Chelsea FC raises $500mn from Ares

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Chelsea FC has raised about $500mn in fresh investment from Ares Management as the Premier League side’s US owners look for ways to fund expensive stadium improvements and build stakes in more football clubs.

Ares, the US alternative asset manager, has provided the capital injection, according to two people with knowledge of the matter. One of the people described it as a preferred equity deal.

Chelsea, which is controlled by a consortium including private equity group Clearlake Capital and US financier Todd Boehly, is looking for ways to boost revenue after an expensive transfer window.

Ares, Clearlake and Boehly declined to comment. Chelsea did not immediately respond to a request for comment.

Under Clearlake and Boehly, who acquired the club for £2.5bn from sanctioned Russian billionaire Roman Abramovich in May 2022, Chelsea has spent hundreds of millions of pounds on refreshing its squad of players.

“We have bought an asset that is very coveted by many other potential buyers,” said Clearlake’s co-founder José Feliciano, speaking at the IPEM private equity conference in Paris. “Ultimately, we are extremely aligned with that supporter and fan base because the best way to make our club more valuable is to win.”

However, the new owners have yet to see their investment pay off on the pitch, at a club where fans are accustomed to winning trophies.

Chelsea finished 12th in the league last season, missing out on what would have been a lucrative qualification for the Uefa Champions League. The new owners have already parted ways with two managers and appointed former Tottenham Hotspur coach Mauricio Pochettino to lead the side.
However, the Blues have won just one of five league matches this season, leaving them 14th in the table. Commercially, the club has failed so far to conclude a deal for a front-of-shirt sponsor, a slot that would usually command tens of millions of pounds a year. 

“The team had a tough first season, our first season,” Feliciano said, but added: “We have a tremendous amount of talent.”

The west London club is deciding whether to redevelop its Stamford Bridge home ground or to build a new stadium at Earl’s Court. The 40,000-capacity Stamford Bridge stadium limits Chelsea’s ability to generate revenues and compete against rivals with larger and more modern facilities.

But Feliciano said the company could be better run from a financial perspective. “I think what we are trying to do is reduce the salary and essentially the opex [operating expenses] of the business by over $100mn per year,” Feliciano added.

Separately, Boehly and Clearlake agreed to acquire French team RC Strasbourg in June.

Ares has accumulated a series of interests across the sport, including in Atlético de Madrid and Eagle Football, the group that acquired French side Olympique Lyonnais last year. Last September, Ares said it had raised $3.7bn to invest in sports leagues, teams, as well as media and entertainment companies.

The alternative asset manager typically invests across the capital structure, striking hybrid deals that can include upside from equity, but also protection through financing mechanisms that draw on Ares’s expertise in credit markets.