Following on from my initial analysis of the Chelsea ownership, I thought a further look at the two companies, Blueco 22 Limited and its parent company 22 Holdco Limited would be of interest.
Before discussing the numbers, it is useful to understand that Chelsea Football Club is owned through a deliberately layered structure designed to separate operations from financial liabilities.
Sitting at the head is 22 Holdco Limited (company number 14075518), incorporated on 28 April 2022 and originally registered under the name “Blues Partners Limited” before being renamed on 22 August 2023. Its registered office is C/O Cogency Global (UK) Limited, 6 Lloyd’s Avenue, London EC3N 3AX.
Beneath that is BlueCo 22 Limited (company number 13949552), incorporated on 2 March 2022, with its registered office at Stamford Bridge, Fulham Road, London SW6 1HS. BlueCo 22 in turn owns Chelsea FC Holdings Limited (the operating subsidiary, formerly Chelsea Village PLC / Chelsea FC PLC), which holds Chelsea Football Club Limited and the various ancillary entities.
This is not arbitrary; it is a textbook private-equity capital-stratification design. Each layer is engineered to hold a specific tranche of liability, with the most expensive and most subordinated debt parked at the very top, deliberately distant from the operating club, in order to navigate the Premier League’s Profitability and Sustainability Rules and UEFA’s Squad Cost Rule.
Latest accounts filed
Both companies filed their group accounts for the year ended 30 June 2025 with Companies House on 12 April 2026 (the BlueCo 22 filing runs to 47 pages, the 22 Holdco filing to 52 pages).
Because BlueCo 22 is wholly owned by 22 Holdco and produces only a sub-consolidation, the consolidated 22 Holdco accounts capture the full economic picture of the Chelsea ownership group; the BlueCo 22 accounts are essentially a subset of the same group, excluding the parent-level PIK debt and the £450 million equity injection that occurred at the 22 Holdco level.
Persons with significant control and equity structure
Both companies share the same ultimate controlling parties.
The persons with significant control (PSCs) at 22 Holdco Limited are Behdad Eghbali and José E. Feliciano, the two co-founders of Clearlake Capital Group LP, with Todd Boehly also disclosed as a director and holder. These PSC notifications were registered on 30 June 2023, replacing the previous PSC entity “Blues Investment Midco Limited”.
At the BlueCo 22 level, Blues Partners Limited (the former name of 22 Holdco itself) appears on the PSC register. Although Boehly is the public face, the controlling economic interest sits with Clearlake Capital, with Mark Walter (Guggenheim Partners, also majority owner of the Los Angeles Dodgers) and the Swiss investor Hansjörg Wyss as minority partners.
The Ordinary A shares are structured with a liquidation preference, which is a standard feature in private equity deals where one partner provides the bulk of the strategic capital. In the event of a liquidation, dissolution, or a “change of control” event (such as a sale of the club), the holders of Ordinary A shares are entitled to receive their initial capital contribution plus a specified hurdle rate (often between 8% and 12% IRR) before any proceeds are distributed to the Ordinary B shareholders.
This mechanism ensures that if the enterprise value of 22 Holdco Limited declines, the first losses are absorbed by the Ordinary B equity, while the Ordinary A equity remains protected up to its preference amount. This structural priority is essential given the group’s high debt-to-equity ratio and the volatility of the football transfer market, which accounts for over 60% of the group’s total asset base.
Anti-dilution and governance covenants
Class A shares also benefit from robust anti-dilution protections. Since the 2022 takeover, the group has engaged in several rounds of re-capitalisation to fund player transfers and manage liquidity. Anti-dilution clauses ensure that if new equity is issued at a valuation lower than the initial acquisition price, the Ordinary A shareholders are issued additional shares to maintain their 61.85% stake without further capital outlay, or the conversion price of their instruments is adjusted accordingly.
Furthermore, the Class A shares carry veto rights over reserved matters, which include the issuance of new debt exceeding certain thresholds, changes to the club’s constitution, and significant asset disposals. These rights allow Clearlake Capital to maintain the group’s strategic direction even in the face of significant operational losses, such as the £700.8 million deficit reported for the 2024-25 fiscal period.
The share capital position at both companies is highly unusual and revealing.
BlueCo 22 Limited has issued share capital of just £6,100 in nominal value following five separate allotments tracked in the SH01 filings during 2024 and 2025: from £1,100 (June 2022, post-acquisition) through staged increases on 8 October 2024 (£3,100), 19 November 2024 (£4,100), 27 February 2025 (£5,100), and 25 March 2025 (£6,100).
22 Holdco Limited’s nominal capital has grown from £25,499.80 to £28,999.80 over the same period through corresponding allotments, but, critically, the 22 Holdco 2024/25 accounts disclose that 179.4 million A Ordinary shares and 110.6 million B Ordinary shares were issued during the year, raising £450 million in fresh equity (almost entirely as share premium rather than nominal capital).
This £450 million capital injection in 2024/25 is the most significant equity transaction in the group’s history and was specifically deployed to address the looming transfer-debt liquidity squeeze and is intended to demonstrate to lenders and regulators that the consortium remains willing to inject fresh equity rather than relying solely on debt expansion.
The losses
The headline numbers are stark. For the year ended 30 June 2025, 22 Holdco Limited reported a consolidated statutory loss before taxation of £700.8 million, against a prior year loss of approximately £445 million.
This is the largest annual loss ever reported by an English football ownership group.
The deficit is driven by three interlocking factors:
- Total turnover of £536.5 million (up just 2.6% from £523.1 million) was overwhelmed by operating expenses of £1,166.8 million (up 19.5%), producing an operating loss of £628.7 million;
- Player and intangible amortisation totalled £409.8 million (£284.3 million on player registrations, £125.5 million on brand and goodwill, the latter being a non-cash legacy of the £2.5 billion-plus 2022 acquisition price being amortised over a deliberately short ten-year life);
- Net interest expense reached £156.8 million versus £114.7 million the year before.
By contrast, the underlying operating subsidiary, Chelsea Football Club Limited, reported a comparatively narrower pre-tax loss of approximately £262.4 million for the same period. The approximate £440 million gap between the club-level loss and the group-level loss is almost entirely explained by debt-servicing costs sequestered at the holding-company levels (BlueCo 22 and 22 Holdco), goodwill and brand amortisation arising from the consortium’s acquisition accounting, and the elimination of intra-group transactions such as the £200 million accounting profit booked on the transfer of Chelsea Football Club Women Limited to a sister entity (an explicit Profitability and Sustainability Rules compliance manoeuvre).
BlueCo 22 Limited’s standalone consolidated loss is not separately reported in the public domain at this level of granularity, but, given the parent’s £595.9 million PIK loan does not sit within BlueCo 22, the BlueCo 22 sub-group loss will be materially smaller than the 22 Holdco group loss, the difference being the parent-level PIK interest accrual of approximately £55–70 million in the year and the parent-level goodwill amortisation.
As a working estimate, the BlueCo 22 sub-consolidated loss for 2024/25 is in the region of £620–640 million.
Lending structure:
The Group’s external borrowings as at 30 June 2025 totalled £1,390.1 million, and this entire figure is disclosed as falling due after more than five years. The structure comprises two completely distinct facilities held at different levels of the group, with very different risk profiles, lender constituencies, pricing structures and maturity dates.
Facility one: BlueCo 22 senior term loans (£794.2 million)
This is the senior, secured borrowing held at the BlueCo 22 Limited level (company 13949552).
The original facility was established in July 2022 at the time of the original Chelsea acquisition, secured by the registration of charge 139495520001 on 12 July 2022 against BlueCo 22’s assets.
The facility has grown over time through both drawdowns and rolling capitalisations, and stands at £794.2 million as at 30 June 2025, up from approximately £755.2 million reported the previous year (the figure quoted in The Athletic’s earlier analysis).
The facility carries floating-rate interest priced at SONIA plus 3.25%. With SONIA having averaged in the region of 4.3–4.7% during the 2024/25 reporting period, this produces an all-in coupon of approximately 7.5–8.0% per annum.
Unlike the parent-level Ares loan, this is conventional cash-pay debt, meaning interest is serviced in cash quarterly rather than capitalised onto principal.
I have previously characterised this as a revolving credit facility, although the 22 Holdco accounts use the term Blueco Term Loans (plural), suggesting it may comprise more than one tranche or that an originally revolving facility has at least partially been converted to a term loan.
The facility has a hard-stop maturity date of 13 July 2027, meaning Chelsea’s owners face a refinancing wall of approximately £794 million in fifteen months from now (with reference to today’s date in May 2026).
Although the public reporting does not name the specific lenders, market convention for sterling sports-finance facilities of this size strongly suggests a syndicate of banks led by JPMorgan Chase (which is widely reported elsewhere to have arranged credit facilities of approximately £800 million for the BlueCo group, comprising a revolving component and a term-loan component), with participation from other relationship banks.
The lender consortium is, however, not itemised in the published accounts.
The security package is comprehensive: the facility is secured by a floating charge over the assets of the Group, which crucially includes the shares in the underlying football clubs themselves. This means that in a default scenario, the lenders would have direct recourse to the equity of Chelsea Football Club Limited and Racing Club de Strasbourg, providing them with an effective ability to take control of these operating assets.
The implicit cost of this facility expressed as a blended annual rate is therefore approximately 7.5–8.0% during 2024/25.
Facility Two: 22 Holdco PIK loan from Ares Management (£595.9 million)
This is by far the more controversial and structurally significant of the two facilities, and interesting in ways that the senior debt is not.
The principal was originated in September 2023 in an amount of £410.2 million (approximately $500 million at then-prevailing exchange rates), and has since grown to £595.9 million at 30 June 2025, an increase of £185.7 million over twenty-one months, entirely through the capitalisation of accrued interest plus possible additional drawdowns under the delayed-draw structure.
The charge was registered on 22 August 2023 (charge 140755180001) against the assets of 22 Holdco Limited.
The lender is Ares Management Corporation, the publicly listed Los Angeles-based alternative investment manager, acting through its Opportunistic Credit division.
SEC filings disclose that Ares has syndicated tranches of the loan across multiple of its own internal vehicles, including Ares Capital Corporation (the flagship business development company, ARCC), Ares Strategic Income Fund (ASIF), and the CION Ares Diversified Credit Fund (CADC).
This syndication is partly for portfolio-concentration management under the US Investment Company Act of 1940 and partly to package the high-yielding exposure for distribution to retail and high-net-worth investors who buy into Ares funds.
The instrument’s classification is itself a study in financial engineering. In Ares’s SEC filings, it is variously described as a senior subordinated loan or subordinated delay draw term loan within the Sports, Media & Entertainment sector.
In the 22 Holdco UK accounts and in some press releases it has been described in equity-like terms as preferred equity. This dual nomenclature is deliberate: economically the instrument behaves like preferred stock (cumulative coupon, deeply subordinated to senior debt, sitting just above common equity in the capital stack), but legally it is documented as debt, which has tax-deductibility advantages in the UK and creates greater certainty of repayment than pure preferred stock would.
SEC filings classify it as a non-qualifying asset under Section 55(a) of the Investment Company Act, the bucket that BDCs reserve for their highest-yielding, non-US and most exotic exposures.
The pricing is the single most consequential feature of the loan. The coupon is structured as SONIA plus 7.50%, floating. With SONIA at approximately 4.0–4.7% during the reporting period, the all-in effective rate has fluctuated between approximately 11.5% and 13.0% during 2023/24 and 2024/25.
SEC schedules from the various Ares vehicles confirm specific rates ranging from 11.47% (CADC tranches) to 12.96% (ARCC and ASIF tranches), with the variation reflecting different reset dates rather than different economic terms.
Crucially, this entire coupon is structured as Payment-in-Kind, or PIK. Rather than being serviced in cash, the interest accrues and is added to the outstanding principal at each compounding period. This is the mechanism by which £410.2 million has become £595.9 million in less than two years.
At a compounding rate of approximately 12% per annum, the principal balance will roughly double every six years. Without any cash repayments before the maturity date, the terminal balloon obligation in August 2033 is mathematically projected to exceed £850 million and may exceed £1 billion, a number that would represent over twice the original principal.
The maturity date is universally cited across SEC filings as 22 August 2033, giving an original term of ten years from origination. SEC disclosures by ARCC also reveal a delayed-draw component: a $14.0 million revolving and delayed-draw commitment that, as at the most recent reporting date, was entirely un-drawn.
This indicates that Ares retains contractual obligation to fund additional tranches upon achievement of pre-negotiated milestones, most plausibly tied to specific stages of the Stamford Bridge stadium redevelopment or further multi-club acquisitions.
Conversion rights, warrants and default mechanics
The honest answer to the headline above is that some of this is concealed by the private nature of the loan documentation, but a careful reading of the public disclosures yields significant inference.
On equity conversion, Ares Management’s standard SEC disclosure language across its entire portfolio reads: “Percentages shown for warrants or convertible preferred stock held represents the percentages of common stock we may own on a fully diluted basis, assuming we exercise our warrants or convert our preferred stock to common stock.”
This is Ares’s universal accounting policy, and its application to the 22 Holdco exposure strongly implies that warrants or conversion rights are embedded in the agreement, even though Ares currently reports owning less than 5% of voting securities (which keeps it below the affiliate threshold under the Investment Company Act).
Less than 5% of voting securities is entirely consistent with holding substantial out-of-the-money warrants or un-exercised conversion options, because these instruments are typically structurally non-voting until exercised.
Ares’s Opportunistic Credit division explicitly markets itself as combining debt with potential equity upside where possible, and structuring a billion-pound-plus deeply subordinated PIK loan with no equity kicker would be wholly inconsistent with that mandate.
The overwhelming probability, supported by the standard structuring of comparable Ares deals visible in SEC filings (for example, Ares’s exposure to Capstone Acquisition Holdings, which includes warrants to purchase Series 1 preferred stock; or Zoro TopCo, where Ares holds Class A common units alongside debt), is that the 22 Holdco facility contains either detachable warrants or a hard-conversion clause.
The trigger for any such conversion would typically be one of: a defined liquidity event (sale of the club, IPO of any group entity), a partial sale crossing a specified threshold, a payment default, or a covenant breach.
The conversion strike price is not publicly disclosed but would likely be set by reference to the enterprise value implied at origination, a number around £4–4.5 billion, meaning Ares would be incentivised to convert only if the group’s terminal value materially exceeded that figure.
Regarding documented default mechanisms, neither the BlueCo 22 nor the 22 Holdco facility documentation has been published, so the precise events of default are not in the public record.
However, three categories of default trigger can be inferred with confidence.
The first is conventional payment default on the senior facility: failure to pay scheduled cash interest on the BlueCo 22 facility, or failure to refinance or repay the £794.2 million principal by 13 July 2027, would constitute an event of default under the senior facility.
Because the senior debt is secured by a floating charge over all group assets including the shares in the football clubs, the senior lenders would in that scenario be entitled to enforce against those shares, meaning the senior bank syndicate could in principle take possession of Chelsea FC Holdings Limited and Racing Club de Strasbourg.
The second is breach of financial covenants, which for facilities of this kind typically include leverage ratios (Net Debt / EBITDA), interest cover ratios, and minimum liquidity tests.
The Group’s interest expense of £156.8 million against turnover of £536.5 million, meaning interest costs already absorb 29% of revenues, is uncomfortably close to typical covenant headroom.
The third is a cross-default or change-of-control trigger: PIK structures of the type Ares has provided almost invariably include cross-acceleration to the senior facility, meaning a default at the BlueCo 22 level would automatically trigger acceleration of the parent PIK loan, and vice versa.
In a stressed scenario, failure to qualify for the Champions League for several seasons, a stalled stadium redevelopment, or simply the inability to refinance the £794.2 million senior facility in July 2027, the cascade would likely play out as follows.
Senior lenders would have the first right to take control of the football clubs through enforcement of the share charge. Ares, being structurally subordinated, would be left holding deeply impaired paper.
It is at this point that the embedded conversion features become economically critical: rather than allowing the senior lenders to wipe out Ares’s £600 million-plus exposure entirely, the Ares documentation almost certainly contains provisions that allow it to negotiate a debt-for-equity swap, potentially with the senior lenders, at the most distressed moment of the cycle.
The end result, in a downside scenario, is that the Clearlake/Boehly common equity buffer would be wiped out and control of the club’s parent group would shift either to the senior bank syndicate or to Ares (or some combination).
This is why the structure is sometimes described as an instrument under which Ares effectively holds the keys to eventual ownership, with the consortium racing the compounding clock to grow enterprise value faster than the debt grows.
This is the scenario currently being played out at John Textor’s Eagle Football Holdings.
Cost of funding
Pulling these threads together, the blended cost of funding for the BlueCo group during 2024/25 can be calculated reasonably precisely.
The £794.2 million senior facility at SONIA plus 3.25% produces an effective rate of approximately 7.5–8.0%, generating annual cash interest of approximately £60–63 million.
The £595.9 million Ares facility at SONIA plus 7.50% produces an effective rate of approximately 11.5–13.0%, generating current annual interest accrual (capitalised, not paid in cash) of approximately £69–77 million. This, of course, increases exponentially each year.
The combined annual interest cost on average debt during the year of approximately £1.3 billion is therefore in the region of £130–140 million, broadly consistent with the £136.4 million of “interest payable on external loans” disclosed in the 22 Holdco accounts.
This implies a blended weighted-average cost of debt of approximately 9.5–10.5% per annum across the consolidated facility. It is extremely high for a sporting institution with global brand value, and a direct consequence of the choice to fund the acquisition and subsequent expansion through highly subordinated private credit rather than equity.
Closing observations
The Chelsea group funding has the following structure: shorter-dated, floating-rate, partly cash-pay senior bank debt backed by a charge over the equity of the football operations themselves, layered with deeply subordinated PIK debt that compounds aggressively at private-equity-style rates.
The Chelsea structure has imposed an almost binary deadline: by July 2027 the £794.2 million senior facility must be refinanced or repaid, and by August 2033 a balloon obligation likely to exceed £1 billion must be settled. Achieving either will require a combination of consistent Champions League qualification, materially expanded matchday revenues from a redeveloped Stamford Bridge – the time frame for which is extremely tight, ignoring the then requirement for further funding, and continued profitable trading of academy graduates whose net book value is zero.
All, or any of the above is not guaranteed.
Supplementary analysis:
Blues Investment Midco LP/ Clearlake Opportunities Partners III (COP III)
The persons with significant control (PSCs) at 22 Holdco Limited are Behdad Eghbali and José E. Feliciano, the two co-founders of Clearlake Capital Group LP, with Todd Boehly also disclosed as a director and holder. These PSC notifications were registered on 30 June 2023, replacing the previous PSC entity Blues Investment Midco Limited.
However the funding of Blues Investment Midco LP is worthy of note by virtue of the credit facility provided by Clearlake Opportunities Partners III (COP III).
COP III is an opportunistic private credit and special situations fund managed by Clearlake Capital Group, designed to provide flexible capital to portfolio companies or to fund the GP’s own investment commitments. The fund is heavily backed by institutional investors, including the State of Pennsylvania Public School Employees Retirement System (PA PSERS).
COP III facility to Blues Investment Midco LP
The borrowings from COP III to Blues Investment Midco LP are upper-tier leverage. While the UK-based 22 Holdco Limited and its subsidiaries (such as Blueco 22 Limited) hold senior and subordinated debt at the operating level, the Midco loan is structurally subordinated to all UK group debt but senior to the common equity held by the limited partners of Clearlake.
This facility was utiliised by Clearlake to finance its 61.85% equity contribution during the £2.5 billion purchase of Chelsea FC. By borrowing at the Midco level from its own credit fund (COP III), Clearlake was able to enhance its internal rate of return (IRR) on the deal while providing PA PSERS and other LPs with a high-yielding, credit-like exposure to the asset.
The specific terms of the COP III loan reflect the special situations mandate of the fund. Because the loan is provided to a Cayman entity (Blues Investment Midco LP), its details are not as readily available in UK Companies House filings as the Holdco-level debt, but they can be reconstructed from institutional disclosure reports and the broader group’s financial architecture.
Estimated terms and structure of COP III Loan to Blues Investment Midco LP
| Metric | Details and Evidence | Rationale and Context |
| Lender | Clearlake Opportunities Partners III (COP III) | Opportunistic / Private Credit Fund |
| Principal Amount | Estimated £300 M – £450 M | Corresponds to the leveraged portion of Clearlake’s equity |
| Interest Rate | 12.5% – 15.0% (Total Yield) | Market rate for subordinated/mezzanine credit in 2022-2024 |
| Structure | Mezzanine PIK Notes | Designed to conserve cash at the Midco level |
| Maturity Date | 2030 – 2033 | Aligned with the 22 Holdco PIK loan maturity |
| Security | Pledge of 179.4 M Ordinary A Shares | Direct claim on the majority equity stake in 22 Holdco Ltd |
| Cost of Capital | SONIA + 8.5% to 10.0% | High-risk premium due to structural subordination |
The PIK nature of this loan is a vital feature. It allows Blues Investment Midco LP to accrue interest rather than paying it in cash, which is necessary because 22 Holdco Limited is currently not in a position to pay. This creates a compounding effect, where the principal balance of the COP III loan grows annually, mirroring the balloon obligation observed at the 22 Holdco Limited level with its £595.9 million Ares-led PIK facility.
Among its major institutional investors sits The State of Pennsylvania Public School Employees Retirement System (PA PSERS)
Investment rationale and risk oversight
PA PSERS monitors its investment in COP III as part of a broader real assets” and private credit” allocation strategy intended to achieve returns superior to the public markets, which have seen increased volatility and credit dispersion.
For PA PSERS, the COP III loan to Blues Investment Midco LP is attractive because it offers a high contractual yield (12.5%+) and is secured by the equity of a globally recognised asset. However, the downside risk mitigation prioritised by the fund’s advisors (such as CION Ares Management) is challenged by the club’s current financial trajectory. The statutory loss of £700.8 million and the club’s technical insolvency indicate that the equity cushion protecting the COP III loan is thinner than originally projected.
PA PSERS institutional exposure and monitoring
| Oversight Body | Role | Key Monitoring Metric |
| PSERS Board | Asset Allocation & Strategy | Funded Ratio (Goal: 100%) |
| Executive Office | Portfolio Performance | IRR and Cash-on-Cash Multiples |
| CION Ares Management | Investment Sub-Advisor | Downside risk mitigation and credit selection |
| Clearlake Capital | General Partner (GP) | Execution of high-velocity capital deployment |
The risk to PA PSERS is not just the potential for a default on the loan, but the duration risk. The COP III loan, like the Holdco PIK loan, has a long-dated maturity (extending into the early 2030s). If the club fails to reach the Champions League consistently or if the Premier League’s broadcasting revenue growth slows, the consortium may struggle to refinance these facilities, potentially forcing a distressed sale that would impact the valuation of the COP III notes.
