Tensions have escalated between Chelsea FC co-owners Todd Boehly and Clearlake Capital since their £2.5bn takeover. Boehly, frustrated with stalled progress on strategic goals, is exploring buying out Clearlake, which owns a majority stake. The strained relations have cast uncertainty over Chelsea’s future despite record player spending.
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By Samuel Agini and Arash Massoudi
Ties between Todd Boehly and Clearlake Capital have frayed since the record £2.5bn takeover___STEADY_PAYWALL___
Relations between Chelsea FC’s co-owners have deteriorated to the point where US financier Todd Boehly is pushing to buy out the majority shareholder just over two years since joining forces to acquire the west London football club for a record £2.5bn, according to people familiar with the situation.
The tension between Boehly and investment firm Clearlake Capital, whose co-founder Behdad Eghbali has taken on a key role at Chelsea, has cast uncertainty over one of football’s top clubs and the most expensive ever to change hands.
Boehly is considering all options, including raising funds to buy out Clearlake, which manages more than $80bn in assets, but the investment firm has no desire to sell down its stake in Chelsea, according to people with knowledge of the matter.
Boehly has grown frustrated over an inability to progress on key strategic goals, including stadium expansion and building the Chelsea brand, according to a person close to the situation.
Clearlake, which owns a majority stake in the club, is open to talks with Boehly should he be willing to sell his stake, people close to the fund said, but there is no guarantee of a deal.
While neither side has made an offer to the other, Boehly believes that tensions have escalated to the point where the status quo has become unsustainable, according to people familiar with the situation. People close to Clearlake, however, characterised the business relationship as “cordial”.
The £2.5bn takeover came about when former owner Roman Abramovich was sanctioned in the wake of Russia’s invasion of Ukraine. The forced sale in 2022 fetched a record price, and was heralded as a symbol of sport’s evolution into an asset class worthy of institutional investment.
Clearlake and former Guggenheim Partners president Boehly beat rival bids from private equity tycoons Josh Harris and David Blitzer, and another group led by basketball moguls Stephen Pagliuca and Larry Tanenbaum. Sir Jim Ratcliffe, now a minority shareholder at Manchester United, also made a last-ditch attempt to buy the west London club.
Clearlake owns roughly 62 per cent of Chelsea but shares voting rights with Boehly, whose group also includes Swiss billionaire Hansjörg Wyss and Guggenheim Partners chief executive Mark Walter. The shared voting rights mean that the situation could result in stalemate, according to one of the people.
But the London club has struggled on the pitch since Clearlake and Boehly took control, despite spending more than €1.3bn on players and recouping €543mn from sales. In their first season in charge, the team finished 12th in the English top flight, its worst performance in almost three decades.
The club has also dismissed three managers since the acquisition. Chelsea, which won five league titles and two Champions League trophies under Abramovich, finished sixth last season.
This week Chelsea announced the departure of chief executive Chris Jurasek after 15 months at the club. Tom Glick, who preceded Jurasek as the club’s top business executive, left after less than a year. For the second year running, the team kicked off the new Premier League season last month without a main shirt sponsor.
The new owners are also yet to make material progress towards renovating or replacing Chelsea’s Stamford Bridge. The stadium’s 40,000 capacity lags behind major rivals in England and the rest of Europe. Chelsea’s owners raised hundreds of millions of dollars from US alternative asset manager Ares Management last year, with an eye on making stadium improvements or possibly moving to a new site.
Clearlake and Boehly declined to comment. The tensions between the two were previously reported by Bloomberg and The Daily Telegraph.
© 2024 The Financial Times Ltd.
Chelsea FC’s Backers Clearlake and Todd Boehly Weigh Ownership Options
By David Hellier and Giles Turner
Chelsea FC’s main shareholders are exploring their ownership of the English Premier League football club after little more than two years in charge, amid a deterioration in relations, people familiar with the matter said.
California-based private equity firm Clearlake Capital — Chelsea’s majority owner — and US businessman Todd Boehly are assessing whether they can potentially buy each other out, according to the people.
The relationship between Clearlake co-founder Behdad Eghbali and Boehly, who together led a hard-fought takeover of Chelsea in 2022, has deteriorated in recent months, according to the people, as a period of heavy spending at the club has failed to bring success on the field.
Differing opinions on Chelsea’s recruitment policy, the team’s underperformance and the failure to make progress on building a new stadium, have all contributed to the rift, the people said, asking not to be identified discussing confidential information.
Clearlake owns more than 60% of Chelsea, with Boehly holding the rest alongside US businessman Mark Walter and Swiss billionaire Hansjörg Wyss. Bloomberg News reported last year that Boehly was dialing back his involvement at Chelsea after a difficult first season in charge.
Both Clearlake and Boehly remain committed to the club and running it in a professional manner, the people said. Boehly and a representative for Clearlake and Eghbali declined to comment. A spokesperson for Chelsea didn’t provide comment.
Read More: America’s Love Affair With Investing in the Premier League Fades
The Clearlake, Boehly-led consortium acquired Chelsea from Russian oligarch Roman Abramovich in a £4.25 billion ($5.6 billion) deal. In the roughly two decades under Abramovich’s ownership, the club had risen to become one of the most successful teams in English football, winning multiple domestic honors, as well as trophies in elite European competitions.
While the new owners have spent more than £1 billion on acquiring players since taking over, Chelsea’s success has faded. The club has sought to balance its books and comply with Financial Fair Play regulations by offloading homegrown players, including fan-favorites like Conor Gallagher, and the sale of hotels close to its Stamford Bridge stadium in west London. In some cases, players, such as Brazilian winger Angelo Gabriel, have been bought and sold before playing a competitive game for Chelsea.
Boehly recently told Bloomberg News that Chelsea’s owners were “laying a long-term foundation, establishing a great leadership team and responding to the environment.”
Read also:
- Arsenal, Liverpool, or Chelsea? I can’t pick which football team to support: Howard Chua-Eoan
- Ubuntu Football Academy kicks off success for talented Cape Town soccer players – Casey Prince
- Why England’s star-studded football team struggles: Matthew Brooker
© 2024 Bloomberg L.P.
