{"id":6743,"date":"2022-05-23T16:50:12","date_gmt":"2022-05-23T15:50:12","guid":{"rendered":"https:\/\/www.twentyfirstgroup.com\/?p=6743"},"modified":"2022-06-17T15:57:48","modified_gmt":"2022-06-17T14:57:48","slug":"off-the-pitch-column-chelsea-takeover","status":"publish","type":"post","link":"https:\/\/www.twentyfirstgroup.com\/off-the-pitch-column-chelsea-takeover\/","title":{"rendered":"Off The Pitch Column: Chelsea &#8211; A takeover like no other"},"content":{"rendered":"<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding first  avia-builder-el-0  el_before_av_three_fifth  avia-builder-el-first  \" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_three_fifth  flex_column_div av-zero-column-padding   avia-builder-el-1  el_after_av_one_fifth  el_before_av_one_fifth  \" style='border-radius:0px; '><div  style='padding-bottom:10px; ' class='av-special-heading av-special-heading-h2  blockquote modern-quote  avia-builder-el-2  avia-builder-el-no-sibling  thought-leadership-heading '><div class ='av-subheading av-subheading_above  ' style='font-size:15px;'><p>Thought Leadership<\/p>\n<\/div><h2 class='av-special-heading-tag '  itemprop=\"headline\"  >Off The Pitch Column: Chelsea &#8211; A takeover like no other<\/h2><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-3  el_after_av_three_fifth  el_before_av_one_fifth  \" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding first  avia-builder-el-4  el_after_av_one_fifth  el_before_av_three_fifth  column-top-margin\" style='border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  av_inherit_color '  style='color:#80808a; '  itemprop=\"text\" ><h4><span class=\"span-reading-time rt-reading-time\"><span class=\"rt-label rt-prefix\"><\/span> <span class=\"rt-time\"> 13<\/span> <span class=\"rt-label rt-postfix\">MIN READ<\/span><\/span><\/h4>\n<\/div><\/section><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock thought-leadership-author '   itemprop=\"text\" ><h3><strong>By AJ Swoboda<\/strong><\/h3>\n<hr \/>\n<h3>May 23, 2022<\/h3>\n<\/div><\/section><br \/>\n<div  style='height:5px' class='hr hr-invisible   avia-builder-el-7  el_after_av_textblock  avia-builder-el-last '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div><\/p><\/div>\n<div class=\"flex_column av_three_fifth  flex_column_div av-zero-column-padding   avia-builder-el-8  el_after_av_one_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><p><div  class='avia-image-container  av-styling-    avia-builder-el-9  el_before_av_hr  avia-builder-el-first  avia-align-center '  itemprop=\"image\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><div class='avia-image-overlay-wrap'><img decoding=\"async\" class='wp-image-6747 avia-img-lazy-loading-not-6747 avia_image' src=\"https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Chelsea-Takeover.jpg\" alt='' title='Chelsea Takeover' height=\"800\" width=\"1200\"  itemprop=\"thumbnailUrl\" srcset=\"https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Chelsea-Takeover.jpg 1200w, https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Chelsea-Takeover-300x200.jpg 300w, https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Chelsea-Takeover-1030x687.jpg 1030w, https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Chelsea-Takeover-768x512.jpg 768w, https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Chelsea-Takeover-705x470.jpg 705w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/div><\/div><\/div><br \/>\n<div  style='height:5px' class='hr hr-invisible   avia-builder-el-10  el_after_av_image  avia-builder-el-last '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div><\/p><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-11  el_after_av_three_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding first  avia-builder-el-12  el_after_av_one_fifth  el_before_av_three_fifth  column-top-margin\" style='border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock thought-leadership-share '   itemprop=\"text\" ><h3>Thought Leadership<\/h3>\n<p>Inspired by what you&#8217;re reading? Why not subscribe for regular insights delivered straight to your inbox.<\/p>\n<\/div><\/section><br \/>\n<div  class='avia-button-wrap avia-button-left  avia-builder-el-14  el_after_av_textblock  el_before_av_textblock ' ><a href='https:\/\/www.twentyfirstgroup.com\/contact\/news-signup\/'  class='avia-button  avia-color-theme-color   avia-icon_select-no avia-size-small avia-position-left '   ><span class='avia_iconbox_title' >Subscribe<\/span><\/a><\/div><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '   itemprop=\"text\" ><hr \/>\n<h3><\/h3>\n<\/div><\/section><br \/>\n<div  class='av-social-sharing-box  avia-builder-el-16  el_after_av_textblock  avia-builder-el-last  '><div class='av-share-box'><h5 class='av-share-link-description av-no-toc '>Share this story<\/h5><ul class='av-share-box-list noLightbox'><li class='av-share-link av-social-link-facebook' ><a target=\"_blank\" aria-label=\"Share on Facebook\" href='https:\/\/www.facebook.com\/sharer.php?u=https:\/\/www.twentyfirstgroup.com\/off-the-pitch-column-chelsea-takeover\/&#038;t=Off%20The%20Pitch%20Column%3A%20Chelsea%20%E2%80%93%20A%20takeover%20like%20no%20other' aria-hidden='false' data-av_icon='\ue8f3' data-av_iconfont='entypo-fontello' title='' data-avia-related-tooltip='Share on Facebook' rel=\"noopener\"><span class='avia_hidden_link_text'>Share on Facebook<\/span><\/a><\/li><li class='av-share-link av-social-link-twitter' ><a target=\"_blank\" aria-label=\"Share on Twitter\" href='https:\/\/twitter.com\/share?text=Off%20The%20Pitch%20Column%3A%20Chelsea%20%E2%80%93%20A%20takeover%20like%20no%20other&#038;url=https:\/\/www.twentyfirstgroup.com\/?p=6743' aria-hidden='false' data-av_icon='\ue8f1' data-av_iconfont='entypo-fontello' title='' data-avia-related-tooltip='Share on Twitter' rel=\"noopener\"><span class='avia_hidden_link_text'>Share on Twitter<\/span><\/a><\/li><li class='av-share-link av-social-link-linkedin' ><a target=\"_blank\" aria-label=\"Share on LinkedIn\" href='https:\/\/linkedin.com\/shareArticle?mini=true&#038;title=Off%20The%20Pitch%20Column%3A%20Chelsea%20%E2%80%93%20A%20takeover%20like%20no%20other&#038;url=https:\/\/www.twentyfirstgroup.com\/off-the-pitch-column-chelsea-takeover\/' aria-hidden='false' data-av_icon='\ue8fc' data-av_iconfont='entypo-fontello' title='' data-avia-related-tooltip='Share on LinkedIn' rel=\"noopener\"><span class='avia_hidden_link_text'>Share on LinkedIn<\/span><\/a><\/li><\/ul><\/div><\/div><\/p><\/div>\n<div class=\"flex_column av_three_fifth  flex_column_div av-zero-column-padding   avia-builder-el-17  el_after_av_one_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock thought-leadership-main-content '  style='font-size:20px; '  itemprop=\"text\" ><p><span style=\"font-weight: 400;\">The Chelsea takeover has been one of a kind. The reason for the sale, the hurried nature of the sales process, the UK government involvement, the ensuing bidding war between multi-billion pound investment groups \u2013\u00a0we may never see a more remarkable sports club transaction.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">News has recently broken that Roman Abramovich and the UK government have finally struck a deal that will allow the transaction to move forward. The consortium led by American and Los Angeles Dodgers, Sparks, and Lakers owner Todd Boehly is just a few dotted i\u2019s and crossed t\u2019s away from completing the most expensive takeover in football history. The final price tag is reportedly just over \u00a34.25bn \u2013 two billion more than when Boehly made a pre-pandemic offer at the end of 2019.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Supporters have massively benefited both from Roman Abramovich\u2019s decision to not seek repayment of the club\u2019s debt to Fordstam Ltd and from The Raine Group\u2019s competitive bidding process. In addition to having already been at the table for the club, the new consortium brought a competitive advantage in their commitment to invest an additional \u00a31.75bn into Stamford Bridge, the women\u2019s team, the academy, Kingsmeadow, and the Chelsea Foundation.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The football club itself is selling for \u00a32.5bn.\u00a0<\/span><\/p>\n<\/div><\/section><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-19  el_after_av_three_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding first  avia-builder-el-20  el_after_av_one_fifth  el_before_av_three_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_three_fifth  flex_column_div av-zero-column-padding   avia-builder-el-21  el_after_av_one_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock thought-leadership-main-content '  style='font-size:20px; '  itemprop=\"text\" ><p><b>Club Valuation &#8211; Is Boehly overpaying?\u00a0<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Twenty First Group\u2019s valuation model puts Chelsea at a \u00a32bn football club, suggesting that Boehly and his group are paying a half-billion pound premium to call West London home.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Despite all the headlines and obvious appeal, the Blues are currently not even the most valuable club in London. However, this consortium of seasoned investors believes the significant extra cost is worth the opportunity to own one of the most unique sports clubs in the world. Their success will hinge on their capacity to swing Abramovich\u2019s former club towards profitability while maintaining Chelsea\u2019s existing sporting strengths.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Without a doubt, Chelsea is a rare football club with attractive fundamentals. The club has a strong performance outlook, a highly productive academy, a glamorous postal code, and a growing global brand that is the envy of most clubs in the world. Any club with these criteria can credibly demand a significant premium.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Considering the above, you would perhaps think that Chelsea should be valued considerably higher than \u00a32bn. But hurting the club\u2019s overall valuation are a couple operational red flags that Boehly\u2019s group must quickly address if they\u2019re interested in a successful stewardship of the club.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Firstly, a reliance on Abramovich\u2019s deep pockets has led to Chelsea\u2019s systematic heavy transfer spend and operating losses; thankfully, the club is at least moderately efficient in their capacity to spend on player wages. And secondly, the Blues have some real limitations on future revenue growth, compounded by the fact much of football is still recovering from the disruption of the Covid pandemic.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While European football is a different beast to North American sports, Boehly can at least tout genuine experience with turning around a historic franchise in another of the world\u2019s major cities with the LA Dodgers and with operating at the pinnacle of glitz and glamour in sport with the LA Lakers. The group is betting big on the belief they can now do the same in West London and operate Chelsea like a business.<\/span><\/p>\n<\/div><\/section><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-23  el_after_av_three_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding first  avia-builder-el-24  el_after_av_one_fifth  el_before_av_three_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_three_fifth  flex_column_div av-zero-column-padding   avia-builder-el-25  el_after_av_one_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock thought-leadership-main-content '  style='font-size:20px; '  itemprop=\"text\" ><p><b>Performance Outlook<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Chelsea sit in a uniquely comfortable position within the highly competitive Premier League. They have been the fifth best club in the world the last two seasons and have been comfortably the third strongest team in the Premier League. While a reasonable distance from the top two (Chelsea have finished below Manchester City and Liverpool in each of the last five seasons), the club are a clear \u201cbest of the rest\u201d.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Chelsea\u2019s current performance level translates to a 13% steady-state probability of winning the league, but a 73% chance of Champions League qualification and 18% chance of Europa League qualification. And of course the Blues are part of a small subset of European clubs where the risk of top-flight relegation is of no concern.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Provided they are able to continue the winning culture currently at Stamford Bridge, Boehly et al will enjoy almost as much \u201cclosed European Super League\u201d comfort as is possible in the football world today. <\/span><\/p>\n<\/div><\/section><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-27  el_after_av_three_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding first  avia-builder-el-28  el_after_av_one_fifth  el_before_av_three_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_three_fifth  flex_column_div av-zero-column-padding   avia-builder-el-29  el_after_av_one_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><div  class='avia-image-container  av-styling-    avia-builder-el-30  avia-builder-el-no-sibling  avia-align-center '  itemprop=\"image\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><div class='avia-image-overlay-wrap'><img decoding=\"async\" class='wp-image-6744 avia-img-lazy-loading-not-6744 avia_image' src=\"https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Picture-1.png\" alt='' title='Picture 1' height=\"574\" width=\"904\"  itemprop=\"thumbnailUrl\" srcset=\"https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Picture-1.png 904w, https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Picture-1-300x190.png 300w, https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Picture-1-768x488.png 768w, https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Picture-1-705x448.png 705w\" sizes=\"(max-width: 904px) 100vw, 904px\" \/><\/div><\/div><\/div><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-31  el_after_av_three_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding first  avia-builder-el-32  el_after_av_one_fifth  el_before_av_three_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_three_fifth  flex_column_div av-zero-column-padding   avia-builder-el-33  el_after_av_one_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock thought-leadership-main-content '  style='font-size:20px; '  itemprop=\"text\" ><p><span style=\"font-weight: 400;\">Typically, there are two ways an owner can improve their club: spend more and spend better.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Unfortunately for most owners of English football clubs, the country\u2019s competitive environment is far from financially efficient compared to other leagues in the world \u2013 putting the group\u2019s goal of profitable operations at a clear disadvantage from the start.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Over the last five years, less than 20% of men\u2019s football clubs playing at least one season in the Premier League have performed better on the pitch than clubs around the world with comparable wage bills. For example, Everton\u2019s wage bill has tended to have been in the top 20 clubs in the world, but according to our World Super League model their performance has consistently been outside the top 40.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Twenty First Group\u2019s club spending analysis places Chelsea\u2019s last five years at just under the 60th percentile of wage efficiency relative to the already inefficient English market. And of the \u201cBig Six\u201d Premier League clubs, Chelsea is the fourth best at turning their spend into on-pitch performance \u2013 behind Manchester City, Liverpool, and Tottenham.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A significant factor for Boehly\u2019s group having success will be improving the efficiency with which the club ca<\/span><span style=\"font-weight: 400;\">n secure results. The club already spends enough on wages that the club could virtually guarantee a Champions League group stage qualification, even by reducing their wage bill, if they spent their money as well as the more efficient clubs in England.<\/span><\/p>\n<\/div><\/section><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-35  el_after_av_three_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding first  avia-builder-el-36  el_after_av_one_fifth  el_before_av_three_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_three_fifth  flex_column_div av-zero-column-padding   avia-builder-el-37  el_after_av_one_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><div  class='avia-image-container  av-styling-    avia-builder-el-38  avia-builder-el-no-sibling  avia-align-center '  itemprop=\"image\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><div class='avia-image-overlay-wrap'><img decoding=\"async\" class='wp-image-6745 avia-img-lazy-loading-not-6745 avia_image' src=\"https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Wage-Efficiency.png\" alt='' title='Wage Efficiency' height=\"542\" width=\"904\"  itemprop=\"thumbnailUrl\" srcset=\"https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Wage-Efficiency.png 904w, https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Wage-Efficiency-300x180.png 300w, https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Wage-Efficiency-768x460.png 768w, https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Wage-Efficiency-705x423.png 705w\" sizes=\"(max-width: 904px) 100vw, 904px\" \/><\/div><\/div><\/div><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-39  el_after_av_three_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding first  avia-builder-el-40  el_after_av_one_fifth  el_before_av_three_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_three_fifth  flex_column_div av-zero-column-padding   avia-builder-el-41  el_after_av_one_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock thought-leadership-main-content '  style='font-size:20px; '  itemprop=\"text\" ><p><span style=\"font-weight: 400;\">One area the club may choose to lean into to increase wage-efficiency is their proven capacity to produce high quality talent, as younger players typically demand lower wages. Only Manchester<\/span><span style=\"font-weight: 400;\"> United have developed more Premier League players than Chelsea. And the club\u2019s most recent coaches (Thomas Tuchel and Frank Lampard) have both shown a willingness to embrace and cultivate an environment within the club that is willing to give valuable minutes to deserving academy products.\u00a0<\/span><\/p>\n<\/div><\/section><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-43  el_after_av_three_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding first  avia-builder-el-44  el_after_av_one_fifth  el_before_av_three_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_three_fifth  flex_column_div av-zero-column-padding   avia-builder-el-45  el_after_av_one_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock thought-leadership-main-content '  style='font-size:20px; '  itemprop=\"text\" ><p><b>Profligate Spending<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Despite the club\u2019s ability to perform relatively \u2018as expected\u2019 on the pitch relative to wages, Roman Abramovich\u2019s Chelsea has still managed to burn through cash like few others in recent decades.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the last 10 years, Chelsea have sustained over \u00a3750m in operating losses, over a quarter-billion more than any other \u201cBig Six\u201d club. Yes, Covid has negatively impacted them as it has all other football clubs. But even prior to the pandemic, Chelsea were averaging close to \u00a370m in annual operating losses.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While Chelsea have managed to keep their first-team wage bill financially efficient, the club\u2019s dealing in the transfer market is an expensive habit. Spending \u00a3308m more on player inflows than outflows over the last five seasons, Chelsea are amongst three Premier League clubs with the largest net spend in the transfer market.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It is safe to assume that Boehly\u2019s group won\u2019t want to bankroll the same indulgent spending\u00a0 Abramovich has over the last two decades without a more financially sustainable practice in place. This will be a big organisational challenge to navigate in the coming years, particularly if the group are looking to maintain their current rosy performance outlook. <\/span><\/p>\n<\/div><\/section><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-47  el_after_av_three_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding first  avia-builder-el-48  el_after_av_one_fifth  el_before_av_three_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_three_fifth  flex_column_div av-zero-column-padding   avia-builder-el-49  el_after_av_one_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><div  class='avia-image-container  av-styling-    avia-builder-el-50  avia-builder-el-no-sibling  avia-align-center '  itemprop=\"image\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><div class='avia-image-overlay-wrap'><img decoding=\"async\" class='wp-image-6746 avia-img-lazy-loading-not-6746 avia_image' src=\"https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Spending.png\" alt='' title='Spending' height=\"568\" width=\"904\"  itemprop=\"thumbnailUrl\" srcset=\"https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Spending.png 904w, https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Spending-300x188.png 300w, https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Spending-768x483.png 768w, https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Spending-705x443.png 705w\" sizes=\"(max-width: 904px) 100vw, 904px\" \/><\/div><\/div><\/div><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-51  el_after_av_three_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding first  avia-builder-el-52  el_after_av_one_fifth  el_before_av_three_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_three_fifth  flex_column_div av-zero-column-padding   avia-builder-el-53  el_after_av_one_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock thought-leadership-main-content '  style='font-size:20px; '  itemprop=\"text\" ><p><b>Revenue Generation<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Necessity is the mother of innovation. Unfortunately for Chelsea\u2019s new owners, the club has not had that necessity under Abramovich. The new ownership consortium will need to bring (or hire) some serious firepower to help the club unlock new means of revenue generation\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Despite their strong on-pitch performance, Chelsea has not been a top-three revenue-producing club in England since 2014. Their capacity for revenue generation is low relative to their spending habits, making any transition to a financial sustainable model even more difficult.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Coming off a Champions League triumph last season, Chelsea\u2019s actual broadcast revenue distributions are about as high as their expected share of broadcast revenue could ever be. The club has earned more money from European Competition over the last decade than any other English club except for Manchester City.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While other clubs may look to stronger on-field performance as a means to boost broadcast revenues, Chelsea have little room for growth in this area. The club will need to maintain their recent high standard of sporting performance otherwise they face a risk of these revenues declining (see: AS Roma and Manchester United). Without an expectation in future seasons for Chelsea to perform better domestically than currently, and with the club\u2019s steady-state chance of UCL qualification at 64%, Boehly and his group will need to rely on future media rights value growth to grow their broadcast revenues.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Another core driver for low revenue generation has been that since 2014, Chelsea has witnessed some of the lowest commercial revenue growth of the \u201cBig Six\u201d. The last eight years have seen the club nearly tie Manchester United for the smallest absolute growth in commercial revenues, who began with a 73% higher base and have been a weaker team.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Lastly, having not redeveloped Stamford Bridge, the club has stagnated in their matchday revenues this decade (ignoring the pandemic) while other clubs have been growing their revenues and building for the future. While matchday revenue makes up a minority of the club\u2019s income, it can prove to be important at the margins especially during times of poorer sports performance (again, see: Manchester United). Boehly\u2019s group will feel these constraints exacerbated for years to come while several of their London neighbours (Tottenham, Brentford, Fulham, Crystal Palace) begin to realise the full benefits of their stadium improvements.<\/span><\/p>\n<\/div><\/section><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-55  el_after_av_three_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding first  avia-builder-el-56  el_after_av_one_fifth  el_before_av_three_fifth  column-top-margin\" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_three_fifth  flex_column_div av-zero-column-padding   avia-builder-el-57  el_after_av_one_fifth  el_before_av_one_fifth  column-top-margin\" style='border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock thought-leadership-main-content '  style='font-size:20px; '  itemprop=\"text\" ><p><b>Conclusion\u00a0<\/b><\/p>\n<p><span style=\"font-weight: 400;\">There is unlikely to be a more unique and high profile football takeover anytime soon as Chelsea\u2019s. With a preferred bidder named and the UK government reportedly blessing the transaction, the club can hopefully look to the future and move on from the recent controversy, uncertainty, and operational threats they have been faced with.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Boehly and his group have a prized asset in Chelsea and have certainly paid for it. Now can they help the club develop sustainability off the pitch while matching the performance on the pitch that they have enjoyed in recent times?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you would like to find out more about Twenty First Group\u2019s Investment Intelligence services, please get in touch with <\/span><a href=\"https:\/\/www.twentyfirstgroup.com\/contact\/get-in-touch\/\"><span style=\"font-weight: 400;\">AJ Swoboda<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0\u00a0<\/span><\/p>\n<p>You can read an example of our investment intelligence work <a href=\"https:\/\/www.twentyfirstgroup.com\/portfolio-item\/american-investment-groupclub-acquisition\/\">here<\/a>.<\/p>\n<p><em>This article was originally published by\u00a0<a href=\"https:\/\/offthepitch.com\/a\/analysis-chelsea-takeover-couple-operational-flags-boehlys-group-must-address\">Off The Pitch<\/a>.<\/em><\/p>\n<\/div><\/section><\/div><div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-59  el_after_av_three_fifth  el_before_av_codeblock  column-top-margin\" style='border-radius:0px; '><\/div><\/p>\n\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":16,"featured_media":6747,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_oasis_is_in_workflow":0,"_oasis_original":0,"inline_featured_image":false,"footnotes":""},"categories":[54,33],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Off The Pitch Column: Chelsea - A takeover like no other - Twenty First Group Limited<\/title>\n<meta name=\"description\" content=\"As Todd Boehly&#039;s takeover of Chelsea moves closer, we analysed the takeover and the issues that need to be addressed for Off The Pitch.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.twentyfirstgroup.com\/off-the-pitch-column-chelsea-takeover\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Off The Pitch Column: Chelsea - A takeover like no other - Twenty First Group Limited\" \/>\n<meta property=\"og:description\" content=\"As Todd Boehly&#039;s takeover of Chelsea moves closer, we analysed the takeover and the issues that need to be addressed for Off The Pitch.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.twentyfirstgroup.com\/off-the-pitch-column-chelsea-takeover\/\" \/>\n<meta property=\"og:site_name\" content=\"Twenty First Group Limited\" \/>\n<meta property=\"article:published_time\" content=\"2022-05-23T15:50:12+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-06-17T14:57:48+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.twentyfirstgroup.com\/wp-content\/uploads\/2022\/05\/Chelsea-Takeover.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Adam Watson\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@TwentyFirstGrp\" \/>\n<meta name=\"twitter:site\" content=\"@TwentyFirstGrp\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Adam Watson\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"17 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.twentyfirstgroup.com\/off-the-pitch-column-chelsea-takeover\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.twentyfirstgroup.com\/off-the-pitch-column-chelsea-takeover\/\"},\"author\":{\"name\":\"Adam Watson\",\"@id\":\"https:\/\/www.twentyfirstgroup.com\/#\/schema\/person\/4147d3109b8463d5c10d1c799230e65f\"},\"headline\":\"Off The Pitch Column: Chelsea &#8211; 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