TFT Keano Roundup — no.1
Welcome to issue 1 of the TFT Keano Roundup. We start with a Keano rant about Chelsea FC and Financial Fairplay and then he asks some questions about The Fans Together to learn more about the exciting fan ownership DAO.
Chelsea FC — Who is Chelsea Owner Todd Boehly and how he is helping the English Premier League club dodge FFP rules?
Since the American businessman and investor Todd Boehly took ownership of Chelsea FC following the forced sale of the club from Roman Abramovich it hasn’t taken long for the US billionaire to flex his muscles.
Todd Boehly, 49, is now chairman of Chelsea Football Club but is also an “owner of the Los Angeles Dodgers, the Los Angeles Lakers, the Los Angeles Sparks, Cloud9 and DraftKings.” Therefore, it is obvious to see that not only does Boehly have money, but his money is heavily invested into sports, so when he saw the potential of taking over the European Champions (at the time), he was always going to snatch it.
Now, Boehly is worth an estimated $4.5 billion (£3.6 billion) according to Forbes and he got there through brokering some big time deals. His first notable being the deal between Los Angeles Dodgers and Time Warner Cable, this deal would see the start of the broadcasting network SportsNet La. Since then, he has built his profile through investing into “The Hollywood Reporter, Dick Clark Productions, and Security Benefit to found his current firm Eldridge Industries.”
This guy is a sophisticated deal maker and knows his way round financial regulations. He teamed up with Clearlake Capital a huge VC fund to get the Chelsea deal over the line.
When it comes to the football authorities and Chelsea Football Club, it has always divided opinion as to whether the club just stretch the rules or flat out break them. In 2019, Chelsea were fined £460,000 after breaching rules set by FIFA about signing minors. Chelsea would also find themselves banned from signing any players for two transfer windows (unlucky Frank Lampard).
However, since Todd Boehly took ownership of the English Club, English football fans have raised concerns about their peculiar recruitment and been left scratching their heads. This is due to the sort of players they are signing, the amount of players they are signing, the amount they are signing these players for and forgetting those things for a minute what has everyone totally confused is the length of contracts being agreed, just last week Ukrainian international Mykhaylo Mudryk was given an 8 and a half year deal! Oh how we laughed at the Americans and their lack of knowledge of the English game…
The current FFP rules are in place to make sure that “rather than record the transfer fee paid in one particular season’s FFP figures, the amount paid is split and is spread over the length of the contract.” Therefore, for example, rather than recording an up front fee to their FFP figures of £88 million for signing Mudryk, they will enter around £10.4 million into the yearly FFP accounts over the next eight-and-a-half years. Ahhhhh now I see Todd!
So, it seems Chelsea and, more specifically it seems, Todd Boehly have exploited a loophole with the rules of Financial Fair Play through offering players long contracts. (How this works out in reality when three players on £200k a week decide to down tools in a year or two Idon’t know). Through these unusually long player contracts, it allows Chelsea to “amortise transfer fees” and donk £500m on transfers inside 6 months. As of January 2023, the law about players contracts allows club to “spread any transfer fees spent over the length of the player’s contract.”
However, now that a number of clubs have raised concerns about Chelsea according to The Times, UEFA have decided to explore ways to make changes to their accounting rules to ensure that clubs will split the transfers of players over a maximum of just five years. Under these rules, it is projected that Chelsea would have not been able to spend around £216 million — £86 million more than they have already in this window alone. So Todd and Chelsea: competitive advantaged gained as the FIFA rules wont be applied retrospectively.
I think its wrong and Chelsea are playing dirty through their ways of approaching transfer fees and player contracts to be honest it boils my blood, but what do you think ? Is this clever, or dodgy from Chelsea and Todd Boehly? Is it any different to the other EPL clubs that have used ludicrously large sponsorship deals to allow them free reign? How do they expect to grow revenue to mean they can sign more bodies next year or the year after now this change has happened?
TFT Interview with Simon from the Core Team
TheFansTogether or TFT. “The first DAO to transfer ownership and management of professional sports clubs to fans.”
So who are they ? What are they about ? And what exactly are their main goals?
My name is Keane Webster and today I was able to conduct an interview with Simon from The Core Team of The Fans Together, in order to gather a clearer understanding for everybody on the DAO group.
Starting the Interview off, I asked Simon if he could give me and the readers a general run down on the idea of TheFansTogether and what their main purpose in their work is.
“The idea behind TFT was many years in the making. Simply, you ask yourself the question can sports fans come together and run professional sports teams and install their own ideas and motivations of growing and building these clubs? We’ve seen other fan projects focused on one club and instead of that approach we think that the trend in modern sports is for cross overs in sports and groups of teams that can share expertise resources and fans eyeballs.”
Simon went on to explain that despite not being anywhere near the size of “the Red Bull group or Mancester City” that he and TFT believe that their group outlook and approach is right for modern sport and that by strategically building a group of teams TFT can “add value to individual teams and have a benefit of crossover for fans from one to the other…this will only grow as the group grows and we hope to feed players, coaches and technology into the TFT clubs we already either own fully or part own”.
After Simon mentioned the Red Bull group and Manchester City and their fantastic success, I asked Simon whether he believes that TFT are capable of one day reaching those heights, and whether that is something TFT aim for as it is evident through the multiple clubs they’re linked with already that they have the ability to successfully work with others.
“It’s all about what we can achieve together. Right now, we are putting the building blocks in place with a portfolio of clubs so we can achieve something that is meaningful. Even in the last year, the market has moved on so dramatically with the elite clubs seeing crazy valuations. £3bn into the Chelsea deal and with Man United now on the market, and depending on papers that you read, it looks like they are valued somewhere between £5bn — £8bn! Yet we see with some of the less fashinable clubs like Brighton and Fulham that the good owners have got things right and built a base that has allowed them to progress, compete and stabilise in the top divisions. Of course there is more to football than just the UK and our aim to build a worldwide group of sports clubs means that when the time comes we will attain a focal club that we can feed the infrastructure that we are building now into. With the right spearhead team at the right time, success can be found and a huge amount of fun be had helping them to grow”.
Within TheFansTogether last year, there was strong links between themselves and the potential equity purchase in Sunderland however, things did not quite work out. Simon decided to speak about this in the interview.
“Now I know our attempt to buy equity in Sunderland didn’t go down very well with their fans, and due to NDAs at the time, we couldn’t talk about it. But look at that club. What an amazing amazing city, stadium and most importantly set of fans. We didn’t get over the line which was tough to take as we believe a team like Sunderland is the absolutely right type of team for our sort of project. We think they are superbly run day to day but don’t think they maximise their global appeal and absolutely stonking fan-base very well. Our hope was that we could help create a focal point around the club where fans could finally get their voice heard and help to protect the institution for the longterm. Right now, the Sunderland faithful still don’t have a voice on the board, which is huge shame as they have so much passion and love for their team.”
Not only was it the club and their fantastic fan base that appealed to TFT, but there was also something within the city and community that appealed to them.
“Our funders loved the city and looked at more than just the club as a place to invest, they felt they could make a much wider impact. This philosophy is something we want to echo as we search for a club that has all these attributes.”
Carrying on answering the question I had asked before about how far they think they can reach, Simon said that TFT knows that they can build towards ownership of a team that can push through to the top leagues but he knows that that it won’t be easy as football is super competitive and valuations get ever higher and it will take time.
“Football is super competitive and there are a lot of clubs with legacy financial issues still. A lot of people seeing those behemoth deals at the top think they can build value easily. That’s just not fact, the top gets further away as nations buy in to own the biggest brands. Look at the buyers of Derby, Everton and Burnley for example. All clubs who had huge investment but owners that did not get it right. Our job is to follow the TFT Charter and find clubs we can support, benefit and help protect as per the values of the fan led Crouch review the UK government commissioned. Clubs are the heartbeat of their communities and our job is to make a positive impact. Finding the right fit is the start of the journey.”
Listening to all this, it was fantastic to hear just exactly what they stand for, and how they see the business side of sports and how it links with fans. However, I really wanted to know exactly how Simon would describe the TFT philosophy. When asked, this is what Simon said;
“Our philosophy is simple, find a well run club that we believe we can help grow and ask to get involved. We will find the right fit at some point and whilst we do we will continue to build the teams in the other or lower leagues across Europe that we think can feed into a focal point. In sport it’s all about the community. That escape from the day to day. The pride a team gives to the man in the street and the city and how we can have positive influence to give existing fans a voice and to bring new fans along for the ride.”
So sticking with TFT’s links to Football clubs, I asked Simon if he could please enlighten the fans on which clubs TFT are currently working with.
“We have published an update today about Syrianska FC. This is a Swedish football club that we have an agreement to buy 49% of. The other 51% is retained by the existing fan association. This club has fallen on hard times in recent years having enjoyed a meteoric ascent to the very top of Swedish football. We have identified it as a club with a huge fan following and a club that has great facilities and infrastructure that needs help to reorganise and push again for the top of Swedish football. The real coup is we have managed to get the manager Özcan Melkemichel, onboard who took charge of them there before leaving for Djugarden and winning the Swedish FA Cup and the TD Azad Budak. Syrianska wasn’t the only team they had this success with, they also replicated it at Eskiltuna FC. So we know we have the building blocks for an exciting project and the right personnel to go for the top again.
The other deal that is agreed is for an Andorran First Division club which might sound a weird choice at first but it’s an eight team league where the winner qualifies for the Champions League qualification round! Within this we see a fantastic opportunity to develop a u23 team for emerging talent that can feed into our other teams. With the network of agents and football professionals TFT has access to it means that there’s always the opportunity to develop youth and invest in them.
We have had offers from all over the world to get involved with teams, from Indonesia through Israel, all the way through to the USA. There are several other deals being worked on for the future right now, but it takes time to make sure the management and the infrastructure is right with the right people in charge day to day. Syrianska for example has taken over six months of work to bring to fruition. We have looked at and discussed other teams in Europe but these are the teams we will hopefully get the support of the community to make TFT teams.”
With the Interview being very heavily focused on TFT’s links to Football clubs, I felt that it was right to ask Simon about any other Sports that TFT may potentially be interested in getting involved in, or were already involved in.
“We have huge plans to grow into different sports. Basketball is really attractive to us. Rugby is exploding in the States, and Motor Racing seems a great fit too. What we are most keen on is the community pushing us forward with their ideas too. TFT spent some time last Summer with a Pickleball association in Austin Texas and we thought that what they are doing with creating teams is super exciting too. Ultimately if the sports organisation is well run, accessible and we feel we can add benefit we are interested.”
Now that I felt that Simon had cleared everything that TFT is about in terms of what they do, what they want to achieve and many more, the only thing I wanted to ask Simon now was what TFT had to offer for their own fans, members or supporters.
“Our App. We have built out the backend and are working hard to get the front end working. There’s been some hiccups as the blockchains we favour, Iota and Shimmer, have had some delays getting their tech to a point where we can usefully interact with it, but this will be coming soon.”
I asked “what exactly would this app do?”
“The idea behind the app is to create a place where fans can follow the TFT teams and get involved in running them. Also, where any team, whether they may be pro or amateur, can build their own web3 presence. Think of a high school Football team in America maybe using the app to build an NFT yearbook. Or maybe even a team in Africa tokenising to raise funds to buy equipment, fund transport etc.
Alongside this we aim to onboard professional teams so they can get involved in building a web3 community for their fans without having to build their own proprietary output. We think that this approach makes TFT a place for sports fans to congregate and develop relationships across different teams and different sports. The app is the key to growing our audience and will be launched during Q2 2023.
We have looked at bringing content such as fantasy leagues, forums, competitions, news and more to make it somewhere the fans visit regularly and to enable them to be empowered to help its growth.”
After getting so much information from Simon on TheFansTogether, I strongly believe that this interview can really provide everybody with more of a low down on what they really stand for. It is clear that TFT are based on the opportunity to give fans a voice within professional clubs and they have so much potential. Exciting times ahead for TheFansTogether! To learn more follow them at www.twitter.com/thefanstogether
Keane Webster is a lifelong football fan and on a mission to visit all 92 league clubs, come follow his journey sponsored by TFT and read about the fun on the way at:
