Endgame nears auction for Chelsea FC

The Raine Group, the New York merchant bank slated to sell the Premier League soccer club on behalf of Roman Abramovich, a Russian oligarch whose assets have been frozen by the British government, is set to name its preferred bidder from this week. He will choose one of three groups backed by American investors, each of which has presented a multibillion-dollar bid.

By picking a winner, the Chelsea board, Abramovich and Raine will be one step closer to ending one of the weirdest and richest takeovers in modern sports history: a beauty contest that has united European football and American money; Chelsea legends and foreign posers; all part of a galaxy of individuals and groups with designs on a team that Abramovich’s billions turned into a sports powerhouse during his nearly two-decade reign.

The sale, whenever a deal is finally made, is expected to yield the highest amount ever paid for a sports team, with estimates suggesting a price tag of around $3 billion. Abramovich is currently not eligible to receive profits.

An early favorite in the race, a group led by Todd Boehly, a billionaire investor and co-owner of the Los Angeles Dodgers, remains well positioned to win. But Boehly and his partners are being challenged by a sprawling consortium funded by Josh Harris and David Blitzer, members of the ownership group that controls the NBA’s Philadelphia 76ers, who this week added Formula 1 driver Lewis Hamilton and star of tennis Serena Williams to their ranks.

The Ricketts family have made their interest in the takeover public, with Chelsea owner Roman Abramovich being forced to sell after being sanctioned by the UK government. (AP Photo/Martin Meissner, File)

The third finalist is led by Steve Pagliuca, co-owner of the NBA’s Boston Celtics, and includes Larry Tenenbaum, president of Maple Leaf Sports & Entertainment, which owns the NBA’s Toronto Raptors, hockey’s Toronto Maple Leafs and the Toronto FC of Major League Soccer. .

Representatives of the three consortia, along with a group of Raine bankers led by one of the company’s founders, Joe Ravitch, were summoned to London this week, where each group was to make a final pitch.

The surviving bidders navigated a path now littered with failed contenders, some to be taken seriously and some certainly not. An offer from the Ricketts family, owners of the Chicago Cubs, for example, had deep pockets but was torpedoed after anti-Muslim emails sent by family patriarch Joe Ricketts – first reported in 2019 – resurfaced. surface.

MMA champ Conor McGregor offered £1.5 billion (about $1.8 billion) to Chelsea on Twitter, then later deleted the post and, presumably, the offer. A mysterious Turkish businessman who claimed to have discussed a price with Abramovich’s lawyers and boasted that ‘we will soon be flying the Turkish flag in London’ later missed the bid deadline . He claimed his lawyers sent his offer to the wrong email address.

For the players, staff and fans of Chelsea, a decision cannot come soon enough. The club has been working under very unusual financial constraints since the announcement of sanctions against Abramovich, an ally of Russian President Vladimir Putin. A special government license that allows the team to operate has left the club with up to 10,000 unsold tickets for its home games and forced the team to limit travel budgets and close the team store .

Uncertainty about the future has also affected the team on the pitch. Chelsea expect to lose two key defenders, Antonio Rüdiger and Andreas Christensen when their contracts expire at the end of the season. No discussions with potential replacements can take place until a new owner replaces Abramovich.

Chelsea F.C. Chelsea have won 21 trophies in Abramovich’s 19 years of ownership, building on his lavish investment to become one of Europe’s most successful clubs. (CASE)

“It would be ideal” for the situation to be resolved as soon as possible, Chelsea manager Thomas Tuchel said on Sunday after a victory over West Ham. “But you can’t pull the grass, so it grows faster.”

The unique nature of the sale, however, means that whichever group is granted preferred bidder status, they will only have cleared the first hurdle. The British government must approve the sale for it to go through, and it will insist on strict rules to ensure that none of the profits go to Abramovich. He said any money owed to him would be donated to a new charitable foundation “for all victims of the war in Ukraine”, but the charity’s plans remain vague.

Potential new owners would then need to be vetted and approved by the Premier League. This could raise a thorny complication for Harris and Blitzer: they own Chelsea’s London rival Crystal Palace and would therefore have to divest their stakes before taking control of another Premier League side.

Pagliuca, meanwhile, has an investment in Italy’s Atalanta, a team that has played alongside Chelsea in the Champions League in recent years.

As deadlines for final bids were extended once and then again, the process was widely leaked to the media, leading some bidders to privately express their frustration and claim unequal treatment. Raine has not commented on the process beyond an interview with the Financial Times in which Ravitch made a startling and unsubstantiated claim about Chelsea’s value.

“I guess Chelsea and all the top clubs in the Premier League will probably be worth over $10 billion in five years,” he said, in what was seen as an attempt to raise the asking price even further. “So I think anyone who buys Chelsea today at the prices we’re talking about is getting it for a steal.”

Chelsea’s record of success under Abramovich – five Premier League titles and two Champions League crowns – hasn’t come cheap; his spending in pursuit of those honors cost him nearly $2 billion of his personal fortune.

Laura J. Boyer