Where others saw a dilapidated, downbeat, debt-ridden baseball franchise, Todd Boehly spotted a shrewd investment opportunity.
Boehly, the 48-year-old new co-owner and chairman of Chelsea, has amassed his fortune with an almost prescient ability to analyse a business’ whole potential and identify undervalued areas. In Major League Baseball, for example, teams negotiate their own local broadcast deals and when Boehly looked into the Los Angeles Dodgers he was certain their TV rights contract, up for renewal the following year, was chronically underpriced in America’s second-biggest media market.
He delved further and discovered a playing squad low on morale that, if only they could be reinvigorated by some fresh air, could rouse one of the league’s largest fanbases and regularly fill one of the league’s largest stadiums.
It didn’t matter to Boehly and his group of investors that the $2.15bn they eventually paid for the Dodgers in 2012 eclipsed the previous record price for a sports team, set when the Glazer Family purchased Manchester United for $1.47bn in 2005.
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Everything in Boehly’s world is carefully calculated. Where others see people and buildings, he sees numbers and statistics, probabilities and possibilities. In multiple industries he has made money – billions of it – by making careful, clever bets. Now, alongside investors Clearlake Capital, he is confident he can apply his formulas to Premier League football.
He is part of the new breed of club owners who see certainty in games that, on the surface, should be filled with chance and luck, the antithesis of a bygone era when sport was measured in blood, sweat and tears – when crunching tackles were multiplied by bruising centre forwards to equal winning matches.
Yet as Chelsea kick off the new season against Everton late on Saturday afternoon, all is not adding up. Losing Marina Granovskaia, the director in charge of recruitment, and Petr Cech, a key advisor, during the summer left a big hole in the day-to-day operation of the club. Boehly installed himself as interim sporting director, which raised some eyebrows, and manager Thomas Tuchel had to become more involved in transfers, which is not his preference.
What started well — securing Raheem Sterling for £47.5million and Kalidou Koulibaly for £33m — has descended into a frantic dash to deliver more players capable of bridging the gap to Manchester City and Liverpool, at a time when Arsenal and Tottenham have strengthened and Manchester United can never be discounted.
In his hugely successful finance life, Boehly’s approach is to make small investments to get to know an industry – minimising exposure – then increasing it when he feels comfortable. He calls it “feeding the stars”. “Investing is really just about finding probabilities that have better risk-reward profiles than average,” he said.
At Chelsea, Boehly identifies growth in a stadium smaller than comparative rivals and a team that, despite the 2021 Champions League win, has fallen behind Liverpool and Manchester City domestically and has not won the Premier League in half a decade.
Sterling was a perfect Boehly signing. The fee represented value for money, his age (27), the desire to join, the data that showed why his occasionally lower goal return was offset by everything else he offers: his frequent sprints over 18mph, his repetitive high intensity, the amount of times he is involved when others score. He was top of Tuchel’s list and Boehly got it done.
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In the final week of preseason it left them chasing Wesley Fofana, Marc Cucurella and Frenkie De Jong to add to the £20m signing of Aston Villa 18-year-old Carney Chukwuemeka and a squad that Tuchel is not yet convinced can challenge for the title. It might be a hairier introduction to English football than Boehly envisaged.
Boehly refers to sports teams as “human capital business” and sees a squad of players as nothing more than another portfolio: of investments and hedges, of risks and certainties, all measured and weighed with the intention of creating a whole that can win and, ultimately, create more capital than invested.
With a group of players it “comes down to is your portfolio deep enough to deliver on the various things that might get presented to you,” Boehly told the Leadership & Business Podcast in 2019. “So to us [a squad of players is] another kind of portfolio business.”
While the Roman Abramovich era of mega expenditure bought rich success, it is hard to say transfers haven’t been mismanaged. Even right up to the end, when nearly £100m was spent on a striker that didn’t particularly fit the manager’s ethos and style.
And look at the players they’ve let slip through their fingers. At a time when they need a centre-back, having lost Antonio Rudiger and Andreas Christensen on free transfers, the wisdom of allowing Fikayo Tomori to join AC Milan, where he won the Serie A title last season, is questionable. They want a striker, but had Tammy Abraham, another homegrown talent, on their books until they let him join Roma last summer, where he scored 29 goals.
Glance back even further and the previous regime didn’t consider younger versions of Mohamed Salah and Kevin De Bruyne good enough for the team – two players arguably now the best in England’s top two clubs. And football finance expert Kieran Maguire points out that the £175m and £115m spent on signings and wages respectively in the first season of the Abramovich era would be the equivalent of £567m and £375m in today’s football money.
Having loaned out Lukaku to Inter Milan and accepted that Kepa Arrizabalaga, Hakim Ziyech and Timo Werner should move on, that’s quarter of a billion pounds of talent that didn’t cut it.
If recruitment is overhauled and finessed, Boehly knows Chelsea can be a far trimmer and leaner side, and possibly stronger for it. To that end, he wants Michael Edwards, seen as a world-leading transfer specialist after five years as Liverpool’s sporting director, but all this will take time, and is far from certain. Edwards is a Boehly kind of guy: able to look beyond the noise and emotion to eke out value in numbers and data.
“Our goal is to win,” reads a passage detailing the values of Eldridge, the private investment firm co-founded and run by Boehly, on its website. “We believe winning together is better than winning alone. Sometimes we lose. When we do, we dust ourselves off and learn. We persevere. We strive to be better. We evolve.”
Chelsea are persevering and striving and evolving, but will it be quick enough to make them winners immediately?
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