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Endgame nears in bidding for Chelsea FC

English football’s biggest soap opera — the bidding war to own Chelsea FC — appears to be entering its endgame.

soccer, chelsea FC, Chelsea FC, commercial director Damian Willoughby', chelsea sack commercial directoWilloughby began working at Chelsea earlier this month following the club's takeover. (Twitter)

By Tariq Panja

The Raine Group, the New York merchant bank appointed 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 poised to name its preferred bidder as soon as this week. It will choose one of three groups backed by American investors, each of which has put forth a multibillion-dollar offer.

In picking a winner, the Chelsea board, Abramovich and Raine will inch closer to bringing an end to one of the strangest, and richest, takeovers in modern sports history: a beauty pageant that brought together European soccer and American money; Chelsea legends and foreign poseurs; all part of a galaxy of individuals and groups with designs on a team that Abramovich’s billions have turned into a sporting powerhouse during his nearly two-decade reign.

The sale, whenever a deal is finally closed, should yield the highest amount ever paid for a sports team, with estimates suggesting a price tag of about $3 billion. Abramovich is currently not allowed to receive any of the proceeds.

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One of the early front-runners in the race, a group led by Todd Boehly, a billionaire investor and a part-owner of the Los Angeles Dodgers, remains well placed to prevail. But Boehly and his partners are being challenged by a sprawling consortium bankrolled by Josh Harris and David Blitzer, members of the ownership group that controls the Philadelphia 76ers of the NBA, who this week added Formula One driver Lewis Hamilton and tennis star Serena Williams to their ranks.

The Ricketts family went public with its interest in the buyout with Chelsea owner Roman Abramovich forced to sell up after he was sanctioned by the British 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, the chairman of Maple Leaf Sports & Entertainment, which owns the NBA’s Toronto Raptors, hockey’s Toronto Maple Leafs, and Major League Soccer’s Toronto FC.

Representatives of all three consortiums, as well as a group of bankers from Raine led by one of the firm’s founders, Joe Ravitch, were summoned to London this week, where each group was to make a final pitch.

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The surviving bidders navigated a path now littered with failed suitors, some to be taken seriously and others definitely not. A bid by the Ricketts family that owns the Chicago Cubs, for example, had deep pockets but was torpedoed after anti-Muslim emails sent by the family patriarch Joe Ricketts — first reported in 2019 — resurfaced.

MMA champion Conor McGregor offered 1.5 billion pounds (about $1.8 billion) for Chelsea on Twitter, then later deleted the post and, presumably, the offer. A mysterious Turkish businessman who claimed to have spoken with Abramovich’s lawyers about a price, and who boasted that “we will fly the Turkish flag in London soon,” later missed the deadline for bids. He claimed his lawyers had sent his offer to the wrong email address.

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

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The uncertainty over the future has affected the team on the field, too. Chelsea expects to lose two key defenders, Antonio Rüdiger and Andreas Christensen when their contracts expire at the end of the season. Any talks with potential replacements cannot take place until a new owner replaces Abramovich.

Chelsea has won 21 trophies in 19 years of Abramovich’s ownership, relying on his lavish investment to become one of Europe’s most successful clubs. (FILE)

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

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

The prospective new owners then would have to be vetted and approved by the Premier League. That 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 team.

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

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As deadlines for final offers were extended once, and then again, the process became subject to numerous leaks in the news media, leading some bidders to privately express frustration and make claims of unequal treatment. Raine has not commented on the process beyond an interview with the Financial Times in which Ravitch made a startling, and unsupported, claim about Chelsea’s value.

“My guess is that Chelsea and all of the top Premier League clubs will probably be worth in excess of $10 billion in five years,” he said, in what was seen as a bid to drive the sales price even higher. “So I think whoever buys Chelsea today at the prices we’re talking about is getting it for a steal.”

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Chelsea’s record of success under Abramovich — five Premier League titles and two Champions League crowns — has not come cheaply; his outlay in pursuit of those honors has cost him nearly $2 billion from his personal fortune.

First published on: 28-04-2022 at 10:24 IST
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  • British government Chelsea FC Merchant bankers Premier league Roman Abramovich
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