Chelsea Concludes a $5.2 Billion Sale to a Consortium Led by DraftKings Investor Todd Boehly
Chelsea FC has agreed to be sold to a group of investors led by US billionaire Todd Boehly, co-owner of the LA Dodgers and LA Lakers, for $5.2 billion.
Boehly is also a substantial DraftKings investor. And in 2021, he led efforts to take the sports betting and data business Sportradar public through a combination with his special acquisition company (SPAC), Horizon II. That transaction did not occur. However, Boehly made substantial investments in Sportradar when the business opted for a regular IPO later that year.
Boehly's media and entertainment assets include A24, a film production firm, and Penske Media, which owns Rolling Stone and Variety.
Clearlake Capital, a California private equity group, would possess the bulk of the club's shares, while Boehly would manage the consortium.
The sale of Chelsea for $5,2 billion is one of the largest transactions in the history of sports. However, the present owner of the franchise, the infamous Russian businessman Roman Abramovich, will not earn a single cent.
Shortly following the invasion of Ukraine, the British government froze Abramovich's assets, which included Chelsea. In anticipation of the move, the millionaire with ties to the Kremlin had already placed Chelsea on the market. However, financial restrictions prevent him from profiting from the transaction.
The group has committed to pay £2.5 billion (US$3 billion) for the club's shares and to invest a further £1.75 billion (US$2.1 billion) on the stadium, youth academy, women's squad, and Chelsea foundation.
All earnings from the selling of shares will be deposited into a bank account under the authority of the British government and donated to charity.
As a result of sanctions, Chelsea cannot sign players, extend contracts, sell match tickets or merchandise until the sale is finalised.
Race Against Time
The transaction is anticipated to close this month, and it must. As a frozen asset, Chelsea operates on a special licence that expires on May 31 from the UK government.
The English Premier League will form the new league for the 2022/23 season on June 8. If Chelsea does not obtain a licence at this time, there is a risk that they may be expelled from the league. This would be a remarkable occurrence for the reigning European champion and one of the world's most elite soccer clubs.
EP approval of the deal is contingent to the consortium passing its owners' and directors' test. However, the threshold is rather low given that the league just authorised the sale of Newcastle United to a group backed by Saudi Arabia's national investment fund.
The Saudi government has been criticised for human rights breaches, suspected support of Islamic terrorism, and the murder of dissidents on foreign soil, notably Jamal Khashoggi, a journalist for the Washington Post.
By fLEXI tEAM