Club World Cup a financial boost for Chelsea

Tomorrow night, the global champions of club football will be crowned in MetLife Stadium, the culmination of Fifa’s new month-long tournament. Either Champions League winners Paris Saint-Germain or Conference League title-holders Chelsea will win international bragging rights (of a kind) for the next four years.

But regardless of the outcome in New Jersey on Sunday, the competition has been a huge financial boon for Chelsea and its private equity owners Clearlake Capital.

Since the £2.5bn takeover in 2022, the club has been on a record-breaking spending spree. According to estimates from Transfermarkt, Chelsea have forked out €1.6bn in the last three years on new signings, considerably more than any other team in Europe. The pace of additions has not slowed. More than €200mn has been committed this summer to bring the likes of João Pedro and Liam Delap to Stamford Bridge.

To help finance all this, Clearlake and a group of minority shareholders led by club chair Todd Boehly have made the most of the Premier League’s financial rule book. The club has sold assets to BlueCo, its parent company, including a hotel and its women’s team, in order to free up space in the budget for more signings. It also turned to Ares Management, the credit specialist investment firm, for an extra $500mn in 2023.

The Club World Cup has provided a significant financial boost, with no strings attached. By reaching the final, Chelsea have earned as much as $115mn in prize money.

The global shopfront of the new tournament could also help in the search for a front-of-shirt sponsor — Chelsea have started the last two Premier League seasons without one. Securing a new top partner could net the club another £50mn a year. The team also qualified for the Champions League next season.

Chelsea had income in 2023/24 of €545mn, according to Deloitte. That number is likely to jump significantly in next year’s accounts.

Additional funds are not only welcome but necessary. Chelsea were fined €31mn last week by Uefa for breaching its financial rules, which are in some ways tighter than those of the Premier League. For one, Uefa does not recognise asset sales to related parties as income in its calculations.

As part of the settlement with the regulator, Chelsea’s owners have promised to improve its financial position and keep within Uefa’s rules in the coming years — or face further fines.

It will take some time to figure out whether the Club World Cup has been a success for Fifa, for streaming partner DAZN and the various other stakeholders. Much will depend on your perspective. But if you’re a Chelsea fan (or shareholder), it’s been a triumph.

It's no deal say Spurs insiders over Taiwanese takeover

Senior figures at Tottenham Hotspur insisted on Friday that they had not been informed of any deal to sell Daniel Levy’s stake in the club. A business group, Eight Sports Capital — which is said to include a billionaire Taiwanese financier — claimed that it had an agreement in place to buy a 24.99 per cent stake in ENIC, the club’s majority owners, from Levy, who owns 29.88 per cent. The Times has been told Ng Wing Fai and Brooklyn Earick form part of the group, having both been linked previously to potential takeovers of the Premier League club. The Taiwanese businessman, Richard Tsai, is also said to be part of the consortium. He is reportedly worth £7 billion. Last year Earick, the former DJ and tech entrepreneur, was part of an attempted £4.5 billion takeover, which was “unequivocally rejected” by Spurs. An ENIC spokesperson said: “We can confirm that neither ENIC nor THFC are aware of any sale by Daniel Levy’s Family Trust of its minority stake in ENIC, THFC’...

Reports about Charlton sale exaggerated

Reports have appeared in The Guardian and elsewhere that Charlton has been put up for sale. Richard Cawley is an authoritative local journalist who runs a South London Sport substack site. He reached out to the club yesterday evening to ask for comment on The Guardian’s article. Early indications from the club have been that nothing has changed since the story about them seeking investment, except that it is now a different company doing it. Charlton have since managed to consolidate their place in the Championship, avoiding an instant return to League One, with their women’s side promoted to the WSL, returning to the top flight for the first time since 2007, although staying there is likely to be costly. It would be counter-intuitive for owners Global Football Partners not to progress the club when looking for investment, that the focus remains on driving it forward, that their spend this summer is in line with long-term planning and will see an increase in wages spent on players...

Hull City's 'strange' loan

When football finance guru Kieran Maguire seems flashing lights in a club's loan deal, I become concerned. He is the leading football finance expert in the UK. Hull City have borrowed £55m against their stadium and training ground yet they should get £30m from the Premier League before long. What is going on? https://www.bbc.co.uk/sport/football/articles/cpwel48y51do

The Political Economy of Football V2

Search This Blog