Chelsea’s sale of their women’s team to themselves – what does it mean?

What is happening with Chelsea’s women’s team’s ownership?

Chelsea’s sale to parent company BlueCo for £198.7 million in April helped boost the company’s profit.

Then it was revealed last week that Alexis Ohanian, a Reddit founder and author who has a history of supporting women’s sports, had purchased an 8-10% stake for £20 million.

The agreement appears to be a clever move to navigate the rules governing profit and sustainability, as well as a huge improvement for Chelsea’s already impressive and dominant team.

What’s the background, then? Has the sale identified a need to close a loophole? What does it mean for Chelsea’s men’s transfer funds? And how might this ground-breaking investment help Chelsea women advance?

The new owners have been known to profit from Premier League rules since consortium BlueCo’s £4.25 billion purchase of Chelsea in 2022.

First, long-term contracts: In the five years to 2024, Chelsea spent almost $1.7 billion on transfers. After dividing those fees among six, seven, and eight-year deals, they were given the right to continue spending. Amortization is a term for the tactic.

Transfer fees could only be spread across a player’s initial contract for a maximum of five years, according to Uefa’s reacted in 2023 by changing its regulations. Later that year, the Premier League followed suit.

Chelsea has also benefited from PSR by selling local players for “pure profit.” In 2023, Chelsea sold Conor Gallagher for £33 million to Atletico Madrid and Mason Mount for £52.5 million to Manchester United for £33 million.

Enzo Maresca, the head coach of Chelsea, demanded that the Premier League change its financial guidelines last summer when he was questioned about the sale of Gallagher.

In order to maintain its PSR compliance, Chelsea’s financial accounts from April 2024 revealed that the club had sold two hotels to another sister company.

According to the associated-party transaction rules, the Premier League ratified the sales in accordance with what is known as a “fair market valuation.”

The club made a pre-tax profit of £128.4 million, and it also successfully sold the women’s team and other subsidiaries to themselves for around £198.7 million.

Will this flaw be fixed? The Premier League made a June 2024 attempt that failed to receive enough votes.

Both Uefa and the English Football League (EFL) have said they will not allow it to be sold, along with selling training facilities and other assets.

Under the leadership of Chelsea’s domestic rivals, head coach Sonia Bompastor, who replaced Emma Hayes over the summer, has reached a new height this year.

An unbeaten domestic campaign and a second treble in four years were completed with the FA Cup victory over Manchester United at Wembley. Six consecutive Women’s Super League titles have been won by them.

As he watched Sunday’s victory alongside his wife Serena Williams, Ohanian called Chelsea the “queens of global soccer” who would “billion-dollar franchise.”

Bompastor praised Ohanian’s investment, saying it represented “values” and demonstrated respect for Chelsea’s accomplishments and the women’s game.

Prior to joining American club Angel City FC in 2024 for £192.3 million, the 42-year-old had previously been the largest shareholder in the women’s soccer team. Prior to this deal, the 42-year-old had previously invested in women’s football.

Chelsea made it known that they had ambitious future goals and that they wanted to find a private investor for the women’s team in the summer.

By breaking records in the women’s transfer market and hiring one of Europe’s top coaches in Bompastor, they kept their word despite the fact that the men’s team will benefit from it.

Naomi Girma, a female football player from the USA, made a world-record move to Chelsea in January. The fee is believed to be in the region of £900, 000 ($1.1m).

The money will be significant for English and European women’s football. The United States has largely played a role in selling minority stakes in a club.

Angel City recently attracted investments from Natalie Portman, America Ferrera, Mia Hamm, Sophia Bush, Abby Wambach, and Eva Longoria.

With WSL Football, the company overseeing the nation’s top two tiers, continuing to advance the game’s professionalism, there is a sense of growth in England.

WSL Football’s top priorities include expanding marketing opportunities, securing better sponsorship deals, and developing a financially viable brand.

Before assuming the leadership of London City Lionesses and advancing them to the WSL this season, they have backed US billionaire Michele Kang’s influence. Kang was in charge of the organization’s ownership of French giants Lyon.

The WSL champions’ worth is believed to have been evaluated against Angel City’s valuation. Chelsea’s women’s team made a loss in their most recent accounts, despite The National Women’s Soccer League club’s £30 million-a-year profit.

Football finance expert Kieran Maguire remarked, “I believe it cannot be justified using a conventional valuation metric.

Despite facing crisis and defeating Manchester United seven times, they were sold for “twice their revenue,” making them the biggest football brand.

The growth potential is unknown, according to the women from China who sold for 18 times their income.

Dr. Christina Philippou, a woman’s football finance expert, believes that the new ownership structure at Chelsea demonstrates the “unreal potential” of women’s football, despite questions about how it will work.

Dr. Philippou remarked, “It is a high valuation for a lack of control.” Given who the investor is and what Angel City and the celebrity tie-in have done in women’s sport. What kind of shareholding is to be questioned?

It serves as a gauge of the direction the market is headed. There is a lot of untapped potential, according to buyers.

Although Dr. Philippou believes some WSL clubs will have raised questions about west London developments, similar investment in the women’s game has both benefits and drawbacks, he cautioned against it.

She continued, “Women at Arsenal make more money than women at Chelsea.” Last year £11m Chelsea, Arsenal £15m.

“You would be looking at that (£200 million) valuation if you were Arsenal,” said the statement. They are more organized and on time.

“My antenna would be up and looking into that possibility if I were Arsenal.” A positive outcome for large investors is showing interest. Others will be willing to make investments and form partnerships.

There are those who are willing to invest in their women’s teams, but there are those who are not.