￡200m valuation for Chelsea FC Women?

Chelsea is reported to have received interest from investors seeking to acquire a stake in its women’s team. The ownership group are said to value the team at c.$200m (￡159m).

A 3rd party investment solely into the women’s team would be a first in England. Mercury 13 explored a deal at the end of 2023 which aimed for co-ownership of Lewes FC with responsibility for funding the women’s team only, but were unsuccessful.

External investment into Chelsea Women could enable a greater focus on the women’s team and allow the club to better pursue diversified strategies across their men’s and women’s departments which cater to their distinct audiences. However, strategic alignment, structure, and governance considerations will be key to managing potential conflicts of priorities between investors and facilitating the necessary shared use of facilities, brand, intellectual property, budget and human resource.

A $200m (￡159m) enterprise value would represent 18x 2022/23 revenue ($11.1m, ￡8.8m) for Chelsea Football Club Women Limited, which suffered a net loss of $5.2m (￡4.1m) in the same period. Chelsea (men and women) traded at c.5x EV/revenue when it was acquired by Clearlake Capital in May 2022. While there are few available valuation benchmarks for women’s football clubs, several National Women’s Soccer League (NSWL) teams in the US have traded at substantial valuations, including:

However, it can be difficult to draw direct comparisons between the US and England. NWSL franchises operate independent of men’s teams in closed leagues, whereas major English women’s teams are attached to historic men’s teams and face the threat of relegation. The NWSL also has a significantly larger domestic broadcast deal with Amazon, CBS, ESPN, and Scripps worth around $60m (￡48m) per annum, compared to c.$10m (￡8m) for the Women's Super League (WSL).

Perhaps the most relevant benchmark for Chelsea Women is Michele Kang’s acquisition of a majority stake in Olympique Lyonnais Feminin (Lyon) in 2023, which valued the club at c.$54m (￡43m), which was likely between 6-11x EV/revenue. Like Chelsea, Lyon are the one of the leading women’s clubs in Europe having won the Women’s Champions League a record 8 times.

Whilst the strength of the Chelsea brand may justify a valuation premium, any party investing into Chelsea Women at 18x EV/revenue will be making a considerable bet on the growth of women’s football and its commercial revenues. From the start of the 2024/25 campaign, the WSL and WSL Championship will operate outside the FA in a NewCo structure which will be focused on the commercial development of women’s football. A key focus for the NewCo will be growing the value of the WSL’s domestic broadcast deal which was flat at $10m (￡8m) in the recent 1-year renewal with Sky Sports. The NewCo is reported to be targeting an annual fee of $19-25m (￡15-20m) from 2025, but will have to contend with significant headwinds in the wider media industry. DAZN announced in January that it was lifting the paywall on its women’s football content, including the UEFA Champions League, citing limited success in monetisation through a pay-tv model.

The prospective sale of a stake in its women’s team should also be considered in the wider context of Chelsea’s compliance with the Premier League’s Profit & Sustainability (PSR) rules. To maintain compliance in the 2022/23 season, two club-owned hotels were sold to a sister company. Whilst spending on the women’s team is excluded from the PSR calculation, it is possible a profit on the sale of a stake in the women’s team could benefit Chelsea’s position in either the 2023/24 or 2024/25 season.

Clearlake could also be exploring bringing on a strategic partner to enable them to develop a business that has different fundamentals and is at a different stage of growth to the core business they acquired. Retaining a stake would allow them to continue to share in the commercial upside many predict will come with the increased popularity of the women’s game. Valuation, as is often the case with football clubs, will likely defy fundamental valuation techniques and be determined by the size of the pool of prospective buyers. If the desired valuation is achieved, you can be certain Chelsea won’t be the last Premier League club seeking investment into their women’s team.

Written by:

Nic Hamer , Associate, Oakwell Sports Advisory