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Chelsea bids introduce us to the American sports syndicate

Epitaphs have been written for globalisation in the wake of the war in Ukraine, but it is still a force in football, even if there are no longer Russian and Chinese bidders.

If the Chelsea takeover story has told us anything it is that British football’s move to more contemporary North American ownership structures, backed by North American money, is the way things are going.

The three finalists in the auction for Chelsea are all partnerships of plutocrats, as was the Chicago-based bid led by the Ricketts family and billionaire investor Ken Griffin that pulled out of the race before last week’s deadline for final bids. Each of these bids includes advisors and potential directors from the UK but the vast majority of the partners, and almost all of the money, is from the US and Canada.

Not as British as it looks

The bid led by former British Airways and British American Tobacco boss Sir Martin Broughton.  It may appear to be wrapped in the union jack. British business royalty, Broughton is also a huge Chelsea fan and has experience of running a major football club during a difficult transition, as he helped Liverpool move from the troubled ownership of two Americans, Tom Hicks and George Gillett, to the calmer waters of Fenway Sports Group (FSG).

Broughton is the figurehead of the bid — a very good figurehead — but most of the money is coming from American billionaires. Chief among those are David Blitzer and Josh Harris, who already own minority stakes in Crystal Palace, among other sports investments, but presumably want to move up market, and Alejandro Santo Domingo, a Colombian-American financier who owns a significant stake in the world’s largest brewer, AB InBev, and is married to an heir of the Duke of Wellington.

A big cheque

All three of these bids are strong and none should have much difficulty in hitting a number somewhere north of £2.5 billion, which The Athletic has already reported would be the biggest cheque ever written for a sports team. Who wins, however, will depend on which of them convinces the British government, the Raine Group (the American bank running the auction) and current owner Roman Abramovich (the elephant in the room) that they will be the least controversial and most popular new custodian at Stamford Bridge (and can fund a much needed redevelopment of the stadium).

The sports syndicate

The concept of the ownership syndicate has crept up on us.    If done correctly, they can bring together a diversified group of individuals, with various backgrounds that can add experience and expertise.  

These structures have been commonplace in private investments in the US since the 1970s, which means they have been commonplace in US sports ownership, too. It is how most sports deals are done now in the US — the sums involved are just so big, syndicates are an inevitable by-product.   They can look more user friendly if they have the names of prominent sports stars such as Serena Williams and Sir Lewis Hamilton added to them in return for relatively small stakes.

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