LONDON – The British government on Wednesday gave its blessing to the purchase of Chelsea, one of the European football teams with blue ribbons, from an American-led investment group, after deciding that there are enough guarantees that none of the revenue from the record sale price – 3 , $ 1 billion – will flow to the Russian owner of the club.
The government’s approval signals the end of not only the most expensive deal in the history of the sport, but also probably the most tense, mysterious and political.
In the three months since Chelsea-owned Russian oligarch Roman Abramovich hastily launched his team, the club’s fate has been played out not only on the fields of some of the world’s richest competitions, but also in the corridors of power in Westminster and the towering towers of Wall Street. And all this against the background of the crippling financial sanctions imposed after Russia’s invasion of Ukraine.
“We are now pleased that the full proceeds from the sale will not benefit Roman Abramovich or another sanctioned person,” a government statement said.
The road to a deal has confused only a likely lineup of private investment funds and anonymous offshore trusts; legislators in the UK and Portugal; eighty-year-old Swiss billionaire and American tennis star Serena Williams; an enigmatic Russian oligarch and little-known Portuguese rabbi – and included a contested passport, peace talks during the war, and even reports of attempted poisoning.
The 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 Bowley and largely funded by private investment firm Clearlake will now control Chelsea, a six-time English and two-time European champion, and Abramovich will not. Yes.
Abramovich first indicated his intention to sell Chelsea – the most famous of his assets by some distance – almost as soon as the Russian army crossed into Ukraine in late February and just a week before Britain and the European Union named him a key ally of the president. Vladimir Putin to Russia and froze his assets.
However, the deal turned out to be hellishly confusing. The latest obstacle to the sale was resolved only this week, when British lawmakers were happy enough that a $ 2 billion loan owed to an offshore trust believed to be controlled by Abramovich had been cleared. British government officials then tried to reassure their counterparts in Portugal, which had given Abramovich a Portuguese passport with the help of a rabbi in 2018, and the European Union, which imposed sanctions on Abramovich in March. Both must approve the sale because of his Portuguese citizenship.
But the loan was not the only complication facing the Rhine, a New York-based investment bank hired by Abramovich to handle the sale. The agreement with Boelli’s group came with a network of conditions, some from the British government, others from the Rhine and others from Abramovich himself, all of which were striking in the context of the sale of a sports team.
All four future suitors identified by the Rhine as serious contenders – Boeli’s group; one led by British businessman Martin Broughton, which included Williams and Formula One driver Lewis Hamilton among his partners; another, funded by Steve Palyuka, owner of the NBA’s Boston Celtics; and one of the Ricketts, who control the Chicago Cubs baseball, have been asked not only to pay a staggering price for the team, but also to make a number of promises, including another $ 2 billion in investment at Chelsea.
The club’s suitors were told, for example, that they could not sell their shares within the first decade of ownership and that they had to set aside $ 125 million for the club’s women’s team; invests millions more in the club’s academy and training facilities; and are committed to rebuilding Stamford Bridge, Chelsea’s obsolete West London stadium.
At the same time, Abramovich insisted that all proceeds from the sale would go to a new charity for the victims of the war in Ukraine. To ensure that he does not gain control of this money, the British government will require that it be first placed in a frozen bank account, which he controls. Only then will she review all plans for the fund, prepared by Mike Penrose, a former head of a branch of the UN charity UNICEF, and issue a special license that will allow the charity to take control of the funds.
“We will now begin the process to ensure that the proceeds from the sale are used for humanitarian causes in Ukraine, in support of the victims of the war,” the government said in a statement.
Charity was just one of the features of the deal, organized by Joe Ravich, the co-founder of the Rhine who led the sale.
The new owners will also not be allowed to take dividends or management fees or burden the team with debts – conditions that bankers linked to the sale describe as “anti-Glaser clauses”, a reference to the unpopular owners of Manchester United who took control of the club when buying with leverage in 2005
Several people close to the trial said Boehly’s offer was ultimately chosen by a group of wealthy suitors because of his willingness to abide by the clauses. (At least one of those people who worked on the offer, backed by Palyuka, said their group withdrew due to the nature of the conditions.)
The Premier League has already signed the sale of Chelsea, announcing on Tuesday that it has checked and approved the new owners “subject to the government’s issuance of the necessary sales license and satisfactory completion of the final stages of the deal.”
However, it is unclear what will happen if Boelli and his partners choose to give up any of the conditions after they have control of the club. Any oversight role will fall on the charity, the only outside organization that is still inextricably linked to both Chelsea and Abramovich, or the continued influence of two key Abramovich lieutenants who hope to remain in their positions with the new owners.
Both executives – club president Bruce Buck and Marina Granovskaya, a Russian-born businesswoman who rose from Abramovich’s personal assistant to Chelsea’s highest-ranking official answer to football deals – will earn about $ 12.5 million for their work. sale. Management’s commissions totaling $ 50 million and Ravich’s fee, which is estimated to be between 0.5 and 1% of the value of the deal, will be paid from the club’s balance sheet and not from the proceeds, according to someone familiar with the structure of the deal.
British government officials have clashed with Chelsea’s executives and financiers to come up with a legally binding resolution to prevent Abramovich from gaining access to the money he has so publicly said he is ready to give up.
It is a company called Camberley International Investments, run by a Cypriot trustee on behalf of what British authorities believe is Abramovich and his children. Camberley donated $ 2 billion to Fordstam, the company through which Abramovich controlled Chelsea to fund his expenses and operations. Camberley’s lawsuit against Fordstam has now been resolved and his trustee recently resigned.
It was only at this point, with the approach of May 31 to complete the sale, that the British government decided to approve the deal.
For Chelsea fans, the sale puts an end to a season that at times faded to absurdity. The sanctions imposed on Abramovich – and hence on Chelsea – affected everything from the team’s travels to the printing and sale of game programs. Thousands of vacancies filled Stamford Bridge during matches in the final months of the season following a ban on new ticket sales, and turmoil in the squad was marked by a moratorium on signing and selling players.
This will now be overturned, with players and Chelsea manager Thomas Tuchel urgently seeking clarification from Boelli and his group on their plans. At least two key defenders are expected to leave Chelsea this summer, and at least two more players – including club captain Cesar Aspilicueta – are expected to follow.
Boehly, who has been a regular at the Chelsea Games since his announcement on May 6, has generally said he would like to keep Chelsea as a major player in football. However, a group largely backed by a private investment company is unlikely to be as lenient as Abramovich was as owner.
For almost two decades, Chelsea Abramovich had a familiar but almost silent presence at Stamford Bridge, happy to allow his money to speak. Under his leadership, Chelsea became a true European superpower, winning five Premier League titles and two Champions League crowns, appointing a series of A-list managers and investing billions of dollars in players.
His generosity changed Chelsea, but also football in general, ushering in an era of unlimited spending, with transfer fees and player salaries rising to levels unthinkable just a few years earlier. This also came at a price that Chelsea’s income, no matter how much it grew during those years of abundance, could not match. Throughout his term, Abramovich used his vast personal fortune to subsidize losses of up to $ 1 million a week.
Yet just as Abramovich’s arrival in 2003 opened the door to a new era in English football, his departure also serves as a milestone.
Although the shortage may explain part of the rush to pay a bonus to Chelsea – after all, the biggest football teams are rarely sold – it is unclear when and how a group of private investors moving into such insidious, confusing leads to gain control of the club, can begin to realize a return on investment.
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