Two bids backed by US billionaires have become the frontrunners to win the £3billion race to buy Chelsea Football Club, which is rushing to replace its Russian oligarch owner Roman Abramovich, who is hit by sanctions .
The preferred bids come from an investor group led by Todd Boehly, the financier and owner of baseball’s Los Angeles Dodgers, and another led by Josh Harris and David Blitzer, the private equity billionaires who own sports teams like the Philadelphia Owning 76ers in basketball, according to people in the know.
On Thursday, other bidders, including Saudi Media Group, were informed they had been dropped from the process, they said.
The unique circumstances surrounding the sale of Chelsea have sparked a great deal of interest in a rare trophy value in football’s most lucrative domestic league, the Premier League. Based in west London, England, the auction process for the club is managed by US merchant bank Raine Group.
Bids will be evaluated on the basis of a complicated set of criteria, including how much of the bid will be donated to charity and how much money is available for investment in Chelsea and its stadium, those familiar with the matter have said. Bidders’ track records in managing high quality assets will also be assessed.
The front-runners of the competition tried to differentiate their offerings not only by price, but also by working with members of the British establishment.
Boehly’s group has the support of Daniel Finkelstein, a fellow Conservative party and columnist for The Times newspaper in London, while Harris and Blitzer have reached out to city grandee Sir Martin Broughton and Sebastian Coe, President of World Athletics.
California-based investment firm Clearlake Capital, which has more than $60 billion in assets under management, is providing financial backing for Boehly’s bid. The Boehly Group works with Goldman Sachs.
Saudi Media Group’s bid was uncompetitive and relied heavily on debt financing, an unattractive prospect for the club, a person with knowledge of the situation said.
The offers of the British real estate developer Nick Candy, who worked on behalf of a consortium of investors, and the London investment manager Centricus are not expected either.
An offer from the Ricketts family, who own the Chicago Cubs baseball team, was tempered by a re-examination of leaked correspondence in which the family’s patriarch wrote that Muslims were the “enemy.” Ricketts’ bid is backed by US hedge fund billionaire Ken Griffin.
The Ricketts family has stressed that “racism and Islamophobia have no place in our society” after Chelsea fans slammed broker TD Ameritrade founder Joe Ricketts for comments in the leaked emails.
Chelsea have won every major honor in football under Roman Abramovich © AP
The keen interest in Chelsea underscores the growth of the Premier League, Europe’s top football league by revenue and global reach, in America, where the value of its broadcasting rights has skyrocketed in the most recent tender.
Chelsea have won all the great glory of football under Abramovich, who bought the club in 2003 and broke Manchester United’s domestic dominance by spending millions buying star players and paying their multi-million dollar salaries.
The club won the Uefa Champions League, the most prestigious club tournament in Europe, and the Fifa Club World Cup last season.
Abramovich is selling the club in the wake of Vladimir Putin’s invasion of Ukraine, which has forced the sports industry to grapple with its ties with Russia and oligarchs accused of being close to the Kremlin.
However, the UK’s decision to impose sanctions on Abramovich and freeze his assets has made the sale more complicated, requiring special UK government approval.
Ministers insist Abramovich, who has pledged to donate the net proceeds from each sale to charity, must not benefit from the transaction. He has also said he plans to forgive the £1.5billion debt owed to him by Fordstam, the company through which he owns Chelsea.
Chelsea’s revenues for the year to June 2021 totaled £434m, up from £407m the year before, bolstered by their Champions League win.
Despite the sanctions, a license granted to the club allows Chelsea to play games to prevent a wider disruption to the Premier League, one of Britain’s biggest cultural exports.
The government on Wednesday changed Chelsea’s license to allow Abramovich’s Fordstam entity to inject up to £30million into the club to ‘solve any cash flow or liquidity issues’.
If their bidding group is successful, Harris and Blitzer will likely be forced to sell their minority stake in Crystal Palace, a rival Premier League club based in south London.
Additional reporting by Antoine Gara