Once upon a time, the private equity industry saw a famous, scalable club like Chelsea as a fool-proof investment. But that misconception has collapsed this season, says one football finance expert.
Chelsea’s 2-1 victory over Tottenham last night gives them a glimmer of hope of giving incoming manager Xabi Alonso Europa League football next season. Now on their sixth permanent manager and with multiple billions of pounds committed, 2026-27 could be the last chance BlueCo have to redeem themselves in the eyes of the Chelsea fans who haven’t already made up their minds.
Unlike Chelsea, who are one of the most recent Premier League clubs to change hands, Spurs have had nearly 25 years of continuous ownership by ENIC Sports. Yes, Daniel Levy has now left as chairman, but he remains the second-largest shareholder after Joe Lewis.
Before Todd Boehly bought Chelsea alongside Clearlake Capital and a group of other investors, he seriously considered taking over or making a significant investment in Tottenham. One of his key business partners, Jonathan Goldstein, was formerly a Spurs season ticket holder and was keen on the deal.
In the end, whether because of concerns on the buy or the sell side, that investment didn’t materialise and Boehly ended up at Stamford Bridge in a takeover which cost his consortium about £2.5bn, plus another £1.75bn in pledged future funding. Fast-forward to 2026 and BlueCo would need to sell the club for £5bn-plus to get anywhere near a profit, such has been the extent of their investment.
Should Chelsea branch out into other sports? Or stick to football?
An NBA franchise could be extremely lucrative, but would it be against the soul of the club?
Chelsea FC v Paris Saint-Germain FC - UEFA Champions League 2025/26 Round of 16 Second Leg
Photo by Robin Jones/Getty Images
In the four intervening years, Boehly has extended his sports empire. Last year, he bought a significant stake in The Hundred cricket franchise Trent Rockets alongside Goldstein and, with fellow Chelsea and Los Angeles Dodgers shareholder Mark Walter, he now owns the NBA’s LA Lakers.
His equity in the Lakers is easily the most valuable in his sports portfolio. Usually valued at around £7.5bn by sports business experts, the team dwarfs Chelsea. And recently, Boehly has reportedly looked to deepen his ties with the NBA by investing in its planned new European expansion.
Franchises in NBA Europe are said to be valued at up to £750m, but there has been scepticism about whether the business fundamentals can justify that sort of price. As a result, the NBA has reportedly pledged over £2bn in start-up money to help get the league off the ground.
It is striking that, in stark contrast to the methodology used to value the likes of Chelsea, would-be investors in NBA Europe are expecting concrete return on investment based on a specific timeline.
Denver Nuggets v Los Angeles Lakers - Game Three
Photo by Kevork Djansezian/Getty Images
Unlike Chelsea, who have lost £200-300m at the operating level every year under BlueCo, the NBA Europe valuations are predicated on empirical evidence and cash flow, says University of Liverpool football finance lecturer Kieran Maguire, speaking exclusively to The Chelsea Chronicle about Boehly’s plans.
“Clubs are often valued based on multiples of seven or eight times revenue because the thinking was that you have zero chance of relegation and probably a 70-80 per cent chance of European football every season,” says the Price of Football podcast host.
“However, Spurs have blown up that model this year – that was the take-home from a blog post I read recently from sports investment expert Michael Broughton.
“What you have with American franchise owners is that they all have the same objective, which is to make a financial return. That is inconsistent with what we see in European football and the Premier League. Here, you have profit maximisers, utility maximisers and so on: some people are in it for the direct return on investment, whereas others see the political influence they get from owning a Premier League club.
DISCUSS: BlueCo must leave for Chelsea to be successful again…
Or is there a future with BlueCo at Chelsea?
“Alternatively, you could be an owner who just really loves football and the club is a trophy asset, therefore the financial return is not treated as a priority.
“Unless you get a hive mindset among all the owners, it is going to be difficult to value clubs reliably. As a result, you are going to get some inflated valuations. They are trading on the scarcity factor, as much as anything.
“With NBA Europe specifically, I wonder where the eyeballs are going to come from. That is something which Boehly will have to analyse and do the homework on, because basketball doesn’t have the same cultural reach in Europe as it does in America. Not in the UK, at least.”
Join Our Newsletter
Receive a digest of our best Chelsea content each week direct to your mailbox