Clearlake Capitals and a group led by Todd Boehly, former President of Guggenheim Partners, have agreed to buy from Roman Abramovich the Chelsea Football Club for $5.25 billion (4.25 billion pounds). The move deepens the involvement of U.S. investments in the English Premier League and ends Abramovich’s long association with the London team.
What is this all about?
The process for managing the sale of one of the most popular names in world soccer sports was conducted by the Raine Group of New York. The bidders were from worldwide, including Saudi Arabia and Turkey. U.S. financiers largely backed the four front-running bidders. Chelsea is now the 10th team in the Premier League to be partly or wholly backed by investment from the U.S.
Chelsea, which Abramovich bankrolled since 2003, became one of the top clubs in Europe, winning more than 20 plus trophies, including last year’s title in European Champions League.
It isn’t cheap to build a champion squad. The Chelsea acquisition costs included 2.5 billion pounds of share purchase and another 1.75 billion pounds towards additional investments for the club’s benefit. Despite Chelsea’s on-field success, the Club lost $1.2 million every week, as per Kieran Maguire, a football finance lecturer at Liverpool University.
The sale transaction is still pending approval from the British government after sanctioning Abramovich, a Russian billionaire, following Russia’s Ukraine invasion. The consortium members led by Boehly must also qualify for the Premier League rules for directors and owners.
The sales proceeds will be kept in freeze U.K. bank account; the idea is to donate 100% towards charity, as confirmed by Abramovich. Chelsea, in a statement, said that government approval would be required to transfer the proceeds from the Bank account.
The 1.75 billion pounds invested by the Boehly’s group will be utilized for the women’s team, the academy for youth player development, the Kingsmeadow and Stanford Bridge, and the Chelsea Foundation.
The group buying the Club includes Mark Walter, CEO of Guggenheim Partners, and Swiss Businessman Hansjoerg Wyss, as per Bloomberg News. According to a person familiar with the development, Clearlake Capital will have a stak e of around 61% in the Club.
Walter and Boehly are co-owners of the Major League Baseball Team Los Angeles Dodgers. The new group has not revealed the members and their shareholdings.
British Billionaire Jim Ratcliffe entered the fray late with a bid worth 4.25 billion pounds but was rejected outright by the Raine Group. The first football team in the English Premier league to get American investment was Manchester United in 2003, when the Glazer family acquired a 2.9 % stake. They later bought out the entire Club for more than 700 million pounds, according to CIES Sports Intelligence.
The deal of Chelsea by Boehly marks a busy period for U.S. investors getting drawn to European Football.
