Chelsea performed better under Abramovich

Chelsea's owners are rational actors so what is their strategy?

Under the ownership of free-spending oligarch Roman Abramovich Chelsea Football Club lost about £1mn a week for almost two decades. The losses racked up by the club’s current owners have made the Abramovich era appear restrained by comparison.

Chelsea this month reported a £262 mn pre-tax loss in 2024-25, a record for a Premier League club, as owners Clearlake Capital and financier Todd Boehly try to wean the club off Abramovich’s millions.

When US investment firm Clearlake and financier Boehly bought Chelsea for £2.5 bn almost three years ago, the football industry expected a new era of financial rigour at the west London club. But they have since spent about €1.7bn (£1.5bn) on players, parted ways with four head coaches and have yet to agree on a critical revenue driver: whether to modernise Chelsea’s existing stadium or move elsewhere. With the club at risk of missing out on a place in next season’s lucrative Champions League, football executives are questioning how Chelsea’s owners will make a return on their substantial investment.

Chelsea is the first team ever bought by Clearlake, which was better known for investing in the technology and consumer sectors. The Santa Monica-based firm owns more than 60 per cent of the club and its co-founder and managing partner, Behdad Eghbali, has emerged as a key decision maker.

Boehly, whose mentors include Guggenheim Partners chief Mark Walter and junk bond pioneer Michael Milken, has tasted success in sports. After backing Walter’s takeover of the Los Angeles Dodgers in 2012, the baseball team went on to win its first World Series title in 32 years. Their bet on Chelsea was predicated on the belief that elite European football clubs, which trade at a discount to US sports teams despite the sport’s greater global popularity, were undervalued.

Shortly after the deal, Clearlake co-founder José E Feliciano talked up the opportunity to grow Chelsea’s revenue to £1bn. Chelsea’s owners, who withheld £150mn of the purchase price to cover costs related to questionable actions taken under Abramovich, have put in place new private equity-style financing. At the centre of this is a $500mn payment-in-kind note provided by Ares Management to Chelsea’s holding company, 22 Holdco.

The club’s owners have spent €1.75 bn signing talented young players in the hope that they have greater resale value, which should enable them to eventually reduce their reliance on external financing. Chelsea have partly offset the spending splurge with €921mn of player sales.

While Abramovich’s reign was often chaotic, Chelsea won 17 major trophies, including five Premier League titles and two Champions League trophies, in that time. The only silverware of the Clearlake era so far is the Club World Cup and the European third-tier Uefa Conference League.