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Vitesse's 2012-13 financial report was released today and in addition to speaking about Vitesse's finances, CEO Joost de Wit had some very interesting things to say about the Chelsea relationship.
"We are very happy with our investor Alexander Chigirinskiy. He has chosen to work with Vitesse due to our Reputation as trainers, our culture, tradition and history, as well as the attractiveness of Dutch football. He offers us the financial strength to continue to build the club. Our relationship with Chelsea is special, especially in Dutch football, and we cherish it. With this structure, which fits perfectly with the modern developments in international football, the club is in good shape for the future."
- Joost de Wit
Based on de Wit's quotes, it seems like the club is very happy with its relationship with Chelsea. This is to be expected, of course, but for those of us who have become big supporters of the Arnhem club, it's nice to know that things are progressing well and that Cobham East is here to stay.
Further, I'm very glad that he mentioned how the relationship is set up to succeed in this modern era of football. Now that financial fair play is an issue, a much bigger emphasis is being placed on youth development by forward-thinking clubs. Developing young talent to either restock the first team or sell for profit is a large part of Chelsea's plan for FFP compliance, especially since Chelsea will want to continue to avail itself of the highly-inflated transfer market in order to ensure that the club always has the best talent available.
On the subject of financial fair play, Vitesse is not in as good a shape as I would've thought. I expected that revenues would have increased considerably in each season since 2010-11, when Chelsea and Vitesse first began their relationship.
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As first noted by Dutch Chelsea supporter Mark Will Stinson, the relationship Vitesse has with Chelsea has produced much more success on the pitch than it has in the financial accounts. Of course, the situation is much better this way than it would be the other way around, but I was very surprised to find out how little Vitesse earns.
According to the latest books (which were made available today), Vitesse lost £20.2m in 2012-2013 and £15.3m in 2011-12. At a glance, this would seemingly put Vitesse very close to the limit for allowable losses (around £38m) during the first FFP monoitoring period (covering the 2010-11 and 2011-12 seasons). However, there are a number of write-offs that will reduce this number, including expenditures made on infrastructure. Vitesse just built what looks to be a very expensive training complex, and the associated costs will not count towards UEFA's financial fair play calculation.
That said, Vitesse will be unlikely to avail itself of the wage exemption contained in Annex 11 §2 of the FFP regulations, due to losses increasing from 2011-2012 to 2012-2013. Briefly, in order to utilise the wage exemption, clubs must show a "positive trend" from year to year. There is some speculation as to how UEFA's Club Financial Control Body (CFCB) will define "positive trend," but the majority opinion is that clubs must reduce losses from year to year in order to show a positive trend. We likely won't know for sure how positive trend is defined until the CFCB tells us (hopefully this spring).
In addition, as Stinson notes, these figures do not include the sale of Wilfried Bony to Swansea (£12m) or Marco van Ginkel to Chelsea (£8.3m). The profit earned from those sales will be recorded on the 2013-14 books.
These accounts seemingly confirm my long-held notion that Chelsea pays 100% of the wages of the players it sends to Vitesse. Chelsea is in a much better financial position to absorb these costs into its FFP budget, and the added wage expenditure would make it difficult for Vitesse to comply with the break-even requirement of financial fair play.
Given the ever-increasing Chelsea presence in Arnhem, I fully expect Marina Granovskaia, Peter Gansler, Yevgeny Merkel and the other executives to start facilitating considerable increases in Vitesse's revenues. Of course, Champions League football certainly won't hurt revenues either.
My Dutch language skills are nowhere near they need to be in order to fully comprehend the financial statement, but as I (very slowly) translate the document, I'll be sure to include anything of interest in future Vitesse roundups.
