One, if not two entire generations of Chelsea fans have grown up knowing nothing but the ownership of Roman Abramovich, the richest Chelsea fan in all the lands, and all that entailed in terms of moneys, sackings, and successes. But that 19-year-long era is officially over, and our ownership model now has a much more common look — the most common look in fact: a group (or family) of investors dialed in to the ways sports-business gets done in the modern commercial world, and hopefully still with a bit of sports-success in the meantime as well.
The club who have perhaps best combined those two ideas over the past half-decade or so have been Liverpool, so it’s unsurprising that Todd Boehly, speaking at a conference for the private equity types, would bring them up as a “great example” of what we would look to do at Chelsea as well.
(Also unusual: an owner who talks publicly!)
“If you look at the models that are very successful, Liverpool is a great model. Liverpool generates a couple of hundred million more revenue than Chelsea and they generate earnings, so I think there is an opportunity to compete.”
One might wonder why private equity types would want to invest in sports, but at least when it comes to football, they all believe that there’s a massive untapped market out there — and not just for the clubs but for the players as well. Football (soccer) is the world’s game after all, with billions of hungry consumers ready to consume content and merch.
“We think the way those clubs go to market is years behind the US model. We think the global footprint of this sport is really undeveloped. There are four billion fans of European football. There are 170 million NFL fans. The NFL generates $15 billion of media money every year. Global club football is a fraction of the NFL media money.”
“We are also going to be thinking about how do we get more revenue for the players. How we do make a business better for them, which today is really fragmented. Some guys have someone who does it, some work with an agent, some the clubs help. It is not thinking about how do I go to market as to turn these guys into businessmen.”
“I think the US is far ahead of that. If you look at LeBron James, for example, he has a whole business and a whole team dedicated to what’s not on the court. So I think there is opportunity to capture some of that American mentality into English sports and really develop them.”
Will any of this trickle down to the pitch as well? In theory, yes. A bigger pie means a bigger piece for everyone, though that also means it’s going to get even more competitive at the top — requiring more investment to keep the team competitive and the wider fanbase interested.
“Financial fair play is starting to get some teeth and that will limit ability to acquire players at any price. UEFA takes it seriously and will continue to take it seriously. [More teeth] means financial penalties and disqualification from sporting competitions.”
“The “Big Six” will become the “Big Seven” with the Saudi deal for Newcastle. We believe there is going to be opportunity for everyone to win. There will be a reorganization of the English football league. The opportunity to turn this into a really more valuable asset is available.”
-Todd Boehly; source: Bloomberg
All that may sound somewhat unsavory, and it certainly is unsavory when compared to some mystical and mythical ideal for the game of football — which arguably never existed at the top level in such a pure and noble form, though that’s never stopped that narrative from pining for the good old days of proper football innocence. But it’s always been about money, with rare exceptions.
Liverpool have shown it’s possible to combine the business and the actual sporting aspects of football successfully in the modern era. We already have the foundations to follow their model as well, just have to keep making smart decisions.