The £262m deficit for 2024-25 dwarfs the £179.5m lost by Manchester City in 2011.
It comes despite Chelsea generating £490.9m in revenue, which the club says is the second-highest total in its history.
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In 2024-25, the Blues won the UEFA Conference League and Club World Cup, and finished fourth in the Premier League.
The club insists it remains compliant with financial regulations such as the Profit and Sustainability Rules (PSR), which allow losses of £105m over three years.
The figures used to calculate this are different to the pure pre-tax loss.
Chelsea have spent more than £1 billion on players since BlueCo took over in 2022, signing a host of younger players to long-term contracts.
UEFA fined the club £26.7m at the start of the season for breaching squad cost ratio rules and is also monitoring them over a three-year period.
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Sources have told BBC Sport that the reported losses include fines, including the Premier League’s £10.75m penalty relating to payments to agents made under the ownership of Roman Abramovich, as well as write-offs to the accounts of high-profile players such as Raheem Sterling, who was released, and Mykhailo Mudryk, who is being investigated over a failed drugs test.
Chelsea believe revenue will reach record levels in their next accounts, with an extra £85m earned from winning the Club World Cup, plus around £80m in TV revenue from the Champions League.
The loss is less than the £355m quoted in UEFA’s benchmarking report last month.
That figure is understood to be the result of excluding sales between two clubs in a multi-club model, as Chelsea have the same owners as French team Strasbourg.
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Chelsea also revealed that its women’s team lost £17.1m in 2024-25, on revenue of £21.3m.
What Chelsea must do to stop losses
It is important to note that Chelsea are yet to publish their full accounts, which will soon be published on Companies House and are expected to provide a more detailed picture.
The only information currently available comes from the statement made by Chelsea on Wednesday.
“People are asking whether Chelsea are a football club or a hedge fund experiment. I don’t think these accounts give a clearer answer. We’re still waiting to see the full picture at Companies House,” said football finance expert Kieran Maguire.
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He said the figures highlight the importance of the Champions League for a club currently sixth in the league.
He added: “For every pound you get from broadcasting (in the Champions League), you only get 11p in the Conference League, and it’s much harder for the marketing department to sell a hospitality box for a game against Denmark’s second-best team than when Barcelona comes to town.”
There are also concerns that Stamford Bridge is starting to look dated, leaving Chelsea at risk of falling behind their rivals, particularly with the Premier League’s new squad-cost ratio rules coming into force this summer.
These replace the PSR and allow clubs to spend 85% of their total income on equipment-related costs.
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“Chelsea have only one stadium that seats 40,000 and is about half the size of Manchester United, and is probably £50-60m behind others,” Maguire added.
“With the introduction of the new rules on the relationship between staff and cost, it is very important that clubs increase their income wherever they can.
“Chelsea are simply behind their rivals and have less to spend on players, and that will take its toll over time.”
Maguire agreed that Chelsea were unlikely to breach Premier League rules.
Chelsea made a profit of £128.4 million last year, almost entirely due to the sale of its women’s team, a loophole that the league has since closed.
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It means pre-tax losses over the past three years amount to around £220m in total, but Maguire said Chelsea would have had to submit losses booked under PSR by December 31.
“The lack of news suggests the league is satisfied with its PSR numbers,” Maguire said.