Chelsea FC’s new American owners were announced at a period more suited to a US audience, which was perhaps apt.
Sixty-six days after Roman Abramovich put the club up for sale, a consortium led by LA Dodgers co-owner Todd Boehly and backed by a Californian private equity firm agreed to a £4.25 billion purchase, which was handled by a New York bank, at 1.37 a.m. UK time on Saturday.
The consortium has still to pass the Premier League’s owners and directors criteria, as well as have the agreement approved by the UK government.
However, the procedure is not expected to encounter any serious issues before Chelsea’s operating license expires on May 31. The license was put in place to allow the club to continue running after Russian tycoon owner Abramovich was sanctioned.
After then, the real job begins. Apart from making Chelsea profitable and restoring Stamford Bridge, there are some pressing challenges to address in the near future.
After paying the £28 million monthly wage bill, Boehly must select who will stay and who will leave, all while hoping the squad does not miss out on Champions League qualification.
Following two months of uncertainty, the near future will be a major task for new owners at a club whose crisis has never felt far away in the past.
Sort major players’ and managers’ contracts.
Chelsea’s main concern will be a playing team that is due to lose half of its central defense when contracts expire at the end of the season, where record signing Romelu Lukaku is on the bench, and where academy graduates Mason Mount and Reece James are attracting interest from around Europe.
That implies that after two months of being unable to strike new deals due to the club’s sanctions, the new owners need personnel to work quickly.
Would a new director of football or recruitment specialist be able to tackle those pressing challenges right away? Most likely not. Even if it means extending Abramovich’s legacy, it would make sense to keep technical advisor Petr Cech and director Marina Granovskaia, the primary contract negotiator.
There have been rumors that Granovskaia and Bruce Buck, the club’s chairman, may stay on. Buck was significantly involved in the sale process with Raine Group, an American investment firm.
Boehly and his partners will have their own ideas about who controls Chelsea in the future, including whether or not to fill the director of the football vacancy, but the men’s team’s playing side requires immediate attention.
Men’s head coach Thomas Tuchel and women’s manager Emma Hayes both expressed interest in staying throughout the sale process, but Tuchel, in particular, will be concerned about what the future holds as his team’s season appears to be unraveling, with only one win in their previous five league games.
The German is regarded as a valuable asset at the club, and his contract expires in two years. Hayes won the Women’s Super League for the third year in a row.
Make sense of the squad’s uncertainties
The sale of Chelsea has contributed to the uncertainty at the club during the last two months, but it cannot account for all of the problems.
Antonio Rudiger was given a deal to become the club’s highest-paid defender ahead of Abramovich’s sanction, but he is poised to join Real Madrid; £98 million signing Lukaku was benched shortly after giving an unapproved interview in December.
However, in recent weeks, the findings have deteriorated. Tuchel had an incredible debut season, winning the Champions League, reaching the FA Cup final, and finishing in the top four of the Premier League. However, the club has taken a step backward this season.
Despite reaching the FA Cup final for the second year in a row, where they will meet Liverpool on Saturday, their Champions League defense came to an end in the quarter-finals, and qualification for next season’s competition is far from certain.
All of this implies that some major problems must be addressed.
Who will take Rudiger’s place, as well as Rudiger’s teammate Andreas Christensen, who has reportedly agreed to join Barcelona? Does this have an impact on Cesar Azpilicueta, another defender who has a year left on his contract but has been linked with a move to Catalonia? Is the club willing to write off Lukaku’s high price tag since he does not appear to be a good fit for Tuchel’s style of play?
Meanwhile, American winger Christian Pulisic appears to be dissatisfied with his minor role, while midfielders Jorginho and N’Golo Kante are approaching the end of their contracts.
There is obviously a need for stability, but the club must act quickly to avoid future setbacks.
The group led by Boehly, which includes Chelsea fans Daniel Finkelstein and Barbara Charone, appears to be aware of the issues. It will be a different matter to fix it.
Change the policy on transfers
Cutting a £28 million monthly pay cost could be high on the agenda for a club that would be majority-owned by Clearlake Capital.
However, relegating Lukaku and goalkeeper Kepa Arrizabalaga – a £71 million signing in 2018 – to the bench could indicate a weak transfer philosophy. Under Abramovich’s leadership, there will be a large turnover of managers, which will provide an opportunity for cost savings. According to the club’s finances, removing the previous manager Antonio Conte cost the club £26 million.
According to football finance expert Kieran Maguire, Abramovich’s willingness to loan the club more than £1.5 billion over his 19-year reign equated to an average loss of £900,000 per week, which is unlikely to be duplicated by the incoming owners.
According to him, private equity groups like Clearlake are frequently trying to make money over a five-year period. Chelsea has been assured, however, that Boehly’s group will commit to owning the club for at least 10 years and will not pay itself dividends or management fees during that time.
The stadium, the sponsors, and the revenue
Saving money on transfers and managers will only get you so far, but Boehly’s group has had to show how they will take Chelsea to the next level throughout the process.
Negotiating new sponsorships could provide opportunities for development in the short term. Chelsea’s shirt sponsorship with Three is worth £40 million per year and will last another season. Sanctions forced Three and Hyundai to cancel their contracts.
Matchday income will also be a priority, especially because, Manchester United and Tottenham might be £40-50 million better off than Chelsea over the course of a year due to the size of their stadiums.
For the last full pre-Covid-19 season, Stamford Bridge’s 42,000-capacity stadium brought in £67 million in matchday revenue, but Arsenal and Liverpool will be able to generate revenues in excess of £100 million once their capacity is increased.
The cost of rebuilding the stadium would be enormous, but Boehly’s company has pledged £1.75 billion for “investments in Stamford Bridge, the academy, the women’s team, and Kingsmeadow, as well as continued funding for the Chelsea Foundation.”
Boehly has mentioned fan tokenization as a technique of engaging, and possibly earning from, fans on several levels.
He’s also hinted at trying to make Chelsea a global brand and increase its popularity in the United States, building on the foundations of some American kids growing up watching the Premier League on Saturday mornings.
There are already eight teams in the division that are wholly or partially owned by Americans, so there is plenty of competition.
Chelsea’s ability to stand out from the pack and make the necessary improvements will be as exciting in the long run as it will be this summer.