Are two bids leading Chelsea race?

The £3bn sale of Chelsea football club moved one step closer this week, with two investment groups backed by US billionaires leading the pack in a hotly contested auction being handled by merchant bankers at Raine Group according to the Financial Times.   Other accounts, for example in The Times, argue that there are still four in the race.

According to the Thunderer there is a bid in contention from Stephen Pagiluca, an America private equity executive who is joint owner of the Boston Celtics basketball team and the 55 per cent owner of Atalanta in Serie A.   The private investment firm he co-chairs has assets of £118m.

As seen by the Pink ‘Un, Todd Boehly, the financier and co-owner of baseball’s Los Angeles Dodgers, is up against private equity tycoons Josh Harris and David Blitzer in the bidding for one of sport’s highest-profile assets, although there’s still an outside chance of a dark horse winner.

US billionaires have turned to members of the British establishment to put the shine on their bids, with Boehly winning the support of Times of columnist Lord Daniel Finkelstein, and the rival bid going for City grandee Martin Broughton and Sebastian Coe, World Athletics president.

It’s just one hint that this is a contest that won’t be settled on price alone, and the stakes are high in a complex situation that has required the UK government to exempt Chelsea from the full force of sanctions to avoid its collapse, hence antagonising its large fan base.

According to people with knowledge of the matter, the onus is on bidders to show how much of the cash will go to charitable causes, most likely in Ukraine, and to set out how much they can afford to invest in the club and its Stamford Bridge stadium, which is crying out for expansion and modernisation.

The importance of equity as opposed to debt-heavy offers was vital in the first round of bids, with an offer from Saudi Media Group ruled out because of its reliance on the latter form of financing.

The watchful eye of Chelsea’s supporters is also a key factor in the process, particularly with Raine and Abramovich reliant on obtaining special approval from the UK government to complete any transaction. 

That weakened a rival bid from the Ricketts family, owner of the Chicago Cubs baseball team. Chelsea fans have campaigned against the bid because of an Islamophobia scandal involving the family’s patriarch. The Ricketts stressed that “racism and Islamophobia have no place whatsoever in our society”.

Having decided that Abramovich can no longer own Chelsea, the UK government will be keen to avoid controversy over the identity of the next owner, piling the pressure on Raine and the American billionaires competing to own what is seen as one of football’s trophy assets, particularly by Americans.