Chelsea is for sale. Russian oligarch Roman Abramovich, who has owned the team since 2003, has enlisted the services of New York-based investment bank Raine Group to find a buyer willing to pay the 3 billion pounds he is demanding for the reigning Champions League and World Cup champions. of FIFA Clubs.
For extremely wealthy individuals and private equity investment companies interested in acquiring a sports franchise, the opportunity rarely presents itself to snap up a world-class soccer club like Chelsea, widely recognized worldwide. Sources tell ESPN that the Raine Group has already received at least 300 expressions of interest from potential buyers. And while the vast majority of such expressions of interest will be quickly dismissed for lack of resources or a business plan to buy the club (one of the most successful in the Premier League), sources say at least 10 are considered credible. More are expected to emerge before the March 15 deadline, so there will be the first hints of an offer.
However, with a valuation of £3bn, which would make Chelsea the most expensive football club in history, and a stadium (Stamford Bridge) vastly smaller and less modern than the venues of its domestic and European rivals? is Chelsea as attractive as it appears at first glance?
ESPN spoke to Mike Forde, a former Chelsea manager from 2007 to 2013, who is currently CEO of Sportsology, a New York-based company that has advised US ownership groups on the purchase of major sports assets in Europe and the Americas. to discuss the race to buy Chelsea and why there is so much interest in taking over the club.
Q: What appeal does Chelsea have for a prospective new owner?
A: Chelsea is already a globally recognized sports brand. Their successes in the Premier League and Europe (two Champions Leagues, two Europa Leagues) in the last 20 years means that they are synonymous with triumphs and that they are at the forefront of this sport. Although they are also a team that plays in the Premier League and that represents a huge attraction.
The Premier League’s worldwide broadcasting rights deal between 2022 and 2025 is valued at £5.3bn and will continue to grow. That has obvious appeal to any investor. Within this, there is the opportunity for Chelsea to grow its commercial strategy in the same way that Manchester United has done with the Glazer family.
Despite their successes on the pitch, Chelsea are still a long way from United commercially (Chelsea generated £153.6m in commercial income in 2021, compared to United’s £232m) and any new owner could make such a difference. earnings grow significantly. Likewise, Chelsea could become a global platform, similar to the Red Bull Group or City Football Group, which currently number 10 teams around the world. It could develop a Chelsea Football Group to boost revenue and visibility.
And while it is true that the Stamford Bridge stadium requires a process of modernization and expansion, its execution represents an opportunity as well as a challenge, due to the possible contracts for the rights to the name of the arena and the ability to become a multi-event complex that generates significant income.
Q: Does Chelsea’s location in London make it more attractive to a new owner??
A: Aside from the many opportunities mentioned above, we can’t underestimate the value of being able to take advantage of Chelsea’s status as a London-based club in so many ways, from player recruitment to sponsorship. There are more billionaires on the planet than ever: life is short for them, so they want to enjoy the business opportunity and the possibility of living in one of the best cities in the world. London represents a great attraction.
London is a financial hub, with transport links to every corner of the globe, and Chelsea also has the added bonus of being located in one of the city’s most prestigious areas. Owning real estate in London is a smart investment.
Under Abramovich’s command, Chelsea have exploited the attraction of London to sign figures: Eden Hazard he turned down offers from Manchester United and Manchester City in 2012 when he was playing for Lille… and any new owner will be able to do the same when trying to sign players and managers.
Q: Tottenham, Arsenal and West Ham have substantially larger and more modern stadiums in London than Chelsea. United, City and Liverpool play in arenas larger than Stamford Bridge, with capacity for fewer than 42,000 fans. Chelsea last year scrapped plans to build a new stadium and estimates for 2018 put it at more than £1bn. Now it will cost even more, so is the stadium issue likely to put off bidders?
A: The reconstruction of the stadium is a necessity. However, it must be seen as an opportunity.
Interest rates remain low on the world market, so any new owner will be able to access cheap debt to raise funds for the stadium project. And there is also a legitimate opportunity for Chelsea to build a stadium that is regarded as a major global sporting destination, similar to New York’s Madison Square Garden.
Tottenham built a stadium that has hosted NFL games and world championship boxing events since it opened in 2019, and Chelsea would have similar opportunities with a new multi-purpose stadium.
Q: What challenges does Chelsea have to achieve success? It would compete with club-states like Manchester City and Paris Saint-Germain. There is also no salary cap to help keep costs down.
A: Achieving sustained sporting success while running a company that is disciplined in its management of revenues and costs is the fundamental challenge. To achieve this, the new owners will need to focus on growing their revenue streams and expanding their brand, fueling the need to continue to invest in player acquisition.
They must also focus on creating a clear identity for the club that goes beyond winning. For example, by training youth players. Over the last two or three years we have seen the emergence of Chelsea youth alumni in their first team such as Mason Mount, Reece James and Callum Hudson-Oloi. This model of budding talent and savvy signing helped Chelsea lift the Champions League title last season.
Q: How could the sale of Chelsea mark a milestone in the valuation of football clubs? What would be the new value of teams like Manchester United, Liverpool, Tottenham, among others?
A: It will undoubtedly “set the standard” among many other Premier League teams. However, all cases are different.
Chelsea has its recent winning record and the lure of being based in London, mixed with the need to build a new stadium. For their part, Tottenham have the new stadium, but they don’t have Chelsea’s winning lineage, and their north London location is far less prestigious.
Manchester United has history, commercial power and an incredibly strong brand globally. However, its staff and the stadium require large investments. Liverpool are similar to United and at the moment they are a winning team, but they need to maintain their success.
But certainly, whatever Chelsea’s final sale price is, it will give us an indicator of the value of the rest of the clubs.
Q: Are there other world-renowned sports brands on the market that might entice buyers to spend their efforts elsewhere?
A: The Denver Broncos are looking for a new owner and are among the six biggest franchises in NFL history, so they represent an attractive investment. The cases of the Broncos and Chelsea are similar, although they also have their differences. The NFL is a safer bet for investors because it has lower potential losses and its US television rights contract is tremendously large. The other side of the coin is that there is very little capacity to grow the Broncos’ brand globally.
However, soccer is the number one sport in the world and the Premier League is considered the best league in the world. Chelsea is the club of London and the British capital is one of the five most important cities in the world when it comes to acquiring assets in it. The Broncos’ case lies in playing it safe and a national (albeit huge) audience. Chelsea is a case of global growth and opportunity.
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Why is there so much interest in acquiring Chelsea?