English Premier League powerhouse Chelsea FC is on the sale block as the result of pressure on team owner Roman Abramovich.
What Happened: Abramovich said the sale will be completed in “due process.” The owner also said he will not ask for loans he provided to the team to be repaid.
“I have always taken decisions with the Club’s best interest at heart. In the current situation, I have therefore taken the decision to sell the Club, as I believe this is in the best interest of the Club, the fans, the employees, as well as the Club’s sponsors and partners,” Abramovich said.
Net proceeds from the sale will be donated to a charitable foundation used to help victims of the war in Ukraine, he said.
Abramovich acquired Chelsea in 2013 for 140 million pounds, the equivalent of $187 million at today’s prices. The Chelsea owner is worth $13.5 billion, ranking 142nd on the Bloomberg Billionaires list as of Wednesday.
Abramovich helped bankroll massive spending on the team to make it more competitive in the EPL and with the best teams in the world. With Abramovich as team owner, Chelsea won five English Premier League titles, two Champions League titles and one Club World Cup.
The sale announcement comes as many are putting pressure on the U.K. government and others to freeze assets of Russian billionaires who support President Vladimir Putin.
The Raine Group is being tasked with advising Abramovich and the team on a potential new owner. Bids are expected to be required by the end of this week, the New York Times reported.
Spotify Technology SPOT founder and CEO Daniel Ek was linked with a potential bid for EPL team Arsenal in April 2021. Ek is a fan of Arsenal, a rival of Chelsea, so a bid could be unlikely but a potential consideration to own an EPL team.
Swiss billionaire Hansjorg Wyss was named by the New York Times as a potential suitor with a group of bidders.
Todd Boehly, who owns a portion of the Los Angeles Dodgers (MLB) and Los Angeles Lakers (NBA), is also mentioned as a suitor. Boehly is a partial owner of Vivid Seats Inc SEAT and Sportradar SRAD.
The quick bid deadline and high price tag could make the team out of reach for sports-based SPACs and DAOs, which have expressed interest in public sports team ownership.
Stocks To Watch: The sale of Chelsea, which could come at a reported price tag of $2.5 billion, could increase valuations for other soccer teams.
Publicly traded Manchester United MANU, which also competes in the English Premier League, could be the biggest potential winner. Manchester United trades at a market capitalization of $2.1 billion and an enterprise value of $2.7 billion.
Chelsea in comparison was given a valuation of $3.2 billion by Forbes and $3.4 billion by Sportico.
A sale of Chelsea in the $2.5 billion to $3 billion range could lead to a rise in the value of publicly traded Manchester United, as the team has ranked ahead of Chelsea by valuation for many years.
Italian soccer club Juventus FC JVTSF trades over-the-counter and is another one of the most valuable soccer teams in the world, ranked 11th on the Forbes list at a value of $2 billion. The value of the stock could increase depending on the sale price of Chelsea.
Another stock to watch is The Roundhill MVP ETF MVP. The sports based ETF owns stakes in several publicly traded soccer teams.
Manchester United is the third-largest holding at 5.9% of assets. Borussia Dortmund and Juventus are the fifth and sixth largest positions in the ETF at 5.7% and 5.5% of assets respectively. The ETF also owns smaller stakes in several other publicly traded soccer teams.
Photo by Ank kumar via Wikimedia.
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