Friday is the deadline for bids to buy sanctioned Russian oligarch Roman Abramovich’s Chelsea FC. With a reported 200 inquiries made about the sale, all eyes are fixed on who among the billionaire class will walk away with one of global soccer’s most-coveted trophy assets.
The urgency of getting a deal done cannot be overstated. Abramovich announced his intent to sell the team six days after the Russian invasion of Ukraine. Eight days later he was placed under economic sanctions aimed at crippling the war effort by targeting Russia’s political and military leadership, as well as its most wealthy global citizens.
That left the Premier League’s fourth most valuable franchise–a money-losing enterprise valued at $3.2 billion–with just a few weeks of operating cash and Abramovich dependent on the U.K. government to issue a license to complete the sale. According to an administrator at the department for digital, culture, media & sport, which is directing the sale, there are not enough resources to vet more than one bidder or consortium. To save both the government and Premier League time and money, Chelsea will need to forward a single preferred bidder to get a deal done. Now Chelsea’s New York bankers, The Raine Group, has essentially one shot to pick a winner, putting wealthy bidders from the U.S. at the front of the pack.
“What the Premier League [doesn’t] want to do is to investigate 20 people,” says Kieran Maguire, a soccer finance lecturer at the University of Liverpool. “That means they need to employ 20 sets of lawyers and accountants to do the background checks. The advantage where some of these U.S. franchises come to the fore is because they’ve done it before, they know what has to be done.”
Among the leading U.S. bidders are Los Angeles Lakers and Dodgers part-owner Todd Boehly, who’s partnering with Swiss billionaire Hansjörg Wyss, as well as New York Jets owner and former U.S. ambassador to the U.K. Woody Johnson, and the Ricketts family, owners of the Chicago Cubs.
Abramovich, who has a net worth of roughly $7 billion, down from nearly $15 billion before the invasion (though he likely has limited access to even that right now), bought Chelsea for $190 million in 2003 and has been paying into it ever since, loaning the club a sum totaling some $2 billion. According to its latest annual report, which covers the fiscal year ending in June 2021, Chelsea lost $190 million and said it had a paltry cash pile of $21 million.
Now, with Abramovich under government scrutiny, Chelsea has been forced into a panic-sale, unable to sell merchandise, tickets, renegotiate contracts or acquire any new players in the meantime. Among its mounting expenses is the club’s monthly wage bill, a $36 million sum that funds the star-studded roster occupying Stamford Bridge.
That means speed is of the essence with a burden on the sellers to set realistic deal terms and to choose a credible buyer. Once that is done, the application for a license to conduct the sale will then go for approval from the U.K. Treasury department, which will oversee the transfer of ownership.
A sovereign wealth group might be willing to pay a higher price than a buyer from the U.S., but that would be a gamble, according to Marc Ganis, president of the consulting firm Sportscorp, who notes that the political sensitivity of the situation is unparalleled, making it a tough environment for approval. The Ricketts family has owned the Cubs for more than a decade. Boehly has the blessing of both MLB and the NBA. Johnson not only has approval from the NFL, the “gold standard” of sports leagues, but was also an ambassador. When Fenway Sports Group, owners of the Boston Red Sox, purchased Liverpool in 2010, it rescued the club from mounting debts and is now worth $4.1 billion today.
“The key here is that they are a known, vetted quantity,” says Ganis. “You may have other people from other parts of the world that require more vetting.”
That doesn’t necessarily preclude a local owner from prevailing, most notably, U.K. property developer and multi-millionaire Nick Candy. But the odds are long, even for the biggest club in London’s most prestigious postcode.
After bids are finalized tomorrow, a potential deal could come together quickly, with one government source telling Forbes that a license can be issued in a matter of days. Premier League chief executive Richard Masters has publicly said the fastest sale done was in about 10 days, though the process usually takes a number of weeks. And this sale has the attention of the highest levels of the U.K. government, which has been repeating the line that Prime Minister Boris Johnson and the senior figures in the U.K. government are “open to any sale happening” as long as the British public is satisfied and Abramovich doesn’t get a dime.
“If you’ve got a willing seller, a willing buyer, an army of accountants, investment bankers and lawyers—a deal can be done,” Maguire says.