Skip to main content

Deepening intsability at Chelsea

The biggest story at Chelsea is finally out in the open: a little more than two years after their £2.3billion ($3.02bn) takeover of the club from sanctioned Russian oligarch Roman Abramovich, majority shareholder Clearlake Capital’s marriage to co-owner Todd Boehly is in tatters.

Rumblings of discontent have been audible behind the scenes for some time, but specific accusations of a breakdown in relations between Boehly and Clearlake co-founder Behdad Eghbali — the most visible and actively engaged member of Chelsea’s ownership consortium over the past 18 months — were always denied until now.

Now, in the wake of a Bloomberg report last week that revealed Clearlake and Boehly are each exploring the ownership options, all parties have for the first time acknowledged the scale of the rift. People familiar with Boehly’s thinking say he considers his relationship with Clearlake and Eghbali to be “irreconcilable”, and others claim the two men barely speak to one another.

Amid the many other points of contention, there is broad agreement that three factors in particular have contributed to the fracturing of Chelsea’s owners:

  • A fundamental cultural difference in how the Premier League club should operate, with Clearlake and Boehly each believing the other has sought to unduly influence sporting decisions
  • The decision to mutually part ways with head coach Mauricio Pochettino at the end of last season, which exposed the first public fault lines between Boehly and the club’s leadership structure
  • A lack of tangible progress in the stadium project over the last two years, with the club not yet resolved on a revamp or rebuild of Stamford Bridge or moving to a nearby site at Earl’s Court.

Boehly and associates have received approaches from investors in recent weeks with a view to buying out Clearlake, while Clearlake has aspirations to buy out Boehly.

In the two years since Clearlake and Boehly’s takeover, Chelsea have disrupted and dominated football’s global transfer market, committing more than £1.2billion in transfer fees and generating more than £500m in sales. Players have been bought and sold at a speed and scale that has been as divisive as it has been dizzying.

In Boehly’s view,  the major continuing tension with Clearlake: is a cultural difference over how the co-owners operate.   Boehly’s approach, as evidenced by his work with Major League Baseball’s Los Angeles Dodgers, is to hire specialists and allow them to get on with their jobs, while Clearlake, particularly Eghbali, has taken a role considered by Boehly to be micromanaging — a source close to Boehly’s side described Eghbali as being “obsessed with player trading”.

People familiar with Boehly’s thinking say he wanted Chelsea to retain Pochettino, but he did not formally veto when the final decision was mutually reached. These sources add he considers Eghbali to be trigger-happy and the driver of the call to move on — an accusation that is strenuously denied on Clearlake’s side.

There is also a belief on the Clearlake side that being overruled by Chelsea’s sporting leadership on Pochettino was the tipping point for Boehly to begin exploring his options within the ownership structure — a move that has, in recent days, spilt out into the public discourse as media reports about a potential bid to gain full control of the club.

The tensions between Boehly and Eghbali tested Pochettino’s patience during his tumultuous single season as head coach at Stamford Bridge, and the way his departure played out exposed the fault lines among Chelsea’s owners, which have now fractured.

Boehly’s investment is personal money and he views his sporting investments as long-term, lifetime plays. Clearlake, as a fund, is managing money on behalf of investors.

Chelsea’s time in stadium purgatory since Abramovich paused his ambitious redevelopment project indefinitely in 2018 has cost them; their 40,173-seater historic home is now only the ninth-largest by capacity in the Premier League, placing a relatively low ceiling on matchday revenue even with the unpopular decision to raise general admission season-ticket prices, for the first time in more than a decade, for the 2024-25 season. The club also do not have a front-of-shirt sponsor this season, further increasing the need to up prices.

Last year’s tentative target for Chelsea to be playing in a new home by 2030 already looks optimistic and there will come a time when either revamping or rebuilding Stamford Bridge are the only viable options. 

There is suspicion on the Clearlake side that this schism being played out in the public domain is actually a ploy to disguise the true motive of Boehly’s camp, which they believe is an attempt to put pressure on them to make a big offer to purchase his stake.

Nobody knows how or when this will end.  What is clear, however, is that the public litigation of these grievances only deepens the sense of disorienting instability Chelsea have failed to escape since the ‘For Sale’ sign went up outside Stamford Bridge more than two years ago.

 

 

Comments

Popular posts from this blog

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000.  The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts.  Money brought in from football has gone up too. Match day income is

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to depl