Inside Chelsea’s £1bn Borrowing: What It Means for the Club’s Future | OneFootball

Chelsea’s £1.165bn Debt and What It Really Means for the Club

Ownership Structure Drives Borrowing Strategy

The financial scale of Chelsea’s rebuild under Todd Boehly and Clearlake Capital continues to command attention. As The Athletic reports, the club’s ownership group has now borrowed over £1.165 billion through a blend of revolving credit and redeemable preferred equity agreements to support their rapid expansion.

This isn’t just about Stamford Bridge. It’s about Strasbourg, training infrastructure, real estate acquisitions, and, of course, a player recruitment strategy that has surpassed £1bn since the 2022 takeover.

According to The Athletic, “Of the £1.165billion, £755.2m is repayable by July 2027 and £410.2m by August 2033. The £755.2million loan, which sits in Blueco 22 Ltd, attracts interest at 7.5 per cent to eight per cent based on current rates and is a revolving credit facility. Think of it as a credit card.”

Photo IMAGO

Borrowing Explained and Future Commitments

The other key component is the redeemable preferred equity agreement from Ares Management, an American asset manager that injected £410.2 million into 22 Holdco Ltd, Chelsea’s holding company.

As per the report, “If no repayments are made on the £410.2million loan until the August 2033 repayable date, then, currently, the PIKs accrue at around 12 per cent… a rough estimate gives a total cost of over £850m to service the preferred equity agreement.”

This borrowing method – essentially a hybrid of debt and equity – accrues interest without immediate cash impact. That means current operations aren’t being drained, but the long-term repayment obligation grows each year.

Key Difference from Manchester United’s Debt Model

Importantly, Chelsea’s loans are not the club’s direct burden. Boehly and Clearlake are shouldering the financial strain via 22 Holdco Ltd, and Chelsea are ring-fenced from these repayments – unlike Manchester United, where the club pays for ownership via leveraged debt.

As The Athletic points out, “United paid £37m in interest fees in 2023-24 to service the debt the Glazers placed on the club. In other words, United are essentially paying for the privilege of being owned by the family.”

This distinction is crucial. It means Chelsea’s footballing operations can continue relatively unencumbered – for now – by parent company liabilities.

Photo: IMAGO

Risk Management and Future Considerations

Could this become problematic? Yes – if assets don’t appreciate or the debt is mismanaged. But Chelsea’s owners are betting on growth. The structure provides flexibility to refinance, delay repayments, or pass debt to future ownership.

As outlined, “It is also worth noting that because the money has been borrowed over multiple years, it gives the club’s owners plenty of flexibility, meaning they could choose to refinance the debt at a later date.”

The challenge lies in balancing ambition with sustainability. With losses over the past two years exceeding £1.15 billion, Chelsea are playing a long game – one in which success must eventually be matched by financial stability.

Our View – EPL Index Analysis

From a Chelsea fan’s perspective, this financial manoeuvring draws a mix of admiration and anxiety.

On one hand, it’s refreshing to see ambition backed by action. The squad overhaul, long-term signings, and infrastructure development point to a vision beyond quick fixes. Boehly and Clearlake clearly want to establish Chelsea as a global powerhouse.

On the other, the numbers are staggering. £1.165 billion in borrowing, PIK interest that could hit £850 million, and over £100 million in interest paid last year – all of this sparks concern about what happens if results don’t follow.

Yet fans can take some comfort in knowing the club itself isn’t on the hook for the debt. Chelsea are ring-fenced, unlike United, where the Glazers’ model has drained the club for years.

Some fans will say, “It’s modern football – no top club operates without debt anymore.” Others will worry, “What happens if we miss out on Champions League for two more seasons?”

The truth likely sits somewhere in the middle. Chelsea are gambling on success, but they’ve done so without tying the club’s day-to-day cash flow to loan repayments. That buys them time – but not unlimited patience.