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Barely a couple of months into 2022 and the world has seen a defining moment in history when Russia attacked Ukraine through the Donbass region and began an invasion. The world was aghast and reacted almost immediately by pressing all the sanctions against Russia into action.
Effect of these sanctions percolated down to the sporting world when FIFA, UEFA, Schalke 04 announced withdrawal of sponsorships from Russian brands most notably Gazprom. European Union started putting sanctions on the Russian oligarchs operating in the European space and this placed two key individuals under the spotlight, Alisher Usmanov who holds ties with Everton FC (he has been placed under sanctions) and Roman Abramovich who owns Chelsea FC and is facing the heat considerably.
Roman Abramovich tried to safeguard his interests in Chelsea by handing over the decision-making powers to the Trustees at Chelsea Foundation and launching a series of PR but heat intensified and eventually on the 2nd of March, Roman formally announced his intention of selling Chelsea FC amidst all the prior speculations.
The above-mentioned incidences can be bracketed under the external factors which definitely influence a brand value but there are three more intrinsic factors which can contribute massively into making a global brand.
• Sporting success
• Fan base
• Commercial strength and opportunities
For any investor, these would really determine the value of Chelsea FC.
Since Abramovich bought Chelsea FC in 2003-04, a total of 21 trophies has been won with the latest being winning the Club World Cup on 12th Feb 2022 by beating the Brazilian side, Palmeiras.
Three trophies, the biggest of them being Champions League title, out of the total haul came under the stewardship of Thomas Tuchel since he became the manager in Jan 2021. The current squad under him has a total market value of £794.7m and has the third highest value in the Premier League as per Transfermarkt. The value, although grown substantially from 2018, is around the under £800m mark.
Chelsea’s three players with the highest market value.
The squad has shown glimpses of brilliance this season albeit inconsistency has affected them and this would certainly be a difficult time for them especially when the Champions League round of 16 is underway apart from the regular Premier League season.
It’s important to note that six of the first team players are from the Chelsea academy, considered to be one of the strongest in European football. First under Frank Lampard and then under Tuchel, academy graduates have been consistently debuted and continued to perform making the world notice.
The top academy players playing important roles either with Chelsea first team or other clubs.
The Cobham Training Centre, which has facilities of 57 hectares and includes 30 training fields, gyms and pools, with it is a very important factor in the development of Brand Chelsea.
A big brand has the audience at the center of it and in that aspect, Chelsea FC has one of the most evolved and engaged supporters base be it in the digital space, at the ground or through supporter’s clubs spread across the world.
Social Media: Chelsea FC has the sixth highest followers amongst the Big 5 leagues with a total of 110.46m followers and the second highest following in the Premier League.
It could be their content strategy or creative focus but their posts see a high level of engagement and retention. In any manner, fans do play a part in this.
The 5th Stand App: The Chelsea FC official app launched in 2018 has achieved 10 million downloads, with over 100 million visits and 362 million page views in the 2020-21 season. According to a fan survey, 92% of users strongly agreed with the statement, ‘as a Chelsea fan, you have to have The 5th Stand app’.
Structured supporters clubs are always essential for a football club to reach out to the corners & build a global brand and all credit to Chelsea FC for focusing on this aspect and managing to create and supervise over 500 supporters clubs across 100 countries with each club having a minimum membership of 20. India alone has around 80 plus clubs.
From a commercial perspective, it can be said that Chelsea FC is definitely not in the best of health, although there are several factors contributing to it. The key indicators as of 2020/21 can be.
Chelsea has a unique ownership structure wherein the club’s debt has been converted to debt in a holding company, Fordstam Limited which means they are essentially debt-free, and with Abramovich remarkably enough writing this off as he sells Chelsea, they are in a unique position to start afresh. However, in the coming future, the new owners might not be anything like Abramovich and Chelsea would have to operate more shrewdly on the transfer market. The good thing is they already have a brilliant workforce under Marina Granovskaia and Petr Cech.
This can also lead to an unfinished project being undertaken, the reconstruction / expansion of Stamford Bridge, the stadium. Chelsea FC has a relatively smaller stadium compared to that of their closest rivals with a capacity of 42,000 and frozen season ticket prices since 2011/12 leads to a substantially lower matchday revenues. They had permission to rebuild and expand their home in 2017, but the project was scrapped because of an unfavourable investment climate.
Since the Abramovich takeover, Chelsea's commercial income increased by a whopping 300% by the 2020/21 season. A strategic globalization outlook and smart marketing have to a strong array of brands partnering with them These efforts resulted in EUR 69m p/a kit supplier deal with Nike and a EUR 46m p/a shirt sponsorship with telecommunications company Three, both amongst the most lucrative deals in their categories.
The Other Ventures
Women’s team: Abramovich has also put in due focus on the women’s team. It has been a part of the club since the second year of Abramovich’s ownership and it has grown in all aspects. Chelsea Women’s team has been champions fro two consecutive years, 2019-20 & 2020-, broke the longest unbeaten streak in WSL history (32 games), and won a Continental Cup for the second consecutive season.
Chelsea Digital ventures: A consumer focused business set up in 2018 and spun out of the football club. They have been tasked with leveraging the club’s know-how and intellectual property to create products that appeal to the larger mass beyond the team’s fanbase. The offerings include.
Blue Fuel - A hydration brand developed by club’s nutritionists, offers not just drinks but also protein bars, energy gummies and accompanying app. It’s regularly used by Chelsea’s men’s women’s first team as part of their daily regimen
C-Score: measuring general health.
Perfect Play: Offering personalized coaching tips.
Chelsea Foundation: The Chelsea FC Foundation uses the power of football to provide sport, health, education and environmental initiatives throughout our communities. During the pandemic, Chelsea continued to pay all employees as if matches were being played, offering hotel accommodations and meals to National Health Service staff, and running a campaign to raise awareness and funds for the domestic violence charity Refuge.
It’s not every day that we witness a fire sale of a big brand. Nobody really thought this would happen at Chelsea yet strangely it’s happening. Some reports say a decision could be reached in the next few days. It would be interesting to see the fate of the “Roman” empire built so lovingly by the man himself.
Start Date: October 18, 2022 | Duration : 8 Months
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