Chelsea face a wait to find out if their shirt deal with Infinite Athlete will be approved by the Premier League.
Chelsea remain in limbo over a £40m per year front of shirt sponsorship deal that is key to their need to generate revenue after a mammoth transfer spend.
Even with the disruptive nature of the Saudi Pro-League’s push for audience through spend, Chelsea have been dominant force in the global transfer market since Todd Boehly and Clearlake Capital acquired the club in May 2022.
More than £900m has been spent on transfer fees, the most recent being the £170m-plus that was shelled out to land Moises Caicedo and Romeo Lavia from under the noses of Liverpool after the Reds had agreed a £111m deal with Brighton & Hove Albion for Caicedo and having had a number of bids rejected by Southampton for Lavia.
While some £250m has been recouped in transfer fees and Chelsea have used the accounting tactic of offering longer contracts to spread the amortisation charges for transfer fees as they appear in the accounts, the London outfit face at least this season without lucrative European football, which in turn brings not only prize money but more matchdays at Stamford Bridge that translates into more revenue.
One of the main assets a club can sell to raise revenue is their front of shirt sponsorship space. In the case of Liverpool, they inked an extension with Standard Chartered last summer for what is believed to be £50m plus per season; a deal that will take the long-standing partnership between the Reds and the financial institution through to the end of the 2026/27 season and 17 years in total.
Chelsea have started this season without a front of shirt sponsor. This isn’t down to it being some kind of 1990s Barcelona move – this is because the club had, until earlier this month, been unable to negotiate a deal with a firm for the sum that they wanted, with the discussions over who would replace the £40m per year deal with Three coming at a less than ideal time for Chelsea, who last season finished 12th in the Premier League and have no European football exposure to offer partners this season, and no guarantee of it for next season either.
Talks around a short-term deal with gambling firm Stake.com were held before pressure from supporters forced a climbdown. Gambling and crypto firms have filled something of a need in football for some clubs, often willing to pay above market value for the sponsorship space and on shorter term contracts, with one eye on the impending ban on front of shirt partnerships with gambling firms to arrive in 2025.
For Boehly and Clearlake, protecting the value of their main shirt sponsor is important. While getting an uplift was always going to be tremendously difficult given how poor Chelsea were on the field last season, and how they have less leverage in discussions, retaining status quo avoids the problem of accepting less and having weakened their negotiating position in seasons to come. At a time when the club have raised the bar for the rest of English football, breaking the British transfer record twice in eight months, seeing the value of its main sponsorship deal fall would not be a good look, nor would it be a welcome financial development.
Earlier this month the club entered into a multi-year agreement with a sports-focused technology firm called Infinite Athlete. At a reported £40m per year, that deal would have at least kept Chelsea in a holding pattern to get greater leverage when they next head to the table to talk about the value of their sponsorship assets. But, according to the Telegraph, the deal is being scrutinised by the Premier League under its ‘fair market value’ guidelines, and as they did against Liverpool, Chelsea faced West Ham United without a front of shirt sponsor.
What the scrutiny is understood to be focused on is the link between Boehly and Clearlake Infinite Athlete, a company only created in recent weeks through a merger between two companies, Tempus Ex Machine and Biocore. The former of those two companies entered into a seven-year agreement with Chelsea back in April to become a technology partner.
One of the issues is that Infinite Athlete counts US private equity firm Silver Lake as a major investor, with Silver Lake also having major investment into American sports apparel firm Fanatics, where Eldridge Industries, an investment firm owned by Boehly, also has significant investment.
While those somewhat convoluted investment links will likely pass the sniff test when it comes to the Premier League, perhaps of more concern to those tasked with investigating will be the fact that Infinite Athlete’s annual turnover stands at $15.4m, and how the financials for a £40m per year deal with Chelsea will stack up.
No decision has yet been made by the Premier League and Chelsea are forced to play the waiting game and face the prospect of several more weeks of no shirt sponsors – something that will be impactful should they have to go back to the table for new sponsors given that the season, and exposure opportunities for partners, has already started.
For Liverpool, while they have been busy adding new partners such as Peloton and Google Pixel during the summer, the main partnerships that they have are long-standing relationships that have seen incremental growth. That has given the Reds greater financial certainty during the less than certain economic times in recent years.
Chelsea will hope that the Premier League look kindly upon their bid to partner with Infinite Athlete so that they can avoid the headache of potential reduced revenue at a time when they are outspending everyone else in world football.
