Chelsea Gives Private-Equity Ball a Bad Name

Chelsea FC fired its manager after losing five straight Premier League games without scoring a goal, marking its worst run of defeats in more than a century. Management changes are nothing remarkable in the results-driven business of top-level football, but the upheaval at the west London club has a wider resonance. The team’s imploding form and the rising disenchantment of supporters call into question the compatibility of private equity-style methods with English soccer. Four years after US investor Todd Boehly and Clearlake Capital sealed a £4.25 billion ($5.7 billion) deal to take control, the walls look to be closing in.

Tuesday’s 3-0 loss at Brighton made it a near-certainty that Chelsea will miss out on Europe’s Champions League next season. That’s a major problem for a club that spent more than £1.5 billion assembling the most expensive squad in English history and reported a £262 million pretax annual loss — also a Premier League record — at the start of April. The revenue hit from failing to appear in the top European competition looms just as tighter rules take effect that will limit spending on players to a percentage of the top line. Chelsea has the lowest revenue of the “big six” Premier League clubs — and less scope to increase it once it’s deprived of the broadcasting and prize-money windfall of playing in Europe, given that the club has the smallest stadium by a distance among the elite group.