Two souls of big money
Todd Boehly’s consortium and the deal to buy Chelsea FC for £4.25 billion reveals the menace threatening the beautiful game, argues Paul Demarty
After a very nervy couple of months, the sale of Chelsea football club seems to have been agreed.
For close to 20 years one of the country’s - indeed the world’s - very richest clubs for a moment looked in danger of becoming one of the less predictable casualties of the war in Ukraine. Its current owner, Roman Abramovich, found himself on a list of sanctioned individuals and his assets were frozen. Chelsea were, for a time, forbidden from selling tickets to their games and even from paying for the team’s transport to away fixtures. Only a special set of contortions on the part of the government brought things back to some sense of normality.
There still, nevertheless, loomed the matter of finding a sale before the government’s ‘special measures’ conclude at the end of this month. If a buyer could not be found, there was a real danger that the club might be liquidated entirely - something like the fate that befell Bury FC recently, albeit writ very large indeed! Rumours abounded last week that the deal had hit a snag: Abramovich was alleged to have withdrawn an assurance that a £1.6 billion loan would not need to be repaid by new owners. His people have since denied any such move, and the way is open for the club to be sold for £4.24bn to a consortium of American interests, led by a certain Todd Boehly.
We have argued before in these pages that there are two different kinds of big-money football proprietors: essentially individuals with vast fortunes, for whom the club becomes something of a plaything; and relatively ‘conventional’ investors, for whom it is expected to produce a reasonable profit. Assuming the sale is agreed, Chelsea will become the first club in England to move from the first column into the second.
It was also a trailblazer for the more ‘oligarchic’, quasi-feudal model of ownership too. Nobody before Abramovich had put money into the English game on that scale. It is worth thinking a little about his own background, and that of English football, in the years leading up to his 2003 acquisition of Chelsea.
Abramovich was, by background, fairly typical of the post-Soviet oligarchy in Russia. He had been a well-connected state official, and had turned that influence into a powerful position on the late Soviet black market. When the USSR finally dissolved, he was in an ideal position to profit. He struck up a friendship with another business oligarch, Boris Berezovsky, and the two of them conspired with various corrupt officials and mafiosi to obtain enormously valuable state industries at fire-sale prices. Abramovich was notable at this time for his non-notability - he did a good job of keeping out of the spotlight. When Vladimir Putin rose to power and reined in the oligarchs politically, he submitted without objections, and in return got to keep the incredible fortune stolen from the Russian people. (Berezovsky did not, and lived out the rest of his years in exile in London, before dying in suspicious circumstances.)
Abramovich’s purchase of Chelsea raised his public profile considerably. In some respects, it raised the profile of his class too. The Russian men of his generation who acquired such vast wealth are no longer properly called oligarchs, since the Putin regime has politically expropriated them. Their money talks very loudly in this country, however, which has long placed itself at the service of anyone with a bank balance likely to generate its fair share of billable hours among the magic-circle law firms and investment banks of the City. Abramovich and friends do not so much export capital as exfiltrate wealth. His purchase of Chelsea was the only great achievement of the post-Soviet kleptocrats of 1991 with any real ‘soft power’ attached to it in the west.
In retrospect, we can think of Abramovich’s acquisition as the end of a transitional period in English football, which had begun with the creation of the Premier League 10 years earlier. The top 20 clubs thereby unilaterally declared independence from the pre-existing football pyramid, and in doing so secured a vastly larger share of the revenue associated with televised matches for themselves. At the same time, the pay-TV era began in earnest, massively increasing the size of those revenues in absolute terms.
Initially, however, the game itself did not change very much. The clubs had to sell the product they had, and that product was essentially the same rough and ready sport that had existed in the 1980s. It was not until the mid-1990s that overseas stars started arriving on hitherto unimaginable transfer fees and wage packets. The decade, meanwhile, steadily produced the largest global footballing brand in history, in the form of Manchester United, whose astonishing and near-imperturbable success under manager Alex Ferguson brought with it fabulous wealth for the club’s owners.
By the early 2000s, then, the big-money era was in full swing. That held its attraction for two classes of potential buyers. The first we have discussed already: it gave the Abramoviches and Gulf autocrats of the world a mode of expenditure even more extravagant than a super-yacht or a fleet of Italian supercars. Unlike the yachts, meanwhile, thousands or even millions would actually thank you for buying the club, provided you gave them success on the field. Abramovich was equal to the task, and so was Sheikh Mansour of Abu Dhabi up at Manchester City. (Whether the Saudis can repeat the trick on Tyneside remains to be determined.)
The second kind of owner was a more straightforward sort of capitalist. Let us call them investor-owners, since the most characteristic feature of an investor is that he or she wants a return on that investment. A level-headed capitalist can look at the Manchester United of the early 2000s, with its millions of fans all over the world, and think of all the money to be made by stamping the club crest on every imaginable kind of product. And, indeed, this is more or less what happened to Man U in the end. The Glazer family took it over; they have spent a lot of money on star footballers, to be sure, but have notoriously gotten little in the way of competitive success in return. They have tended to pick up players at moments when their fame is at its height - Paul Pogba, for example, after strong performances for France - which does not necessarily make for a strong team, but certainly does make for strong official strip sales.
United are something of a basket case, but a similar ‘corporate’ ownership structure might work out better in practice. John Henry and Fenway Sports Group, the owners of Liverpool, are certainly of the ‘investor’ type, but have succeeded in reviving a rather stagnant club, which spent the 90s and 2000s coasting on its past glories, rather as United is doing now. The same might be said of Red Bull, which has worked around German football’s ownership regulations to turn Leipzig into a success out of almost nothing, to the horror of everyone else.
The question as to which type of owner is likely to thrive dogs the game. We compared Abramovich unflatteringly to the owners of Bury earlier, but there really is a sense in which these unimaginably wealthy individuals more resemble the sentimental local businessmen who run clubs as a labour of love further down the pyramid, and did so all the more in the past. (Likewise, there are monstrously parasitic mini-Glazers to be found - the vile Oyston clan who nearly destroyed Blackpool FC springs to mind.)
At the elite level, the amount of money involved tends to spook people. Thus there are initiatives like ‘financial fair play’ that more or less force clubs to run at a profit. These tend to favour the ‘investor’ owners (and also the clubs with more storied history, and thus a better starting position in terms of revenue). Enforcing the rules has proven difficult, however, when it comes to the oligarchs and sheikhs. The ‘investor’-owned clubs, meanwhile, were notably more enthusiastic for the botched European Super League than the ‘oligarchs’; between the post-pandemic relaxation of Covid restrictions and the failure of the ESL, the balance has perhaps shifted back towards the latter, regardless of Abramovich’s rude ejection from their number.
Meanwhile, Chelsea fans wait to see whether they have caught themselves a Malcolm Glazer or a John Henry. Boehly has a stake in the Los Angeles Dodgers baseball team, who at a glance seem to be doing well; perhaps Chelsea supporters will take heart from that. The truth, however - and this holds both for the ‘oligarchs’ and ‘investors’ - is that the fans are wholly incidental to the whole thing. English football is unusually fan-hostile in its structure, of course; and this is merely a reflection of our role in the world economy as an offshore centre and money laundry. The rapturous welcome for Newcastle United’s new owners was thought a little distasteful in polite society - Chelsea fans’ chants in solidarity with Abramovich after he was sanctioned rather more so. But really what else is to be expected? Fans have no power; with no power comes no responsibility, surely. The options are merely to thank the owner for ‘rain and sunshine from above’, or rebuke him for draining the club dry in a wholly ineffectual show of resentment.
The government, in the wake of the ESL fiasco and the aforementioned problems further down the pyramid, was stirred into action (by some definition of ‘action’). It appointed Tracey Crouch - a Conservative MP who is at least some kind of enthusiast for the sport - to investigate changes to the structure of the game, and she and her flunkies produced a lengthy report a few months ago. By the standards of Tory governments, her proposals are radical, but that is a low bar, even compared with the existing governance regimes in countries like Spain and Germany. She proposes a kind of stamp duty on transfers in the top flight, to be distributed to lesser teams and the game’s grassroots. She proposes a ‘golden share’ scheme, whereby supporters’ representatives will have a veto on certain decisions (an obvious example being the sale of football grounds or their use as collateral in dubious financing arrangements, which has been a real problem in the lower leagues). She proposes more “consultation” with supporters, represented by a ‘shadow board’ of some sort, and more support for the women’s game, which has gained in prominence somewhat in recent years.
All of this is, of course, hopelessly inadequate to the task actually before partisans of the game: the euthanasia of the big-money owners, and football’s placement in the control of fans. These proposals, moreover, are merely the opening offer in what is likely to be a protracted negotiation process. How large will this ‘stamp duty’ be, once it has been torn to shreds by the lawyers of the big clubs?
Many concrete versions of governance in the sport might be proposed by way of an alternative - perhaps a kind of cooperative model, or something else. So far as society at large is in the grip of capital, however, we will get the clubs we deserve. You can view football, if that is your preference, through a capitalistic lens, as a special form of competition between rival firms; but that is in the end to justify the course of the game as it has actually played out in the era of its financialisation: a concentration of capital among an ever smaller elite of clubs, to the detriment of the grassroots and even of national teams, which are all but openly viewed as a nuisance by club administrators: merely an occasion for injuries for star players and a shop window for their agents to procure a better deal.
The reality of football, and other competitive sports of its type, is a dialectic of competition and cooperation: the ‘product’, after all, is the game, the spectacle of match day and the culture built by fans to keep their blood flowing from one weekend to the next. From this point of view, the dominance of money - whether in the form of oligarchic largesse or high-finance parasitism - is the greatest menace to football’s fulfilment.