American billionaire Todd Boehly and a consortium of investors will officially complete their takeover of Chelsea in a deal worth $5.25 billion (£4.25 billion) on Monday, making it the most expensive team transaction in professional sports.
Chelsea announced on Saturday that “a final and definitive agreement” had been reached to sell the club to Boehly and his Clearlake Capital consortium, meaning the the last hurdle in the long-running saga has been cleared.
The group had earlier received the green light from the Premier League on May 24 and were awaiting approval from the UK government, which has been overseeing the sale due to sanctions on outgoing owner and Russian oligarch Roman Abramovich.
Those sanctions were imposed days after Abramovich decided to put the team up for sale in the wake of Russia’s invasion of Ukraine. Due to his ties with the regime of Russia president Vladimir Putin, as cited by the UK government, his assets were frozen and Chelsea were forced to operate under a restrictive license until a sale materialized.
Chelsea played through that turmoil, advancing to two domestic cup finals after they had already won the FIFA Club World Cup and the UEFA Super Cup. They also finished third in the Premier League.
Now that the ownership situation has been resolved ahead of the May 31 government-imposed sale deadline, Chelsea supporters will be looking forward to a busy summer in the transfer market, in preparation for the new season.
Who owns Chelsea?
The new ownership consortium is led by LA Dodgers part owner Boehly. Although he is the face of the group, it is backed by investment firm Clearlake Capital, and other deep-pocketed partners, including Swiss billionaire Hansjorg Wyss, and Boehly’s Dodgers partner Mark Walter.
Chelsea said in their statement that the deal for Boehly to take over from Abramovich “is expected to be completed on Monday.”
— Chelsea FC (@ChelseaFC) May 28, 2022
Boehly, a 46-year-old American businessman, is worth around $4.5 billion, according to Forbes.
He is heavily involved in U.S. sports, most notably as part-owner of Major League Baseball team LA Dodgers as a member of the ownership consortium Guggenheim Baseball Management. His personal stake in that club is reportedly at 20 percent.
Boehly notably sealed a major deal in 2013, between Time Warner Cable and the Dodgers to create SportsNet LA, a regional network to broadcast all LA Dodgers content.
He also has a minority stake in the legendary NBA basketball team LA Lakers and the Sparks, with his ownership group alongside Mark Walter buying a 27 percent stake in the combined organization.
How much has Todd Boehly paid to buy Chelsea?
According to the numbers shared by the club in a statement published May 6, Boehly’s group is purchasing the club in a deal worth $5.25 billion (£4.25 million), making it the most expensive team transaction in sports history.
A total of $3.1 billion will go toward taking over the shares of the club from Abramovich and the rest will be invested in the club.
According to a May 24 report from Sky Sports, the terms of the deal set for by Abramovich prevents Boehly and his investors from selling shares, or collecting fees or dividends from the club for a decade. There are also limits to the level of debt they can impose upon the club.
Why is Roman Abramovich selling Chelsea?
As a Russian oligarch, Abramovich came under increased government scrutiny following Russia’s invasion of Ukraine and he ultimately decided on March 2 to put Chelsea up for sale with the best interest of the club in mind.
But on March 10, the UK government announced sanctions that essentially put a freeze on Abramovich’s assets, including Chelsea Football Club.
The Premier League side, as long as it was owned by Abramovich, could not generate new streams of income and any revenue scheduled to be received had to be frozen.
That meant that the club could not sell new tickets or merchandise, but existing agreements would continue to be honoured, including for season ticket holders and tickets sold prior to March 10.
The UK government offered a special sporting license in order that Chelsea could continue to operate as a football club despite the sanctions, but it set forth an exhaustive list of restrictions as part of it.
Among those restrictions were a transfer ban, with the club unable to transfer or acquire players. Also, travel expenses for football matches were capped at $26,000 per match.
Will Roman Abramovich profit from Chelsea sale?
No. As part of the UK sanctions leveled against Abramovich, he cannot legally benefit financially from the sale of his asset Chelsea Football Club or any other assets he owns in the U.K.
Abramovich has already confirmed his intention of donating the proceeds of the eventual sale to charity.
Chelsea confirmed that the $3.1 billion would be “deposited into a frozen UK bank account with the intention of donating 100 percent to charitable causes as confirmed by Roman Abramovich.”
There were reports of a disagreement between Abramovich and the UK government on the destination of those funds, with no definitive solution shared publicly. A UK government approval of the sale required these issues to be worked out.
Who is Roman Abramovich?
Born in 1966 in Saratov, Russia, a major port city in the southwestern corner of the country, Abramovich is a Russian billionaire, most well-known for his role as owner of Premier League club Chelsea.
Abramovich gained his wealth through various investments and is known for his ability to buy and sell both businesses and various assets for profit.
The 55-year-old has made friends in high places during his career, most well-known for his friendships with former Russian president Boris Yeltsin and current president Vladimir Putin, though his camp has denied the connections to Putin in the past.
For a time, during Yeltsin’s presidency, Abramovich lived in an apartment inside the Kremlin at Yeltsin’s request. According to Richard Sakwa’s 2019 book The Crisis of Russian Democracy, it was Abramovich who first identified to Yeltsin that Putin should be his successor.
According to Forbes in 2019, Abramovich’s net worth was approximately $12.9 billion, making him the 11th richest person in Russia.
Abramovich has had his fair share of troubles over the years. In 2008, The Times reported that he paid billions of dollars in political bribes and protection fees in return for shares in Russia’s oil and aluminum assets, according to court documents.
He has also had run-ins with the Russian Antimonopoly Service, while his ownership stakes in various businesses in the steel, coal mining, and natural gas industries have seen Abramovich clash with climate change groups.
When did Roman Abramovich buy Chelsea?
Roman Abramovich first took ownership of Chelsea FC in June of 2003. Through a 100 percent ownership stake in U.K.-based holding company Fordstam Limited, Abramovich purchased the club from Ken Bates, who in turn went on to buy Leeds United.
Since his takeover, Chelsea has won 18 trophies, including two Champions League titles, five Premier League championships, and most recently the 2022 FIFA Club World Cup.
Abramovich’s massive investment in the club has built Chelsea into a perennial world power, but it has come at a serious cost to the club. Chelsea is a monstrous $2 billion in debt to Abramovich, according to a report by Front Office Sports, though Abramovich is not seeking to collect.
The Roman Abramovich era at Chelsea
During Abramovich’s reign, Chelsea grew into a perennial European and world power in club football.
Since Abramovich took over the club in 2003, Chelsea finished in the top four of the Premier League table in all but three seasons. In addition, the club collected 18 major trophies during his ownership, including two Champions League titles.
The Russian billionaire was known for his quick trigger finger when it came to managers, with Chelsea sporting 14 different head coaches during his 19 years in charge (including one stint by Rafa Benitez and two by Guus Hiddink with the “interim” label).
The longest tenured manager under Abramovich’s reign was Jose Mourinho, whose three seasons between 2004 and 2007 still represent the longest stretch for any manager with Abramovich as boss.
But after the Russian invasion of Ukraine, Abramovich’s ownership of the club came under fire as the international community attempted to punish Russia for its actions.
Questions regarding the wartime situation and Abramovich’s involvement were beginning to weigh on the club, with Chelsea manager Thomas Tuchel admitting the situation was “distracting” in late February before becoming increasingly frustrated with repeated questions during a press conference in early March.
“STOP asking me these questions. I’m not a politician!” 😳
— Hayters TV (@HaytersTV) March 1, 2022
Abramovich had been reportedly looking to decrease his presence in western Europe before he was ever hit by sanctions, and so the Chelsea owner decided to sell the club “in the best interest of the club, the fans, the employees, as well as the club’s sponsors and partners.”
He initially attempted to distance the club from his issues in late February when he announced he would hand “custody and care” of the club over to the Chelsea Foundation’s trustees, but the brief and vague statement only raised more questions than it answered. And the trustees were not necessarily willing to take on that responsibility.
Just days later, on March 2, he announced he was selling, and despite the hefty price tag, there were plenty of willing bidders who were asked to submit their offers in short order as part of a sales process managed by Raine Group on behalf of Abramovich.
According to the most recent Forbes valuation, Chelsea was worth $3.2 billion in 2021, up from $760 million back in 2012.