Chelsea’s possession blues reveals the non-public fairness rip-off at its worst

Amid the tens of thousands of words about the chaotic start to Chelsea FC’s Premier League there has been one significant element missing from the raucous discussion.

Ownership is of critical importance to football clubs, as it is for all businesses – whether they are supermarkets, department stores or advanced aerospace and engineering companies.

Private equity proprietors and managers are often portrayed as offering a panacea for sclerotic, ill-run, publicly-listed companies and providing a route map for amateurishly-run sporting enterprises.

The proponents seek to bring the magic of debt-fuelled borrowing to an enterprise, and firmer, more focused management of underlying businesses. 

There are notable commercial (if not consumer) successes such as fintech innovator Worldpay, retailers Pets at Home and the turnaround and value creation at F1 motor racing.

But there also have been calamities: Debenhams, Asda and care home provider Southern Cross. Chelsea fell into private equity hands in May 2022. 

The club had been seized by HM Treasury from friend of the Kremlin Roman Abramovich, following Russia’s invasion of Ukraine.

The new owners were a consortium of investors under the title of BlueCo, led by Todd Boehly and majority-financed by California-based Clearlake Capital. The group acquired the club for $3billion (£2.4billion).

Clearlake controlled 60 per cent of the company, and Boehly and his partners 40 per cent.

Boehly became the public face and has an equal share of the club with Hansjorg Wyss and Mark Walter.

The winning Boehly team triumphed on price and because of a track record in not just running but turning around troubled sporting enterprises.

By the standards of his baseball team, the Los Angeles Dodgers, when Boehly took control of Chelsea it was in rude health.

But all that private equity has brought to Chelsea is some too-clever-by-half accounting.

To circumvent ‘fair play’ rules which limit transfer spending Boehly and co have brought financial engineering to the table. 

Instead of two-, three- or four-year contracts players are on ‘long leases’ of six to nine years, which allows their value to depreciate over the length of engagement.

This is a smart piece of accounting but it also means that when mistakes are made, the players on the biggest salaries are hardest to shift.

Instead, Chelsea born and bred young lions are cannon fodder to be sacrificed.

In 2021, under German coach Thomas Tuchel, the club won the most sought-after club trophy in the world, beating Manchester City’s superstars to become European champions.

The future looked bright with the Boehly consortium vowing to spend up to $1billion or more in upgrading or replacing Chelsea’s historic but sub-scale stadium at Stamford Bridge.

So far, little has been done. Stairways are narrow, steep and difficult. Loos are less than sanitary. It is the least impressive top club venue.

When the team was a reliable, trophy-delivering enterprise, the shortcomings were tolerable. All this despite Stamford Bridge sitting on one of the most valuable and large pieces of real estate. 

Abramovich had plans to pour £1billion or more into west London before he was ostracised.

It is easy to understand why there was so much confidence placed in Boehly and co. They turned the Dodgers from serial losers into World Series champions and developed a shining new field of play. 

They added UK commercial expertise in the shape of property magnate Jonathan Goldstein.

What could possibly go wrong? Football is a notoriously fickle enterprise but generally speaking a bottomless pit of cash, steady ownership and skilful management and coaching delivers trophies.

At Chelsea the opposite has been the case. A carefully assembled team of experience and youth has been demolished with many of the best players now at rival clubs.

Instead of assembling a well-functioning team the private equity owners embarked on a bizarre accumulation of a long list of would-be stars, the names of whom most supporters can barely recognise.

A £1billion splurge has resulted in one of the most bloated squads in soccer history with 54 players (at last count), eight of them out on loan.

Instead of steadiness they have brought the volatility of hedge fund traders to the club. The owners are treating their main assets, the huge talent of established stars, with contempt.

Expensively acquired and hard-working players such as Raheem Sterling and upcoming academy talents such as Conor Gallagher, after his standout season, are being humiliated and traded as if they were objects rather than people.

Anxious for speedy success, there is a third new manager in as many years in Italian Enzo Maresca, 44, who arrived from Leicester City with no direct experience of managing in the Premier League or conquering Europe. 

He replaced Mauricio Pochettino, who left by mutual consent, after delivering sixth place in the 2023-24 season.

The patience of long-standing, intelligent supporters with deep knowledge of the game and football finances has been tested. 

One, who has an acclaimed podcast, said she had ‘not turned the television on for the first time in 20 years’ for the start-of-season game against Manchester City.

A lifelong supporter and renowned lawyer and campaigner against racism in football messaged: ‘What a mess.’

The churn of players has left many fans begging for a guide to their own team of unknowns in the programme instead of more easily identifiable visitors.

Football has become ever more scientific, analytical and statistical. Techniques have been brilliantly deployed by teams such has Brighton and Brentford, which perform way above their weight in terms of spending power, size of stadium and international support.

But such mathematical precision only works when blended with skilled coaching, brilliant psychology and leadership.

Some 2,550 private equity barons in the UK benefit from a tax loophole, known as ‘carried interest.’

The industry defends itself on the grounds that it employs millions of people and is a huge contributor to the success of the City. But there is a tendency to sweep under the carpet the bad effects in terms of wasted jobs, an over-reliance on debt and an ability to circumvent good governance.

Chelsea shows the private equity scam at its worst, most culturally blind and uncaring.

It has delivered the worst of all worlds: a financially driven franchise on a journey to self-destruction.