsea high-rollers

* Salary bill: £115.5 million ($307m)

* Chief executive: £3.53 million ($9.4m)

* Turnover: £152 million ($404m)

- INDEPENDENT