Chelsea Sale: According to reports, ministers are concerned that a £4.25 billion plan to acquire Chelsea could “break apart” due to a lack of agreement with the club over the selling proceeds.
Whitehall is reportedly “alarmed,” according to a UK government insider, that the takeover of the European champions could be “timed out” if deadlines are not reached.
Chelsea has reached an agreement with a private equity-backed partnership led by Todd Boehly, co-owner of the Los Angeles Dodgers baseball team.
Before owner Roman Abramovich was sanctioned for his alleged ties to Russian President Vladimir Putin following the invasion of Ukraine, the club was placed up for sale.
According to a senior Whitehall source, there is now “real fear” that the oligarch is “ready to let Chelsea go under” because of his alleged “refusal to agree to a sale structure that gives government confidence that earnings will go to a good cause.”
When approached, sources close to Abramovich questioned the government’s version of events. Chelsea has been contacted for comment as well.
Chelsea is operating under a special government license that expires on May 31, and any takeover must be approved by politicians and the English football authorities.
Abramovich has stated that he has not requested repayment of a £1.6 billion debt to Chelsea when the club is sold. A representative for the billionaire said earlier this month that he “remains dedicated” to ensuring that the sale revenues “go to good causes.”
The Russian’s spokeswoman claimed in a statement released by Chelsea on May 5 that money from the club’s sale will be “blocked and subject to a legal procedure supervised by authorities,” adding that “their funds are still earmarked” for a charitable foundation.
“To be clear, Mr. Abramovich has no access to or control over these monies, and he will continue to have no access to or control over this money after the sale.”
The club’s “complex” ownership structure, according to the government official, is preventing clearance, with parent firm Fordstam Ltd owing £1.6 billion to Jersey-based Camberley International Investments, a business with alleged ties to Abramovich.
“Two major sticking points remain: where the sale revenues will be housed and what legal guarantees will be offered to the government that the money will go to worthy causes,” they stated.
“Essentially, despite publicly pledging that all proceeds would go to good causes, Abramovich appears unwilling to make the same legal commitments, which would have backed up his public statements from about a week ago that in the deal, neither he nor his affiliates could try to stake a claim to that unpaid debt between Fordstam and Camberley.”
“An agreement that allows money to be diverted during the transaction would be a violation of sanctions and a red line for ministers.”
“There are deadlines at the end of this month and the beginning of June that will either see the club thrown out of European play or the Premier League entirely,” the person continued. However, a significant portion of the deal must be completed this week or next.”
Any transaction is expected to be completed by early June when the Premier League meets to award clubs licenses for next season’s competition.
According to reports, the government has proposed a two-stage process in which the proceeds from any sale would be held in a regulated ‘escrow’ account and released only once it is satisfied that a charity foundation is established.
“The partnership is committed to owning Chelsea and contributing to the prosperity of English football,” a source close to the Boehly consortium told the BBC.
“They are ecstatic that the club has approved their intentions, and they appreciate the constructive discussions they’ve had with the government and football authorities.”
“The sale earnings are between the seller and the government to resolve.”