(Bloomberg) – A group led by former Guggenheim Partners chairman Todd Boehly and Clearlake Capital have reached an agreement to buy Chelsea Football Club that will make it the 10th Premier League team to be fully or partially backed by US investment.
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The £4.25 billion ($5.25 billion) deal includes a £2.5 billion purchase of Chelsea shares plus £1.75 billion for new investment to benefit the club, according to a report. statement Friday confirming earlier reports from Bloomberg News and others.
The sale still requires approval from the British government, which sanctioned the club’s current owner, Russian billionaire Roman Abramovich in March following the invasion of Ukraine. Members of Boehly’s consortium must also meet Premier League rules for owners and directors.
Proceeds from the sale will be deposited into a frozen UK bank account with the intention of donating 100% to charitable causes, as confirmed by Abramovich, according to the statement. Government approval will be required for proceeds to be transferred from this account, Chelsea said in the statement.
The £1.75 billion to be invested by the Boehly Group will go to the club’s Stamford Bridge and Kingsmeadow stadiums, as well as its women’s team, youth player development academy and the Chelsea Foundation, the statement said. .
Chelsea said the sale is expected to be completed by the end of May.
The Clearlake Stake
The group of buyers includes Swiss businessman Hansjoerg Wyss and Guggenheim Partners CEO Mark Walter, Bloomberg News reported. Clearlake Capital will hold a roughly 61% stake, said a person familiar with the deal who asked not to be identified because that information is not public.
Boehly and Walter are co-owners of Major League Baseball’s Los Angeles Dodgers. The group has not officially declared its members or their holdings.
Chelsea have been one of Europe’s top sides for the past 20 years and, under Abramovich, became European champions last season. Despite their success on the pitch, the club were still losing $1.2million a week, according to Kieran Maguire, lecturer in football finance at the University of Liverpool.
The sale of the club, which was managed by New York-based bank Raine Group, attracted bidders from around the world, including Turkey and Saudi Arabia. The first four, however, were largely funded by the United States.
A fifth bidder for Chelsea, British billionaire Jim Ratcliffe, arrived late, with a bid also worth £4.25 billion. That offer was “rejected out of hand by Raine,” Tom Crotty, director of Ratcliffe-owned chemicals producer Ineos Group Ltd, said on Wednesday.
The first English team to attract American capital was Manchester United in 2003 when the Glazer family bought a 2.9% stake, according to CIES Sports Intelligence. Two years later, the Glazers bought the club for over £700million.
Boehly’s deal for Chelsea continues a busy period for American investors attracted to European football. Miami-based 777 Partners has built a stable of historically important clubs, including Genoa in Italy and Standard Liege in Belgium.
Italian club Venezia was bought in 2020 by Duncan Niederauer, former CEO of the New York Stock Exchange. The Italian teams of Spezia, Milan and Fiorentina are also owned by Americans.
RedBird Capital bought Toulouse in France, which had just been promoted to Ligue 1. In February, Stephen Pagliuca, who was one of Chelsea’s disappointed bidders, bought a majority stake in Italian club Atalanta.
(Updates with club statement beginning in first paragraph)
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