Can Chelsea really hope to get to £1billion in revenue?

Even by the standards already set by the Todd Boehly-Clearlake consortium, this was another extraordinary statement of intent.

At a Bloomberg Invest event last week, Clearlake's Jose E Feliciano spoke about the ambition to more than double Chelsea's revenue — the total amount of money generated — and take it to the remarkable landmark of £1billion.

“We think we have an incredible opportunity to double revenue,” Feliciano said. “We think we have one of the best media properties and sport properties in the world where we can get to a £1billion of revenue.”

To put that target into perspective, only Barcelona have broken the $1billion (£894m) barrier in world football and that was before COVID-19 began having a significant and ongoing impact on the La Liga club's finances.

In Chelsea's last financial results — for the year ending June 2021, when Roman Abramovich was still the owner — they reported an increase of revenue of seven per cent to £435million. That's a healthy sum but this is a sizeable jump being talked about here, particularly for a club so reliant on the Russian tycoon's financial backing until recently.

It should be highlighted Feliciano was talking about a target for the future and that he doesn't expect this to happen straight away.

“Ultimately what we’re trying to build is a long-term, sustainable business that can increase in value significantly and that means a lot more than winning or losing on the pitch,” he added. “That’s important as a brand, as a media property, as a team, as a club, but we’re also trying to establish and build and put in place the right building blocks to have a great business in three years, five years, seven years, and a lot of work we are doing behind the scenes is trying to do just that.”

Chelsea became one of the biggest clubs in the global game under Abramovich, establishing themselves consistently in the top 10 of the Football Money League rankings compiled by Deloitte on an annual basis. But is such a giant leap in income possible?

The Athletic’s Chelsea writer Simon Johnson spoke to football finance expert Kieran Maguire to find out…

Johnson: Is £1billion in revenue achievable?

Maguire: You have to look at the three traditional forms of revenue: matchday tickets, broadcast and commercial.

Matchday tickets can only increase if they move stadium or increase the size of Stamford Bridge. That’s going to be very expensive. If you go up to, say, 50,000 capacity at the current site (from the present 42,000) it’s not going to make a massive difference, maybe get an extra £20million a year. That’s not the gap they’re looking for.

The broadcast deals that we have at present are determined by the Premier League and UEFA (for European club competitions). They both have natural ceilings. (The Premier League’s latest domestic TV deal, from 2022 to 2025, was a continuation of the £5billion paid by Sky Sports, BT Sport and Amazon to televise 200 games a season between 2019 and 2022).

As far as the commercial side of things, Chelsea are in a very competitive industry in terms of front-of-shirt sponsorship. There is nothing Chelsea have that Real Madrid, Barcelona, Manchester United and Bayern Munich don’t have.

So what could they do instead?

They have to start thinking out of the box, and this is where the consortium are starting to make their mark.

We have already seen Todd Boehly’s comments about a Premier League All-Star game — north v south. Is it a case of matches going abroad, like we see in the NFL and (basketball’s) NBA?

Are they pinning their hopes on the metaverse, if they can persuade people to pay for a pay-per-view match via a headset? Could you beam matches live from Stamford Bridge to Boston, New York, Nairobi, Beijing, Bangkok and so on in a 20,000-seater stadium where you have the technology? It is effectively like watching it on TV, but with 3D avatars live, like the stage show ABBA Voyage (a virtual concert in which digital versions of the 1970s group perform on stage).

I think Chelsea’s consortium is very tech-focused and they know Chelsea have a global fanbase and that this fanbase can’t get to Stamford Bridge easily, plus there aren’t many tickets available anyway. Perhaps they’re thinking, ‘Can we (instead) get a form of Stamford Bridge to the fanbase?’.

Unlike the NFL and NBA, football has a (major) global audience who are prepared to pay. If you charge, say, £40 to £50 and getting are 500,000 people around the world watching games this way, then you get to the kind of numbers they are talking about.

What else might help? 

Chelsea have been the most successful club over the last six or seven years when it comes to trading and generating revenue from player sales. That is certainly something they can look at but player sales is not something normally included in the revenue figures that we quote. They’re treated separately.

Matchday revenue will be something they’re keen to look at. The problem is they have already had that beauty parade with the Chelsea fanbase.

In an ideal world, they would probably like to cut the number of season-ticket holders down to around 5,000 and make the rest of the tickets on general sale, with a tier system in place for certain games: if they’re playing Liverpool or Manchester City, it’s a different price compared to Bournemouth and Nottingham Forest. In order to do that, you have to get rid of 20,000 season-ticket holders. Good luck doing that!

When you look to charge more, you risk upsetting the fanbase — and the prices are already high. The different bidding groups for Chelsea all made promises to Chelsea Pitch Owners (CPO owns the freehold to the stadium) and so on.

How important is on-field success, particularly qualifying for Europe every year?

It’s vital. For example, for every £1 you get playing in the Europa League, it’s about £4.50 for the Champions League.

The good news from Chelsea’s point of view is that with UEFA giving more places from 2024-25, there is a strong likelihood there will be five English clubs qualifying — plus another if someone outside the (Premier League) top five wins the Europa League.

What about selling naming rights to Stamford Bridge?

Tottenham Hotspur are looking for £20million to £25million a season (and have held talks with Google) but that’s for a stadium which doesn’t have a famous name associated with it. If Chelsea stay at Stamford Bridge, people will still refer to it as Stamford Bridge.

It won’t have as much value to investors as, say, the Emirates Stadium or Etihad Stadium. It’s actually difficult getting a good price for an old ground. Investors buy into it a lot more when it’s a new ground.

Could Chelsea look to increase their sponsorship deals?

Manchester United are the gold-standard here. On top of the usual things to sponsor, like the shirt, you have the official coffee partner, an official global pillow and mattress partner.

If those are worth £1million a year, you’re doing well. You would have to seal a huge number of those to get to £1billion but, of course, every time you do that, you’re diluting the brand and the appeal. If Chelsea have 400 partners, nobody knows who anybody is. You have to be careful that you don’t oversell.

One idea could be to have deals with individual players, but once you go to the lower echelons of the squad there isn’t going to be much value there.

Manchester United make £15million a year from pre-season tours, so that might be another avenue.

Is there any wriggle room for Chelsea with TV rights?

The big clubs would love to take their rights away from the Premier League and sell them directly to the fans. That could be very beneficial for a club like Chelsea. But in order to get that through, you’re going to have to get 14 votes at the Premier League shareholders’ meeting (at which each of the competition’s 20 clubs in any given season gets one vote each). Good luck with that.

Previously, the threat of the European Super League has helped to extract more and more concessions from the smaller clubs. Now the Super League is effectively off-limits, how do you go about persuading other clubs to effectively give up their rights?

What about Chelsea’s women’s team?

Chelsea have one of the best women’s sides, but they’re probably turning over £3million to £4million a year. So how do you get that to £100million? You’re not going to do that quickly.

They play at (non-League ground) Kingsmeadow Stadium and it is a great product but they’re fighting for broadcasting space, social media space and media comment. They get OK crowds, but you can get a season ticket for a small amount (adult prices are £44 and £49). Most people are used to watching a (women’s) match for up to £10. Persuading them to pay £30 will be very, very difficult. If they raise prices and the other clubs don’t, you have a problem.

Turning up to see Chelsea win (in the WSL) every week also becomes boring very quickly. You can’t have interest unless you have competition, while new fans may go elsewhere if it is cheaper.

sCan shirt sales make a difference?

This is one of the biggest myths in the industry! Manchester United generated less money in shirt sales this year than the previous one, despite Cristiano Ronaldo arriving (last summer). If you think about it, if everyone buys a Ronaldo shirt, they’re not buying the shirts of other players. So the custom just moves, it doesn’t improve per se.

So what are your final thoughts on the matter?

Can Chelsea increase revenues? Certainly. Can they hit that magic billion? They must have something lined up.

Traditionally, it’s not going to work. But football as we know it could be a lot different in five years’ time, particularly in the way it is consumed. They are coming up with a lot of ideas, so it is going to be interesting to see how they go about it.