A £4.25bn sale of the club owned by now-sanctioned oligarch Roman Abramovich can go ahead, with the proceeds to go to humanitarian causes in Ukraine.
Roman Abramovich’s 19-year ownership of Chelsea has come to an end after the British government approved the sale of the Premier League club to a consortium fronted by Todd Boehly, the part-owner of the Los Angeles Dodgers baseball team.
The sale of the London club, one of the top British football teams, was far from straightforward as Abramovich was been put on the sanctions list in March over his links to Russian President Vladimir Putin.
As a result, the UK government had to ensure Abramovich did not personally profit from the enforced sale of a club he had played a key role in turning into one of the most successful football teams in Europe.
The multi-pound sale
The reigning FIFA Club World Cup winners and 2021 European champions will now be sold in a binding £4.25bn deal that includes £2.5bn for Abramovich's shares, the highest price ever paid for a sports team, and $1.75bn of investment. The British Premier League also approved the sale on Tuesday.
Chelsea had been operating under a special licence ever since Abramovich’s assets were frozen in March, which was due to expire on May 31.
Under its conditions, season ticket holders could attend games but no new tickets or merchandise could be sold so as not to generate further revenue.
“Given the sanctions we placed on those linked to Putin and the bloody invasion of Ukraine, the long-term future of the club can only be secured under a new owner,” British Culture Secretary Nadine Dorries said. “We are satisfied the proceeds of the sale will not benefit Roman Abramovich or other sanctioned individuals.”
Instead, the proceeds of the sale are to go to humanitarian causes in Ukraine, with the government tasked with ensuring this happens.
Discussions between officials from Chelsea and the government dragged on for weeks. Of particular concern was the fate of £1.6 billion loaned to Chelsea by Abramovich.
Before that sale could go ahead, assurances were needed from Abramovich about writing off the debt linked to companies he controlled.
Because of this, the money from the sale will initially go into a frozen account before being given to charity. “The steps today will secure the future of this important cultural asset and protect fans and the wider football community,” the statement added.
New owners, fresh money
Boehly had already been attending Chelsea games since the club approved the sale to his consortium, which also features Dodgers principal owner Mark Walter, Swiss billionaire Hansjorg Wyss and Californian private equity firm Clearlake Capital.
It was a hotly-contested sale, with four groups in the final running before Boehly’s was chosen on the basis that they also guaranteed the extra £1.75 billion of investment in the team.
Chelsea fans have become accustomed to lavish spending under Abramovich, with more than $1 billion spent on players, not to mention 21 trophies won by the Chelsea’s men’s team during his ownership. The women’s team also won a league and cup double with a squad funded by Abramovich’s investment.
Chelsea’s ability to commit to new player spending has been strongly curbed by the sanctions, but now the new ownership is set to provide strong investment to manager Thomas Tuchel to strengthen the team.
The men's team will be competing in the Champions League next season after finishing third in the Premier League, despite the off-field turmoil.
Chelsea had won the men’s championship only once, in 1955, before Abramovich bought the club in 2003. Under his stewardship they won a further five, most recently in 2017.