Chelsea could soon find themselves in serious trouble with UEFA after the European football governing body dismissed a crucial financial move the club made to balance its books. The move involved classifying the £200 million sale of their women’s team—along with two club-owned hotels—to their parent company BlueCo as valid income, which UEFA has now rejected as illegitimate under its current Financial Fair Play regulations.

According to UEFA rules, transactions between entities under the same ownership—also known as related-party transactions—are not considered admissible revenue for the purposes of financial sustainability assessments. This leaves Chelsea exposed, as these asset sales had helped the club narrowly avoid sanctions under the Premier League’s profit and sustainability rules.

Under the co-ownership of Todd Boehly and his consortium, Chelsea have spent over £1 billion on transfers and infrastructure in recent seasons. Although the Premier League accepted the controversial sales to BlueCo, UEFA’s stricter financial framework has now placed the West London club in jeopardy of breaching its European regulations.

Currently, Chelsea’s reported losses over the last three financial years amount to £358 million—significantly exceeding UEFA’s limit of €200 million (approximately £170 million). Negotiations are ongoing between the club and UEFA to find a resolution. Potential outcomes include a heavy financial settlement, enforcement of a strict three-year spending plan, or in a worst-case scenario, a ban from European competition for at least one season.

A decision is expected to be announced by UEFA in May, and it could have major implications on Chelsea’s financial planning and European ambitions moving forward. Adding to their concerns, UEFA has also introduced an updated cost control policy that further restricts spending on transfers, wages, and agent fees.

Beginning next season, clubs will only be allowed to spend 70% of their annual football-related revenue on those expenses, down from the current 80% limit. This change, combined with Chelsea’s already bloated wage bill and recent spending spree, places the club under immense pressure to comply or risk harsh penalties.

To avoid further fallout, Chelsea must now explore cost-cutting measures, offload players, and restructure its operations to remain competitive both on the field and financially compliant off it. The upcoming months will be pivotal in determining whether the club can avoid UEFA’s disciplinary hammer and maintain its presence in top-tier European competitions.