The recent sale by Roman Abramovich of Chelsea Football Club (Chelsea) may be seen as finally cementing some certainty for Chelsea fans but is the sale as good as they think?
Chelsea was acquired for circa £4.25bn by a Todd Boehly-led consortium which was backed by Californian private equity firm, Clearlake Capital (Clearlake). The amount paid for Chelsea is a record for a sports team and it sees Todd Boehly’s consortium sharing voting rights with Clearlake. On the face of it, Chelsea now has the stability it has needed for months, but what does it actually mean to be owned by a private equity firm?
Whilst Chelsea is now able to spend money on players, the approach to purchasing players is likely to change. Gone are the days when players could be purchased on a whim. Most private equity firms’ approach to spending is far more analytical, meaning that any player purchase will likely have to be backed up significantly by statistics. It also seems unlikely that we will see the same merry-go-rounds we have previously seen in terms of coach appointments.
As well as changing the way in which spending occurs at Chelsea, private equity firms often invest time and resources in streamlining operations, cutting costs and improving performance. So could that means that redundancies could be expected at Chelsea?
Whilst Chelsea’s new owners have pledged to be around for the long-term, what does that actually mean? Typically, private equity firms seek an exit (i.e. a sale of the business/asset acquired) within 5-10 years, and so it remains to be seen just how long Chelsea’s stability will last for.
Finding the right buyer for your business is crucial. If you need advice on selling your business, whether to private equity backed companies or otherwise, get in contact with me for some advice at a.brooker@teacherstern.com.
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