Chelsea owners and board

[Miguelito07]

2 hours ago, ROTG said:

Maths don’t add up. 
another 2b on a stadium would mean the club would need to be sold for 6bn to recoup their money. 

I was under the impression that they budgeted for the stadium rebuild? 

[Ham]

4 hours ago, ROTG said:

Maths don’t add up. 
another 2b on a stadium would mean the club would need to be sold for 6bn to recoup their money. 

 

1 hour ago, Miguelito07 said:

I was under the impression that they budgeted for the stadium rebuild? 

They did.  The purchase price was £2.5bn, not £4.25bn.  The excess includes the squad rebuild and stadium. 

[blueboy1905]

Watching the Champions league double header tonight makes me yearn for the good old days. Meanwhile we're sweating over qualifying for the Europa Black & Decker Conference league which is on a par with a third place play off. With the current clowns in charge following their idiotic policy can anyone see us dining at the top table in the next ten years??

[McCreadie]

10 hours ago, Ham said:

 

They did.  The purchase price was £2.5bn, not £4.25bn.  The excess includes the squad rebuild and stadium. 

They will have invested a minimum of £4.25b. They will want a (significantly higher) return based on that figure, not based on the sale price. 

[east lower]

6 hours ago, McCreadie said:

They will have invested a minimum of £4.25b. They will want a (significantly higher) return based on that figure, not based on the sale price. 

Unless they are prepared to exit to mitigate further losses or the people putting up the money say sell, we can make more money by putting that money in ??????

The quantum of the amounts are way beyond most people’s comprehension but scale it back and it’s like me investing £10k and I’ve lost a fifth and it looks like I may lose more when I thought I was going to make a return after year 2. What do I do, stick with it but it looks like it may be year 5 before it might break even , before it might make a profit - or do I exit stage left taking my money with me and put it somewhere with less risk?

The sums albeit very large to me (and maybe you) are just proportional to the people investing and they could be prepared to take a loss, if it means protecting their money.

[RDCW]

53 minutes ago, east lower said:

Unless they are prepared to exit to mitigate further losses or the people putting up the money say sell, we can make more money by putting that money in ??????

The quantum of the amounts are way beyond most people’s comprehension but scale it back and it’s like me investing £10k and I’ve lost a fifth and it looks like I may lose more when I thought I was going to make a return after year 2. What do I do, stick with it but it looks like it may be year 5 before it might break even , before it might make a profit - or do I exit stage left taking my money with me and put it somewhere with less risk?

The sums albeit very large to me (and maybe you) are just proportional to the people investing and they could be prepared to take a loss, if it means protecting their money.

Agreed. The sunk cost fallacy. They won't be like mug punters, chasing losses. My view is that their strategy is entirely based on the sale of Stamford Bridge in its premium property location. They will seek to provide a new venue and facilitate the redevelopment of the Bridge. That is the only way they can make money on this deal and must have been their intention all along.

[Sciatika]

7 hours ago, McCreadie said:

They will have invested a minimum of £4.25b. They will want a (significantly higher) return based on that figure, not based on the sale price. 

Bit of both, probably. I don't know the details of the deal, but I imagine that they will focus on the ROI of capital involved. Some of that money will be deployed and must generate a return. The rest will be in investments ready to be liquidated should the need arise. These investments would separately generate a return with nothing to do with us. They may also choose to borrow to meet the need. So, for instance, let's say they budget £100m but spend £20m; the remaining £80m might consist of £50m in short and medium-term investments that can be liquidated as necessary, and the rest will be borrowed on the markets if the need arises. Only the £20m needs to generate an appropriate ROI, though clearly there are costs in deploying more money.

[Ham]

7 hours ago, McCreadie said:

They will have invested a minimum of £4.25b. They will want a (significantly higher) return based on that figure, not based on the sale price. 

I get that.  I was countering the suggestion that the sale price was £4bn and that £2bn stadium costs would mean a break-even figure of £6bn. 

[MickyDroy]

It's increasingly hard for me to see how we can avoid getting into a really vicious circle at this point. Problems seem to be piling up everywhere and it includes running PSR-compliance issues, ongoing investigation for historic FFP breaches, breakdown in stadium plans (the hired architects recently left), apathy amongst supporters, no European football/income, commercial challenges, unbalanced and poor squad, poor manager and one could go on.

Can we sell enough players before June 30th this summer to barely comply for another season for example and will we fail to do so and be deducted points next season? That's an open ended question at the moment and that's just one of very many unfortunately.

If we manage to escape deductions on PSR for another season we may yet be deduction points for Roman & Marinas FFP trickery in previous year. So there's a lot of bad stuff happening at the club at the moment and it's increasingly hard for me that we'll ever get out of it.

 

 

 

[Max Fowler]

19 minutes ago, MickyDroy said:

It's increasingly hard for me to see how we can avoid getting into a really vicious circle at this point. Problems seem to be piling up everywhere and it includes running PSR-compliance issues, ongoing investigation for historic FFP breaches, breakdown in stadium plans (the hired architects recently left), apathy amongst supporters, no European football/income, commercial challenges, unbalanced and poor squad, poor manager and one could go on.

Can we sell enough players before June 30th this summer to barely comply for another season for example and will we fail to do so and be deducted points next season? That's an open ended question at the moment and that's just one of very many unfortunately.

If we manage to escape deductions on PSR for another season we may yet be deduction points for Roman & Marinas FFP trickery in previous year. So there's a lot of bad stuff happening at the club at the moment and it's increasingly hard for me that we'll ever get out of it.

The one thing in our favour is we have a lot of money to burn. If the stadium gets built we will have a lot more revenue coming in - it needs it tbh.

My concern is like you suggest, we are heading into a downward spiral which is very difficult to get out of. We are about to spend 15-20 years in the football wilderness like Arsenal did / Man United are doing unless we do a 180 and reverse the model right now. But all the owners want to do is double down with patience.

I doubt we will fall off being a top 6 club long term, but it also looks increasingly unlikely we will ever become one of the top clubs in the league under these owners

IMO precisely why we need more fan pressure to get Clownlake Out! (unless they change)

Edited April 10 by Max Fowler

[Sciatika]

We need to be careful of what we wish for. Getting rid of the current lot, even if possible, may bring a bunch a whole lot worse.

[MickyDroy]

4 minutes ago, Max Fowler said:

The one thing in our favour is we have a lot of money to burn. If the stadium gets built we will have a lot more revenue coming in - it needs it tbh.

My concern is like you suggest, we are heading into a downward spiral which is very difficult to get out of. We are about to spend 15-20 years in the football wilderness like Arsenal did / Man United are doing unless we do a 180 and reverse the model right now. But all the owners want to do is double down with patience.

I doubt we will fall off being a top 6 club long term, but it also looks increasingly unlikely we will ever become one of the top clubs in the league under these owners

IMO precisely why we need more fan pressure to get Clownlake Out! (unless they change)

To me it seems we've burned almost all of it already. They committed to £1.75bn in investments but they are well over a billion already and the stadiums essentially not been touched. Holding company debt is at £500 million and rising and the clubs running on a operations loss that's quite mindblowing.

[Max Fowler]

14 minutes ago, MickyDroy said:

To me it seems we've burned almost all of it already. They committed to £1.75bn in investments but they are well over a billion already and the stadiums essentially not been touched. Holding company debt is at £500 million and rising and the clubs running on a operations loss that's quite mindblowing.

I think our owners collectively have more money than Roman tbf.

The conern is that we've spent so much that with the new FFP restrictions not seen under the early Roman era it will be increasingly difficult to spend to claw our way back.

But ultimately I think we have the money but the collective profile of player and manager we are buying is completely wrong

[Miguelito07]

1 hour ago, RDCW said:

My view is that their strategy is entirely based on the sale of Stamford Bridge in its premium property location.

So a rebuild of SB was never in their plans?

[east lower]

3 hours ago, RDCW said:

Agreed. The sunk cost fallacy. They won't be like mug punters, chasing losses. My view is that their strategy is entirely based on the sale of Stamford Bridge in its premium property location. They will seek to provide a new venue and facilitate the redevelopment of the Bridge. That is the only way they can make money on this deal and must have been their intention all along.

It genuinely wouldn't surprise me if we rent a ground - Look at the costs of construction currently, they're astronomical and the bureaucracy involved in any sort of construction project just increasing and driving up the overall cost. Cheap land such as where Everton are building their stadium is not available, raw materials are higher, cost of skilled labour is rising. They originally budgeted about £500m and it's going to actually cost close to £1b.

I would think that you could multiply that by a factor of 1.5 to 2 times that final figure for a new stadium in or around West/South-West London - Plus any costs associated with diversion of existing infrastructure - Railways, Utilities etc. 

Revenue per game IF we could fill a 55'000 seater stadium - 14'000 seats for 19 home games at an average cost of say £75 per seat =  Close to £20m per season. Additional revenues for food, drink, merchandise - £1m per game, So £21m per game + Any additional revenue hawking out the stadium to other sports and concerts etc (just like Spuds) + £10m per year optimistically. 

£2'000m /£31m per season = 64 years just to pay for the cost of the stadium. 

Now I understand the need for additional revenues to operate the business and get us back to the top table and keep us there. But why'd would you sink even more billions into us? If FFP & sustainability rules change then get us sold and let's get bankrolled, cause that's what Man City and Newcastle will do and the very moment those rules change - Which I believe that they will, don't know when but they will.

[RDCW]

12 hours ago, Miguelito07 said:

So a rebuild of SB was never in their plans?

I can't see how they believed they could make money for their investors by purchasing and running a football club. No-one makes the kind of profits out of football which would cover the level of investment they have made. Consequently they must have had some other strategy in mind. The most obvious upscalable asset is the land on which the stadium sits. My view is that they spotted that asset and hatched a plan to buy cheaper land (they won't care where - after all they come from a culture where franchises are pretty much location independent) to build a stadium and pocket the difference between the two developments.

I think they have miscalculated on several fronts:

1. Another site will be extremely difficult to buy and develop sufficiently cheaply to fulfil the plan.

2. CPO will (rightly) be an obstacle to riding roughshod over the wellbeing of the club by renting a stadium (as Leeds United have had to), or moving the club to an unfavourable location, or worse, to another town (like Wimbledon). Not only would they not be able to use the Chelsea name (and attached extant Premier League (for now) privileges, but they would not be able to develop the land on which the football ground currently sits.

Given the unsophisticated way in which they have behaved so far it is perfectly believable that they have misread the situation completely and will be looking for a least cost exit as early as legally possible.

[RDCW]

10 hours ago, east lower said:

It genuinely wouldn't surprise me if we rent a ground - Look at the costs of construction currently, they're astronomical and the bureaucracy involved in any sort of construction project just increasing and driving up the overall cost. Cheap land such as where Everton are building their stadium is not available, raw materials are higher, cost of skilled labour is rising. They originally budgeted about £500m and it's going to actually cost close to £1b.

I would think that you could multiply that by a factor of 1.5 to 2 times that final figure for a new stadium in or around West/South-West London - Plus any costs associated with diversion of existing infrastructure - Railways, Utilities etc. 

Revenue per game IF we could fill a 55'000 seater stadium - 14'000 seats for 19 home games at an average cost of say £75 per seat =  Close to £20m per season. Additional revenues for food, drink, merchandise - £1m per game, So £21m per game + Any additional revenue hawking out the stadium to other sports and concerts etc (just like Spuds) + £10m per year optimistically. 

£2'000m /£31m per season = 64 years just to pay for the cost of the stadium. 

Now I understand the need for additional revenues to operate the business and get us back to the top table and keep us there. But why'd would you sink even more billions into us? If FFP & sustainability rules change then get us sold and let's get bankrolled, cause that's what Man City and Newcastle will do and the very moment those rules change - Which I believe that they will, don't know when but they will.

It's hard to see where they could ever make any money out of the club. However hard they sweat the assets (and I incude the fans in that) they can't expect to recover what they have invested already, let alone what it will take to acquire a 55,000 seater plus stadium and a successful football team.

[Sciatika]

I have never thought that the money they earn would come from ticket revenues. As you say, that will simply create a debt that outlives us all. I don't think they do, either. The money will be earned by leveraging the opportunities adjacent to the club's activities through global merchandising, sponsorships, advertising, image rights, media income and all sorts of other things, or at least, that is what TB talked about in a presentation about the time Clearwater was taking the club over. It would be unsurprising to me if the club pushed into becoming an athletic club or bought businesses in other areas that supplement the main activity of the business.

To a degree, this is a change in direction. Under Roman, Bruce Buck summed up the position that they would like to create a new stadium, but in some ways, that's not as important as expanding different ways to experience Chelsea FC in different markets and through different platforms. Lots of Summer tours, increased global revenue and thinking about different ways to deliver the same product. Buck used to make a joke about how some people in the future would experience the club through media on, say, their wristwatch. Actually, he was thinking very narrowly. The desire to build a new stadium is to create a focus for that experience. However, that does not deliver the biggest bang for the buck. This is why the efforts to rebuild were, at times, half-hearted.

The new owners seem to be taking a different view, though actually, I think the Stoll acquisition may be more about offices than about a new pitch in the short term. Matt Law made that point in a LIB podcast last year. It is not so much about delivering the "same product" as delivering new products that are aligned with the basic product. But that requires the flagship to be exactly that. There is ongoing pressure to rebuild the stadium to create a place in which a "top club" can play its fixtures to raise the profile of the club both within and outside its core market. That has important knock-on effects on revenue generation, but it's not through ticket sales. Interestingly, in that respect, the matchgoing fans are still massively important to the club because, as noted by the Premier League and its sponsors, having noisy match-going fans is an essential requirement for the experience. So, for instance, they will look to generate as much revenue as possible from ticket sales but that is not as important to the bottom line as the atmosphere the match-going fans generate. The owners are well aware of this. At the moment, the owners are still trying to get to grips with all these competing issues. To be fair, it's complicated.

[ROTG]

7 hours ago, RDCW said:

worse, to another town (like Wimbledon).

There is a 3/4 built stadium in Merseyside which will more than likely sold on the cheap, with the current owner wanting to get out, and the investment company buying him out having second thoughts. 

I believe sport franchises in the US often move states with changing there names.

[UglyMonkey]

1 hour ago, ROTG said:

There is a 3/4 built stadium in Merseyside which will more than likely sold on the cheap, with the current owner wanting to get out, and the investment company buying him out having second thoughts. 

I believe sport franchises in the US often move states with changing there names.

I think you’re correct. 
Welcome to Chelton or Eversea. Both play in blue. Both striving for mid table respectability. 

Mauricio Dyche or Sean Pochettino?

 

[Mark Kelly]

4 minutes ago, UglyMonkey said:

 

 Sean Pochettino?

 

As long as it's not Mauricio Pochettino I'm in.

[east lower]

2 hours ago, Sciatika said:

I have never thought that the money they earn would come from ticket revenues. As you say, that will simply create a debt that outlives us all. I don't think they do, either. The money will be earned by leveraging the opportunities adjacent to the club's activities through global merchandising, sponsorships, advertising, image rights, media income and all sorts of other things, or at least, that is what TB talked about in a presentation about the time Clearwater was taking the club over. It would be unsurprising to me if the club pushed into becoming an athletic club or bought businesses in other areas that supplement the main activity of the business.

To a degree, this is a change in direction. Under Roman, Bruce Buck summed up the position that they would like to create a new stadium, but in some ways, that's not as important as expanding different ways to experience Chelsea FC in different markets and through different platforms. Lots of Summer tours, increased global revenue and thinking about different ways to deliver the same product. Buck used to make a joke about how some people in the future would experience the club through media on, say, their wristwatch. Actually, he was thinking very narrowly. The desire to build a new stadium is to create a focus for that experience. However, that does not deliver the biggest bang for the buck. This is why the efforts to rebuild were, at times, half-hearted.

The new owners seem to be taking a different view, though actually, I think the Stoll acquisition may be more about offices than about a new pitch in the short term. Matt Law made that point in a LIB podcast last year. It is not so much about delivering the "same product" as delivering new products that are aligned with the basic product. But that requires the flagship to be exactly that. There is ongoing pressure to rebuild the stadium to create a place in which a "top club" can play its fixtures to raise the profile of the club both within and outside its core market. That has important knock-on effects on revenue generation, but it's not through ticket sales. Interestingly, in that respect, the matchgoing fans are still massively important to the club because, as noted by the Premier League and its sponsors, having noisy match-going fans is an essential requirement for the experience. So, for instance, they will look to generate as much revenue as possible from ticket sales but that is not as important to the bottom line as the atmosphere the match-going fans generate. The owners are well aware of this. At the moment, the owners are still trying to get to grips with all these competing issues. To be fair, it's complicated.

I don’t pretend to understand the intricacies of the way they may think and they are supposedly the experts in making money.

But from my very simplified way of thinking, who’s currently or has been making the sort of money from PL football that will give these people a return in the investment? 

They may be the smartest person in the room, but the investors could put their money in safe places and make 5%. 

I cannot see past a sale as being the only option as a means as ROI.

We see this all the time in the business world, investors come in acquiring a business - want to “double turnover” and restructure/re-focus and then sell it on within 5 years. They don’t say it but just do it.

And in my experience, even the smartest investors don’t always do their due diligence properly and get themselves in a place they didn’t think they’d be (worse).

[Blue Moon]

28 minutes ago, UglyMonkey said:

I think you’re correct. 
Welcome to Chelton or Eversea. Both play in blue. Both striving for mid table respectability. 

Mauricio Dyche or Sean Pochettino?

 

Provided we don’t go “all blue” and hire Pep Pocket-Dice

[RDCW]

1 hour ago, ROTG said:

There is a 3/4 built stadium in Merseyside which will more than likely sold on the cheap, with the current owner wanting to get out, and the investment company buying him out having second thoughts. 

I believe sport franchises in the US often move states with changing there names.

CPO owns the rights to the CFC name, so the club can't be transplanted anywhere else. It would cease to be Chelsea FC and would therefore cease to exist.

[east lower]

26 minutes ago, RDCW said:

CPO owns the rights to the CFC name, so the club can't be transplanted anywhere else. It would cease to be Chelsea FC and would therefore cease to exist.

They already own a wonderful 140+ acre site in Surrey.

We could be the Stoke D'Abernon Stockbrokers - Go Brokers!

Edited April 11 by east lower
More appropriate tag