LONDON – The British government came close on Tuesday to give its blessing to the purchase of Chelsea FC, one of the blue-ribbon European football teams, by a US-led investment group after deciding that it had enough guarantees that none of the record revenue. the sale price ($ 3.1 billion) would flow to the Russian club owner.
The government’s pending approval, which was expected as early as Wednesday, signaled the end of not only the most expensive deal in the history of the sport, but also possibly the most full, cryptic and political one.
In the three months since Chelsea’s owner-occupied Russian oligarch Roman Abramovich put his team on the market, the club’s fate has been at stake not only in the fields of some of the richest competitions in world football, but in the corridors of power in Westminster and the tall towers of Wall Street. And all this against the backdrop of the crippling financial sanctions imposed after Russia’s invasion of Ukraine.
The road to an agreement has entangled an unlikely cast of characters: private equity funds and anonymous offshore trusts; legislators in Britain and Portugal; an octogenarian Swiss billionaire and American tennis star Serena Williams; an enigmatic Russian oligarch and a little-known Portuguese rabbi, and featured a contested passport, wartime peace talks, and even reports of an attempted poisoning.
Its end leaves as many questions as answers. All that can be said for sure is that a group led by Los Angeles Dodgers co-owner Todd Boehly and largely funded by private equity firm Clearlake will now control Chelsea, a six-time English and two-time European champion. , and Abramovich. he won’t.
Abramovich first indicated his intention to sell Chelsea – the most prominent of its assets by some distance – almost as soon as the Russian army crossed into Ukraine in late February, and only a week before Britain and the European Union would identify it as key. ally of President Vladimir V. Putin of Russia and froze his assets.
Completing an agreement, however, has been devilishly complicated. The final hurdle to a sale was resolved only this week, when British lawmakers were satisfied enough that a $ 2 billion loan to an offshore trust, believed to be controlled by Abramovich, had been approved. British government officials tried to reassure their counterparts in Portugal, which in 2018 had granted Abramovich a Portuguese passport with the help of a rabbi, and the European Union, which had imposed its own sanctions on Abramovich in March. Both must also approve the sale due to their Portuguese nationality.
But the loan was not the only complication facing Raine, the New York-based investment bank hired by Abramovich to handle the sale. The agreement with Boehly’s group came with a network of conditions, some set by the British government, others by Raine and others by Abramovich himself, all striking in the context of the sale of sports equipment.
The four possible suitors identified by Raine as serious contenders: Boehly’s group; a one led by British businessman Martin Broughton that included Williams and Formula One driver Lewis Hamilton among his partners; another funded by Steve Pagliuca, the owner of the Boston Celtics in the NBA; and one of the Ricketts family, which controls the Chicago Cubs baseball, was asked not only to pay a staggering price for the team, but also to commit to a number of promises, including up to 2,000. millions of dollars more in investments in Chelsea.
Club suitors were told, for example, that they could not sell their stake during the first decade of ownership and that they had to allocate $ 125 million to the club’s women’s team; invest millions more in the club’s academy and training facilities; and commit to rebuilding Stamford Bridge, Chelsea’s aging West London stadium.
At the same time, Abramovich insisted that all proceeds from the sale would go to a new charity to benefit the victims of the war in Ukraine. To ensure that it does not gain control of this money, the British government will require that it first be placed in a frozen bank account that it controls. Only then will he review all plans for the fund being developed by Mike Penrose, former head of a branch of the United Nations Children’s Charity UNICEF, and issue a special license that will allow the charity to take control of background.
The charity was just one of the peculiarities of the deal arranged by Joe Ravitch, the co-founder of Raine who led the sale.
New owners will also not be allowed to collect dividends or management fees or charge the team with debts, terms that bankers related to the sale have described as “anti-Glazer clauses”, a reference to the unpopular Manchester United owners who took control. of the club in a leveraged purchase in 2005.
Several people close to the trial said Boehly’s bid was eventually selected from the group of wealthy suitors because of his willingness to comply with the clauses. (At least one of these people, who worked on the offer backed by Pagliuca, said his group withdrew from the call due to the nature of the conditions).
The Premier League has already signed the sale of Chelsea, announcing on Tuesday that it had reviewed and approved the new owners “subject to the government issuing the required sales license and the successful completion of the final stages of the transaction”.
It is unknown at this time what he will do after leaving the post. Any oversight role will fall to the charity, the only external entity still inextricably linked to Chelsea and Abramovich, or the continued influence of two key lieutenants of Abramovich who hope to remain in office under the new owners.
Both executives, club president Bruce Buck, and Marina Granovskaya, a Russian-born businesswoman who went from being Abramovich’s personal assistant to the highest official answer for football trades at Chelsea, will win about 12 , $ 5 million for his work on the sale. Management fees totaling $ 50 million, and the fee to Ravitch, which is believed to be between 0.5 and 1 percent of the value of the deal, will be paid with the balance sheet. club and not with sales funds, according to one person. familiar with the structure of the agreement.
British government officials had clashed with Chelsea executives and financiers to create a legally binding resolution to prevent Abramovich from gaining access to the money he publicly said he was willing to give up.
It was a company called Camberley International Investments, run by a Cypriot trustee on behalf of what British officials believe was Abramovich and his sons. Camberley lent $ 2 billion to Fordstam, the company through which Abramovich controlled Chelsea, to finance its expenses and operations. Camberley’s claim against Fordstam has now been resolved and his trustee has recently resigned.
It was only then, with a deadline of 31 May for the completion of the sale, that the British government moved to approve the deal.
For Chelsea fans, the sale puts an end to a season that sometimes blurred into the absurd. The sanctions imposed on Abramovich – and, by extension, Chelsea – affected everything from team travel to the printing and sale of game programs. Thousands of empty seats splashed Stamford Bridge during the final months of the season following the ban on new tickets, and the agitation of the list was seen due to a moratorium on signing and selling of players.
He will now stand up as Chelsea players and coach Thomas Tuchel urgently ask Boehly and his group for clarity on their plans. At least two key defenders are scheduled to leave Chelsea this summer, and at least two more players, including club captain Cesar Azpilicueta, are expected to follow.
Boehly, a regular presence at Chelsea’s games since his inauguration was announced on May 6, has said broadly that he would like to keep Chelsea as a major force in football. However, a group largely backed by a privately held company is unlikely to be as lenient as Abramovich was as owner.
In almost two decades at Chelsea, Abramovich was a familiar but almost silent presence at Stamford Bridge, happy to let his money speak for itself. Under his leadership, Chelsea became a true European superpower, winning five Premier League titles and two Champions League crowns through the work of a succession of A-list executives and investing billions. dollars in players.
His generosity changed Chelsea, but so did football as a whole, ushering in an era of unlimited spending that saw transfer quotas and player salaries rise to levels unthinkable just a few years earlier. It also had a price that Chelsea’s income, no matter how much it grew in those years of abundance, could not match. During his tenure, Abramovich used his great personal fortune to subsidize losses amounting to $ 1 million a week.
However, just as Abramovich’s arrival in 2003 opened the door to a new era for English football, his departure also serves as a point of interest.
While scarcity may explain some of the rush to pay a premium for Chelsea (after all, the biggest football teams rarely go on sale), it’s unclear when, or how, a group of private equity investors who sailed through such treacherous and confusing waters. gaining control of the club can start to get a return on your investment.