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Chelsea is the last Premier League club bought by the Americans


THE EFFECTS OF WAR are seldom limited to the battlefield. The sport felt a wave from Russia invasion of Ukraine almost immediately, with the deviation of the national football team from the World Cup and its athletes from the Paralympic Games in Beijing. Now the forced sale of the West London football club “Chelsea”, which has belonged to Roman Abramovich since 2003, oligarch under the sanctions of the British government, is going to transfer the prestigious Russian asset into American hands.

On May 7, a consortium led by Todd Boi, owner of the Los Angeles Dodgers baseball team, including California-based private investment firm Clearlake Capital, agreed to buy Chelsea for £ 2.5 billion ($ 3.1 billion). Mr. Abramovich, his Briton assets are frozen, I will not see a penny. (He promised to give the proceeds to “all the victims of the war in Ukraine”, but what will happen to the money will be decided by the government.)

The amount, which is considered the highest paid for a sports team, reflects not only Chelsea’s status in the game (third place in the Premier League and last year’s European champions), but also the commercial appeal of English football, particularly for American investors. Chelsea will be the eighth of the 20 clubs in the league in which Americans have a large share (see table).

Other U.S. owners have similarly added Premier League teams to broad portfolios of sporting assets. Stan Kroenke of Arsenal also has franchises in American football, soccer, hockey and basketball. The Glazer family, which controls Manchester United, owns the American football team Tampa Bay Bacchanaries. For American investors, says Simon Chadwick of Emlyon Business School, “often it’s all about selling” (Manchester United even had an official paint partner). The Premier League, he said, is undermining the global appeal with which American sport cannot be compared.

Television is the main source of income for clubs. An annual survey of European football finance conducted by the consulting firm Deloitte shows that in the three full seasons before COVID-19 appeared, the six leading clubs in England in terms of revenue received 45% of their revenue, or 4.3 billion euros (4, $ 9 billion). from broadcasting – which depends in part on the position in the league and on participation in the European competition. Another 38% came from commercial sources (such as sponsorships and merchandise) and the rest from gaming days. If profits fall short, as happened during the pandemic, investors in major football clubs will still see their assets (rather than homes in the real estate market) evolving in value.

Chelsea’s weakest link is match revenue. In addition to buying Mr. Abramovich, Mr. Bolly and his colleagues have promised to invest in the modernization of Stamford Bridge, the aging Chelsea Stadium. His age and size – he numbers about 40,000 people – limit the club’s ability to earn. Chelsea’s revenue from playing days is second to that of other leading clubs, including its rivals from north London, Arsenal and Tottenham, which have new stadiums with more than 60,000 seats.

However, redevelopment will be difficult. Stamford Bridge is fenced, and London land is expensive. Both Mr. Boyle and Clearlake should envy John Henry, the American owner of Liverpool Football Club (and the Boston Red Sox baseball team). To upgrade its Anfield Stadium, Liverpool bought and demolished the neighboring streets of the terraced houses. Next year, the capacity will exceed 60 thousand, which is a third more than in 2016.

Mr. Abramovich’s purchase of Chelsea marked the beginning of a new era in the game: foreign owners, well-known managers and generous spending. He secured an extraordinary success, bringing five domestic championships (Chelsea’s only previous victory was in 1955) and two European ones. But he considered the club both an expensive toy and a commercial proposition; the club lost hundreds of millions, which were covered by interest-free loans. The new owners will be a different band.

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