Chelsea owners hold talks with Ares over raising funds

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The US owners of Chelsea FC have held talks with Ares Management and several other investors about raising funds as they plot an extensive stadium upgrade and look to add to their network of football clubs.

The west London club is deciding whether to redevelop its Stamford Bridge home ground or build a new stadium at Earl’s Court.

Chelsea is also looking for further acquisitions after making its first move into multiclub ownership in June with the purchase of French team RC Strasbourg. Portugal is an important target market as the Premier League club’s owners look to emulate the network model favoured by Manchester City. 

New investment in Chelsea might come in preferred equity financing or other debt-like instruments that offer downside protection, said people familiar with the matter. A fundraising could be in the region of $500mn or higher, two of them added.

US investors Clearlake Capital and Todd Boehly acquired Chelsea from sanctions-hit Russian billionaire Roman Abramovich last year in a rapid process following Russia’s full-scale invasion of Ukraine. Guggenheim Partners chief Mark Walter and Swiss billionaire Hansjörg Wyss are also shareholders in Chelsea.

The group paid £2.5bn for the club, beating three rival consortiums that made it to the final round of bidding. 

Their talks on taking new investment, first reported by Bloomberg, come as the owners of Manchester United consider selling the famed football club, in a move that could value it in the region of $6bn, including debt. That process, which has dragged on since November, has generated inbound investment interest in Chelsea.

Chelsea’s ownership group and Ares declined to comment.

Since taking control of Chelsea last year, its US owners have invested heavily in the playing squad. The club broke records after spending £600mn on new players last season.

But the team finished 12th in the Premier League, its worst performance in decades, while two head coaches were sacked during the season. 

With just a week to go until the start of the new campaign, the club has yet to agree a deal for a new shirt sponsor, while its low finish last season means it will not earn additional television revenue from playing in European competitions.

Chelsea made a pre-tax loss of £121mn on revenues of £481mn in the year ended June 2022.

Ares is also a backer of Inter Miami, the football club co-owned by former England captain David Beckham, who negotiated an option to buy into a Major League Soccer franchise while he was still playing the game. Inter Miami said earlier on Friday that Ares had invested another $75mn in exchange for preferred equity, taking the total to $225mn since September 2021.

Ares also provided the bulk of the financing for John Textor’s €800mn purchase of Olympique Lyonnais last year. Lyon has since joined Textor’s multiclub group Eagle Football, which also owns Brazilian table-toppers Botafogo and about 40 per cent of Crystal Palace in the Premier League. 

Ares, which had offered to fund two of the rival bidding groups for Chelsea, raised $3.7bn last year to invest in sport, including leagues and teams, as well as media and entertainment companies. The group has previously backed Spanish club Atlético Madrid, the San Diego Padres baseball team, and McLaren Racing, which competes in Formula One.