Chelsea are up for sale, with owner Roman Abramovich, the Russian oligarch, enlisting the Raine Group, a New York investment bank, to find a buyer willing to meet his asking price of £3 billion for the reigning Champions League holders and FIFA Club World Cup champions.
For the super-wealthy individuals and private equity investment companies interested in buying a sporting franchise, the opportunity to own A-list football clubs as globally renowned as Chelsea rarely comes around. Sources have told ESPN that Raine Group have already received at least 300 expressions of interest from potential buyers. And although the vast majority of those will quickly be discounted as lacking the funds or business plan to buy the club -- one of the Premier League's most successful teams -- sources have said that at least 10 are regarded as credible, with more expected to emerge before the March 15 deadline for first indications of a bid.
But with a £3bn valuation, which would make Chelsea the most expensive football club in history, and a stadium at Stamford Bridge that is significantly smaller and less modern than those of their domestic and European rivals, are Chelsea as appealing as they first appear?
ESPN has spoken to Mike Forde, a former Chelsea director from 2007 to 2013 and now executive chairman of Sportsology, the New York-based company that has advised U.S. ownership groups buying major sporting assets in Europe and America, to discuss the race to buy to Chelsea and why there is so much interest in acquiring the club.
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Q. What is the appeal of Chelsea to a prospective new owner?
A. Chelsea are already a globally recognised sporting brand. Their success in the Premier League and Europe -- two Champions Leagues, two Europa Leagues -- over the past 20 years means they are synonymous with winning and being at the forefront of the game. But they are also a Premier League team, and that is a huge attraction.
The Premier League's global media deal between 2022 and 2025 is worth £5.3bn and it will continue to grow, so that has obvious appeal to any investor. Within that, there is the opportunity for Chelsea grow their commercial strategy in the way that Manchester United have done under the Glazer family.
Despite their successes on the pitch, Chelsea remain a long way behind United commercially (Chelsea generated £153.6 million in commercial revenue in 2021 compared to United's £232m), and any new owner could grow that income significantly. Chelsea could also be transformed into a global platform, similar to the Red Bull Group or City Football Group, which now amounts to 10 teams across the world, and develop a Chelsea Football Group to boost revenue and visibility.
And while the stadium at Stamford Bridge requires modernisation and enlargement, doing that presents an opportunity as much as a challenge because of potential naming rights and the ability to become a finance-generating multi-event venue.
Q. Does Chelsea's London location make them more attractive to a new owner?
A. Aside from the potential opportunities mentioned previously, do not underestimate the value of being able to leverage Chelsea's status as a club based in London for everything from recruitment to attracting sponsors. There are more billionaires on the planet than ever before; life is short for them, so they want to enjoy the business opportunity and a chance to live in one of the world's best cities. London is a huge appeal.
London is a financial hub with transport links to every corner of the globe, and Chelsea also have the additional advantage of being located in one of the most prestigious areas of the city. Owning real estate in London is a smart investment.
Under Abramovich, Chelsea have exploited the appeal of London to attract star players -- Eden Hazard rejected Manchester United and Manchester City to sign from Lille in 2012 -- and any new owner would be able to do this when recruiting players and managers.
Q. Tottenham, Arsenal and West Ham all have substantially larger and more modern stadiums in London than Chelsea. United, City and Liverpool all play at bigger grounds than Stamford Bridge, which holds fewer than 42,000 fans. Plans to build a new stadium were scrapped last year, and the estimate in 2018 was that it would cost £1bn. It will cost even more now, so is the grounds issue likely to discourage bidders?
A. The stadium rebuild is a necessity, but it should be seen as an opportunity.
Interest rates remain low on the global market, so any new owner would be able to access cheap debt to raise funds for the stadium project. And there really is a chance for Chelsea to build a stadium that would be regarded as a destination venue for world sport in a similar fashion to Madison Square Garden in New York.
Tottenham have built a stadium that has already hosted NFL games and world title boxing events since opening in 2019, and Chelsea would have similar opportunities with a new multi-purpose stadium.
Q. What are the challenges for making Chelsea succeed? They would be competing with state-owned clubs, such as Man City and Paris Saint-Germain, and there is no salary cap to keep costs down.
A. Sustaining on-pitch success while running a disciplined revenue/costs business is the primary challenge. To do that, the new owners would have to focus on revenue growth and brand expansion, feeding the need to continue to invest in players.
They should also focus on a clear club identity beyond just winning, i.e., young players from the academy. Over the past two or three years, we have seen the fruits of Chelsea's academy emerge in the first team with the likes of Mason Mount, Reece James and Callum Hudson-Odoi. This model of emerging talent and smart recruitment helped Chelsea win the Champions League last season.
Q. What will the Chelsea sale do for football ownership in terms of setting a bar? How will Man United/Liverpool/Tottenham, etc., now be valued?
A. It will certainly "mark the asset" of a lot of other teams in the Premier League, but they are all different.
Chelsea have their winning recent history and the appeal of London, tempered with the necessity of a new stadium, while Tottenham have the new stadium, but none of the winning pedigree of Chelsea and a less prestigious location in the north of London.
Manchester United have the history, the commercial power and an incredibly strong global brand, but they have a stadium and a team which both need investment. Liverpool are similar to United and are winning right now, but they have to sustain it.
But, yes, whatever the final figure that Chelsea are sold for, it will give an indication as to what the other clubs may be worth.
Q. Are they any other global sporting brands on the market that could tempt buyers elsewhere?
A. The Denver Broncos are searching for a new owner and, historically, they are a top-six NFL franchise, so they are an appealing investment. The Broncos and Chelsea are similar, but they have their differences. The NFL is a safer bet for investors because there are fewer potential losses and a huge U.S. broadcasting deal. The flip side is that there is very little capacity to grow the Broncos brand globally.
Football, however, is the No. 1 global sport, and the Premier League is the top world league. Chelsea is the club of London, and London is one of the top five cities in the world to own an asset. The Broncos is all about safety and a domestic (albeit huge) audience; Chelsea is about growth and global opportunity.
