Abstract
Chelsea Pitch Owners plc (CPO) is a public limited company, the historical result of an effort to protect a financially struggling football club from urban developers hungry for the centrally located ground in London. In the process, ex-Chelsea FC owner Ken Bates invented the scheme, predicting that real estate developers would run away once they found out that CPO is mostly owned by loyal Chelsea supporters as well as the fact that company’ s shares had been scattered all over many places, and so no prospective purchasers could control a majority of shares. But the biggest obstacle was that they would have to give up the usage of the famous brand Chelsea FC in case they moved the stadium to the suburbs, far from the current one. This was the ultimate poison pill clause.
Professional football clubs are by nature unstable financially because of heavy competition in the league, so gate revenue is critically important for them, though at some times they may enjoy rapidly increasing media rights revenue as well as sponsorship revenue (merchandising included). Surely gate revenue is invaluable because it is firmly supported by fans, whether a club wins or loses. At its core the sports industry is a live event business. In addition, event attendance correlates strongly with other sports fan behaviors, such as media usage. The problem is that increases in ticket sales inventory require large investments in new or renovated facilities. Therein lies the question of how a club can acquire substantial money without raising already expensive tickets or simply moving out of the crowded metropolitan London to the suburbs, far from the hometown and against supporters’ protests.
CPO reminds us of how a stadium can be best used by any club. Judging from American experiences, we should look more closely for growth opportunities for gate revenue by using the venue for other events, such as concerts and other sporting events.
