Roman Abramovich’s Chelsea team sale poised to rank among biggest in sports
Summary
- Several U.S. bidders for the Premier League soccer club have emerged. Net losses under its oligarch owner have reached more than $1 billion.
Chelsea F.C. has racked up more than $1 billion in net losses since the Russian oligarch Roman Abramovich acquired the Premier League soccer club almost two decades ago. But bidders are lining up to pay what could be among the largest prices for a professional sports team as the shortage of marquee clubs on the market drives valuations higher.
The Russian oligarch, sanctioned by the U.K. government because of his ties to the Kremlin, put Chelsea on the block last month. The auction has attracted a who’s who of bidders despite the losses, many of them Americans who already own sports franchises at home.
Bidders, according to people familiar with the matter, include a group led by Los Angeles Dodgers investor Todd Boehly; the Chicago Cubs-owning Ricketts family, who have joined with Ken Griffin, the hedge-fund billionaire; Stephen Pagliuca, co-owner of the Boston Celtics and co-chairman of private-equity firm Bain Capital; and Philadelphia 76ers co-owners and private-equity veterans Josh Harris and David Blitzer.
Chelsea has attracted bids of around $3 billion, some of the people said. At that level, a sale could end up being the largest sports-team transaction ever, according to Dealogic’s data on publicly announced deals.
It might not hold the title for long. The sale of the National Football League’s Denver Broncos is expected to eclipse all others. The largest sale price to date for a sports team is the $2.4 billion in the 2020 acquisition of Major League Baseball’s New York Mets by billionaire hedge-fund manager Steven A. Cohen, according to Dealogic.
A deal for Chelsea is expected by the end of April, according to some of the people familiar with the matter.
Some American investors have a keen interest in the Premier League. Fenway Sports Group, or FSG, owns the Liverpool soccer team. The Florida-based Glazer family controls Manchester United, which is listed on the New York Stock Exchange. Arsenal F.C. was acquired outright in 2018 by Stan Kroenke, owner of the Los Angeles Rams. Fortress Investment co-founder Wes Edens, together with Egyptian billionaire Nassef Sawiris, heads Aston Villa F.C.
That interest underscores the growing popularity of the Premier League among U.S. audiences. NBCUniversal, owned by Comcast Corp., last year agreed to pay close to $2.7 billion to extend its Premier League broadcasting rights for six years. That is close to triple the $1 billion value of the broadcaster’s current six-year deal, which expires next month.
U.S. interest in the Premier League comes as demand dries up from Russian and Chinese investors because of the war in Ukraine and China’s earlier moves to clamp down on outbound investment.
Mr. Abramovich bought Chelsea in 2003 for about £140 million, equivalent to about $184 million at current exchange rates.
Over almost 20 years, the team has generated a total net loss of £894 million, equivalent to $1.2 billion, according to filings with the U.K. corporate registry. At the same time, Mr. Abramovich has shelled out a total of close to $2 billion in loans to the club to support it financially.
Mr. Abramovich, who isn’t involved in the sale process, said he won’t receive any proceeds from the team sale and will forgo the loans that the club owes him.
Part of the reason for the heavy losses over the years: Mr. Abramovich spent heavily to attract and develop top players. He transformed the club into a consistent performer often competing for titles. It won last year’s Champions League, the top tournament among European clubs.
Chelsea enjoys widespread brand recognition and is based in London, a global center, explaining the high level of buyer interest from American investors who already own teams, said Alec Scheiner, a partner at RedBird Capital Partners. The investment firm holds a stake in FSG, which owns the Boston Red Sox and the Pittsburgh Penguins.
The trick for any new buyer will be to navigate the costly redevelopment of Chelsea’s charming but antiquated Stamford Bridge stadium in the heart of tony West London. The existing facility accommodates a little more than 40,000, ranking it ninth among Premier League venues.
Chelsea bidders are betting on developing new sources of revenue. “Otherwise you are buying the team simply as a vanity project," said Kieran Maguire of the University of Liverpool.
Chelsea first submitted a renovation plan in 2015 for the stadium to expand seating capacity by almost 45% to 60,000. Mr. Abramovich canceled plans in 2018 to spend more than $1 billion on the project after the U.K. blocked his visa renewal.
This story has been published from a wire agency feed without modifications to the text
