Necessity is the mother of innovation. Unfortunately for Chelsea’s new owners, the club has not had that necessity under Abramovich. The new ownership consortium will need to bring (or hire) some serious firepower to help the club unlock new means of revenue generation
Despite their strong on-pitch performance, Chelsea has not been a top-three revenue-producing club in England since 2014. Their capacity for revenue generation is low relative to their spending habits, making any transition to a financial sustainable model even more difficult.
Coming off a Champions League triumph last season, Chelsea’s actual broadcast revenue distributions are about as high as their expected share of broadcast revenue could ever be. The club has earned more money from European Competition over the last decade than any other English club except for Manchester City.
While other clubs may look to stronger on-field performance as a means to boost broadcast revenues, Chelsea have little room for growth in this area. The club will need to maintain their recent high standard of sporting performance otherwise they face a risk of these revenues declining (see: AS Roma and Manchester United). Without an expectation in future seasons for Chelsea to perform better domestically than currently, and with the club’s steady-state chance of UCL qualification at 64%, Boehly and his group will need to rely on future media rights value growth to grow their broadcast revenues.
Another core driver for low revenue generation has been that since 2014, Chelsea has witnessed some of the lowest commercial revenue growth of the “Big Six”. The last eight years have seen the club nearly tie Manchester United for the smallest absolute growth in commercial revenues, who began with a 73% higher base and have been a weaker team.
Lastly, having not redeveloped Stamford Bridge, the club has stagnated in their matchday revenues this decade (ignoring the pandemic) while other clubs have been growing their revenues and building for the future. While matchday revenue makes up a minority of the club’s income, it can prove to be important at the margins especially during times of poorer sports performance (again, see: Manchester United). Boehly’s group will feel these constraints exacerbated for years to come while several of their London neighbours (Tottenham, Brentford, Fulham, Crystal Palace) begin to realise the full benefits of their stadium improvements.