Chelsea are reportedly looking to cut players’ wage bill by around £80million ($100m) to fund renovations to Stamford Bridge.
According to the Financial Times, the Blues have also forged a partnership with US alternative asset management firm Ares Management which will inject around £404m ($500m) into the club. Since Todd Boehly took over Chelsea they have spent almost £1 billion on player transfers with the wage bill also increasing steadily with new signings.
Hence there will be concerted efforts to cut down on the wage bill, which is currently at least £150m, by either selling or loaning out players in the upcoming transfer window.
“I think what we are trying to do is reduce the salary and essentially the opex [operating expenses] of the business by over $100m (£80.6m) per year,” said Clearlake’s co-founder Jose Feliciano at the IPEM private equity conference in Paris.
The club’s owners are seeking funds for the costly renovations of Stamford Bridge and their continued desire to acquire stakes in additional clubs has forced them to adopt this approach.
An insider with knowledge of Ares’ investment characterized it as a ‘preferred equity deal’ with former Chelsea director Mike Forde is believed to have played a significant role in facilitating this investment.
“We have bought an asset that is very coveted by many other potential buyers,” he added.
Stamford Bridge’s capacity of around 40,000 fans is far fewer than Arsenal (60,700), Tottenham (62,850), Man United (74,000), Liverpool (61,370) and Man City (53,400). The board is mulling over the decision of whether to redevelop the current infrastructure or set up a completely new stadium at Earl’s Court. It is believed that part of the funding will also be allocated towards rebuilding Cobham, their training facility.
As Boehly and Co. continue to work behind the scenes to take Chelsea to new heights off the pitch, Mauricio Pochetino has a job on his hands to turn around the fortunes of the club on the pitch. They have won just once in five matches in the Premier League and will be desperate for the three points when they host Aston Villa on Saturday.
