English soccer’s top-tier Premier League has provided the approval needed for the £4.25-billion ($5.3 billion) sale of heavyweight club Chelsea to US billionaire Todd Boehly to go through.
The league said yesterday (May 24) that the consortium led by Boehly, who is the co-owner of MLB baseball side LA Dodgers in the US, has now passed the Premier League’s required owners’ and directors’ test.
Chelsea were first put up for sale in early March by owner Roman Abramovich, before the Russian oligarch was sanctioned by the UK government over links to the country’s president Vladimir Putin in the wake of Russia’s invasion of Ukraine.
The sanctions meant the government was required to issue a special license permitting the sale of Chelsea, which also took place last night.
Since the sanctions were issued, the club and US investment firm Raine Group have been handling the sales process, with Boehly’s consortium being named as the preferred bidder on April 30 ahead of several other interested parties, including one led by petrochemicals billionaire Sir Jim Ratcliffe and a consortium headed up by former British Airways chair Sir Martin Broughton.
Boehly and his associates concluded a deal with the club itself on May 6, and since then have been waiting for clearance from the relevant authorities.
The sale terms have finally been agreed upon after the government declared itself “satisfied that the full proceeds of the sale will not benefit Roman Abramovich or any other sanctioned individual” – a requirement separate from the aforementioned owners’ and directors’ tests for Boehly and the other investors in his group.
The sale has taken place on a strict time schedule, with the club currently operating under another special UK government license covering the team through the finale of the 2021-22 Premier League campaign, which was issued after Abramovich was sanctioned and expires on May 31.
The consortium, while headed up by Boehly, will also include US billionaire Mark Walter, also a Dodgers co-owner, and Swiss billionaire Hansjoerg Wyss.
While these individuals will all take minority stakes, the majority of the club’s shares will be owned by Clearlake Capital, a private equity firm from California, which will reportedly secure at least 60% of the club’s shares.
The government has now said in a statement: “Following the sanctioning of Roman Abramovich, the government has worked hard to ensure Chelsea Football Club has been able to continue to play football. But we have always been clear that the long-term future of the club could only be secured under a new owner.”
“We will now begin the process of ensuring the proceeds of the sale are used for humanitarian causes in Ukraine, supporting victims of the war … We have been in discussions with relevant international partners for necessary licenses required.”
The Premier League has also commented on the issue, saying: “The Premier League board has approved the proposed takeover of Chelsea by the Todd Boehly / Clearlake consortium.
The board has applied the Premier League’s owners’ and directors’ test to all prospective Directors, and undertaken the necessary due diligence.”
The sale itself will take place in two steps.
Initially, £2.5 billion of the funds will go into an escrow (holding) account until the government declares itself satisfied that this money is certain to end up with charities connected to victims of the ongoing war in Ukraine. When the government is satisfied, that money will be released.
The other £1.75 billion will be invested into the club directly.
None of the proceeds from the sale will go to Abramovich. A £1.6-billion loan that he personally lent Chelsea over the 19 years of his ownership will be repaid into a frozen account under government control that he will not be able to access.
This was one of the issues which had delayed the sale last week, with reports at that time suggesting Abramovich was attempting to secure repayment of the loan to a personal company under the control of an associate.