Todd Boehly’s consortium remain on track to buy Chelsea, as per basically all the latest reports around this situation, even as the Government numpties try to figure out what to do with the £1.5b loan (and its tax implications) that Roman Abramovich wants to write off but he either can’t (which he seems to believe, seeing as how he’s sanctioned) or won’t (which the Government’s accusing him of trying to do).
The fact that Fordstam technically owes that debt to a(nother Abramovich) company that’s not based in England (Camberley International), but which is also under sanctions (by Jersey) also complicates things, and while solutions ranging from the new owners taking on the debt to the debt being converted to equity to whatever else well beyond my understanding have been proposed, at the end of the day, if they don’t have to take it on, it’s not a concern for the new owners. The issues of frozen assets, loans, debt, whatever are issues between Abramovich and the UK Government, and they don’t necessarily have to affect the actual sale of the club — with the proceeds set to be frozen anyway, regardless of whether they’re eventually intended to reach charitable organizations, grassroots football, the government’s accounts, or Roman’s back pocket.
Along those lines, the Telegraph are reporting today that the Government’s open to the idea of putting in a “backstop” for this issue, to focus on the actual sale of the club and then figure out the rest later between themselves and Abramovich.
This sounds good in theory, as long as it satisfies any concerns from the Boehly bid’s end and doesn’t saddle the club with the debt itself, and so on.
Revealed: Clearlake Capital's stake in Chelsea FC would be reduced to about 60% under a restructured ownership agreement being finalised following Roman Abramovich's demand for an additional £500m to buy the Premier League club. More here: https://t.co/5q2133CYqP— Mark Kleinman (@MarkKleinmanSky) May 4, 2022
On a related note, Sky News are reporting that the make-up of the Boehly bid has shifted in recent days following the request for the additional €500m up front, with Clearlake Capital’s portion reduced from two-thirds to just 60%, and all the minority investors making up 40%. That would seem to suggest that the overall bid is now actually around £5b (assuming the previous was £4.5b, with Clearlake putting up £3b — which now would constitute 60% of the bid, down from 66%). Either way, the control is still set to split 50-50 between the two main stakeholders.
Meanwhile, a man who bid less than Boehly, with no plan and even fewer concrete ideas, Sir Jim “just vibes” Ratcliffe has been told to go away by Raine Group, but is apparently ready to re-submit his bid if for some reason the Boehly bid fails — even though the other two consortiums would then be asked to step back up first.
Worth adding the Boehly group are progressing step by step and the expectation remains they will complete. Ratcliffe chances rest on something going wrong or Chelsea performing a big U-turn and even then he might not get into the process. Pagliuca and Broughton bids on standby.— Matt Law (@Matt_Law_DT) May 4, 2022
Ratcliffe’s team have confirmed to the Telegraph that they’ve been told to “forget it” by Raine, that they bid on a whim, that they want Raine to do extra work for them, that they have no set plans for the club or the stadium, have done none of the work required by the process, that they don’t actually want to be involved in running the club, that they have no idea what actually would happen with OGC Nice ... but they’re here for the “British bid” vibes, man, even though Ratcliffe left the country to pay taxes in Monaco instead.
“We’ve had an email to say ‘forget it, you’re not in the process’. That was from Raine, but we’re not giving up because we believe what we’ve got is a bid that makes good sense for the club.
“They will say it was too late. We said ‘you need to give us some feedback and if we’ve got something wrong, tell us what we’ve got wrong and we can try to correct it’. But we haven’t even had that opportunity. We were told over the weekend. I’m not going to criticise Raine because we are late and in their defence, they will use that and say you should have been in much earlier.
“[When] we saw this process, we thought ‘well it’s still going to be too pricey’ and then we started getting vibes back that the bids were in our opinion quite reasonable, people talking about the £2.5 billion number, which against current revenues looks quite sensible. They make financial sense, so that’s why we threw in a late bid. We thought ‘if genuinely the deal would be done at those sorts of prices then let’s have a go’.
“[...] Two weeks earlier, we hadn’t decided we wanted to do it, it’s as simple as that.”
-Tom Crotty; source: Telegraph
(Crotty does a raise a good point in that private equity firms like Clearlake Capital are not allowed to own majority stakes in the NFL for example, since by definition they’re looking for quick profits, but that’s why the ten-year-hold requirement from Raine was an important consideration — and Capital’s co-founder being an “active director” also would suggest a more personal touch from them.)