Chelsea have had an eventful 2022 and undergone a great deal of transformation. New owners, new head coach and plenty of new people behind the scenes.
A takeover of £4.25billion was always going to have significant ramifications for the club as an ownership group led by Todd Boehly and Clearlake Capital, represented by founders Behdad Eghbali and Jose E. Feliciano, looked to transform Roman Abramovich's set up into a business they could work with.
Efficiency and communication were quickly highlighted as areas to improve, with the group from the outset explaining the commitment to the men's first team, women's side and youth set-up. Chelsea's investment in the transfer market so far has backed that up.
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However, the takeover has been met with trepidation from some corners, with off-handed suggestions such as an all-star game being met with heavy criticism and Clearlake's position as an investment firm, understandably leading to some suspicion.
Speaking at Bloomberg's Bloomberg Invest event, Clearlake capital founder and co-controlling owner of Chelsea, Feliciano divulged what owning Chelsea has been like so far, why they invested and what comes next. Take a look at the transcript below:
Chelsea takeover was not something that people necessarily expected Clearlake Capital to do but not out of the blue. Take us into the thinking of buying a professional football team in London...
Feliciano: "Forget it's Chelsea Football Club and the Premier League. We are talking about situation where we had a forced seller, a very unusual situation where basically the government of the UK was forcing the sale of the asset. You had an asset that even though people would consider it a prize asset it was not really run as a business, it was run for other purposes. Profit was not the ultimate goal, or one of the more significant goals of the business. At the same time, it was a business that most people would call a beachfront property, one of the best properties in that sector, in that league in this case.
"Again when you think about sports, what are we really talking about? We're talking about live content, media and how to monetise that media depends on some of the things we've talked about - technology, data, trying to understand consumer behaviour.
"Now go back to Chelsea, we thought we had a really interesting opportunity to buy a business in a very unique situation where there was a forced seller, significant parts of the buyer market were not able to access the transaction. We felt all the core competencies of Clearlake came into play. On top of that we were able to partner with Todd Boehly and his group, a group that has a lot of experience in other significant leagues and significant teams, the Dodgers and the Lakers etc. In many ways, it was again the prototypical Clearlake type of transaction where we had a great partner, a really interesting situation, we were buying at what we thought was a great, very interesting price and a significant opportunity to transform the business and create a lot of value.
"Then, if you add on top of that the overlay that the English Premier League in our opinion is one of the better leagues to invest, one of the ones with the most significant upside on a long-term basis, we got pretty excited about it."
What's it being like owning something so public?
"It's been fascinating. In the past 24 months we've probably done a dozen transactions, six or seven which had an interprice value greater than the value of Chelsea. Most people in this room will have no idea about the, IPG, Cornerstone, nobody has a clue but Chelsea everybody has an opinion, a lot of people have an opinion, particularly in Europe.
"We knew this was a transaction that was going to be a lot more visible, a lot more high profile. We have purposefully not been front and centre in many ways in the transaction and our partner Todd Boehly is chairman of the business and he has done a great job so far of leading us through what was a very difficult transition, owner transition and more recently coach transition, which was interesting.
"There have been some plusses and minuses to be honest with you. It has definitely increased our profile, significantly in Europe, Middle East, Asia, here in the US a little bit as well, though obviously football or soccer is a little bit less popular here than other places in the world. We're comfortable with it because we think it fits very well with our investment strategy.
"We think the potential for value creation is very significant and it fits very well with what we do, so we're very comfortable with it. It definitely is unique, when you get to watch every week and kind of get a feeling for how well or badly you are doing, that's a unique perspective. Normally you wait until the end of the month to get the report from the CEO and the CFO, here you get to watch it on TV.
Ultimately what we're trying to build is a long term, sustainable business that can increase in value significantly and that means a lot more than winning or losing on the pitch. That's important as a brand, as a media property, as a team, as a club but we're also trying to establish and build and put in place the right building blocks to have a great business in three years, five years, seven years and a lot of work we are doing behind the scenes trying to do just that.
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Made the investment through the fund, that brings a different set of responsibilities?
"We think we have incredible opportunity to double revenue. We think we have one of the best media properties and sport properties in the world where we can get to a £1billion of revenue.
"We have hidden assets. For example, we have the Chelsea women's football club that's arguably a top three women's football club in the world. It's a completely undervalued asset right now. There's no reason why that property should not be producing several hundred million dollars of revenue in it's own right, being a billion dollar-plus or at least a half a million dollar-plus media property.
"We think there's a lot of opportunities embedded in the company that we bought, it just happens to be Chelsea Football Club. A club that in some cases that has fans where the family has been fans for five generations. That's what is unique and we care about our supporters, that's extremely important for us, it's part of the DNA of the club and we are not going to be successful if we leave our supporters and fans behind. That's unique.
"We have a different type of stakeholder that you normally wouldn't have in other companies. Then again, we are used to having stakeholders, there's employees, customers, suppliers. In every company you have different types of stakeholders, it just so happens here a very significant stakeholder is that supporter fanbase."
Which professional league is best for long-term investment?
"If I had to rank it. We have a lot of respect for the NFL. It's probably the best run league in the world. The dynamics and the interplay and how revenue is distributed in each one of these leagues is a little bit different. I would say the NFL, if you were to take a generic NFL team that may be the best investment in the world. You get one out of 32 teams and you get a one over 32 share of the NFL forever. That's a great investment. The prospect for the NFL is fantastic and the league has done a great job of addressing some of the issues they've had in the past.
"The English Premier League you have to analyse it on a team by team basis but as a group or as a league, I do think it arguably has the most upside in the world. The Superbowl is probably watched by a 150million plus people. Every week we broadcast our games to over 180 countries to over 800 million people. The World Cup is going to happen in November, the final of the World Cup will be watched by over a billion people. Those numbers are staggering.
"Chelsea Football Club alone has over 100 million social media followers. The impact, the global reach that we have in the English Premier League, particularly the top six or seven teams is unique, impossible to replicate by pretty much any other team, in any other league.
"I think we do have a really important base, the broadcast revenue, when you think about broadcasting, when you think about the future of sports, potentially betting, potentially the idea of consuming space. As my partner Todd Boehly would say, 'less from a wholesale basis but from a retail basis', ie each one of those 100 million-plus social media followers being able to access snippets of the game or the back stories. We have seen how live content can transform a sport. We were talking about Formula 1 and 'Drive to Survive' earlier in our conversation backstage. There's a million great stories to tell about our league which I think have not been told. You see snippets of that or you see the beginning of that with series like 'All or Nothing' but I think the potential for global impact, to create a global business in the English Premier League, and we think Chelsea is the right vehicle for that, is amazing and just the beginning."
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