The last four candidates to buy the Chelsea of the Premier League are willing to acquire the team at a cost never seen before, close to 3,600 million euros. It will be an excess of more than 1,300 million euros to its estimated business value, due to benefits such as its prestige as a consolidated team in one of the most important sports competitions and its future economic projection.
The deadline to choose the new owner of Chelsea is approaching and among the four highest bidders are the Ricketts family, owners of the Chicago Cubs; the consortium led by Todd Boehly, co-owner of the Los Angeles Dodgers; billionaire Stephen Pagliuca, owner of the Boston Celtics and Italian Atalanta; and Crystal Palace FC co-owners David Blitzer and Josh Harris, along with English businessman Sir Martin Broughton.
On Monday, it was even announced that to strengthen Stephen Pagliuca’s offer, it was added to its consortium Larry TanenbaumChairman of the NBA Board of Governors and representative of the Toronto Raptors.
Despite the fact that the British government and the European Union forced the Russian oligarch Roman Abramovich to ditch the club (which in 19 years in his charge won five Premier League titles and two UEFA Champions League titles) as a sanction for the invasion of Russia to Ukraine, the team is an important asset that is about to reach a record amount for its sale.
According to media reports, bids for the defending FIFA Club World Cup champion are approaching the 3.6 billion euro ($4 billion) mark. This figure would exceed the highest fee ever paid by a sports organization, which until now is owned by the Brooklyn Nets of the NBAwhen Joseph Tsai paid for the acquisition of the team and its stadium 3,350 million dollars (about 3,082 million euros) in 2019. It would also be four times more than the highest price paid for a soccer club, which marked 1,160 million euros that the Glazer family used to buy the shares of Manchester United FC between 2003 and 2005.
Currently, Chelsea is third in the Premier League, 12 points behind Manchester City, which is leading with six games to go. In addition, the blue club will play the second leg of the quarterfinals in the Champions League against Real Madrid on Tuesday, where they start with a disadvantage of three goals to one. Although the panorama is not very encouraging to caress the trophies in this closing of the campaign, the value of the team extends further.
Football Benchmark indicated that, despite the fact that the team’s business value was estimated at 2,227 million euros in 2020, the attributes that raise the value of Chelsea have to do with its prestige, competition in offers, its location in London (a of the cultural and economic capitals of the world, attractive to players and potential business partners), the stability of sports results, the growth of broadcasting rights, the projections of their profitability, in addition to the fact that there is a shortage of clubs in the market of such size for purchase.
The abundance of possible interested parties, together with the urgency of the bidding process, have made the valuation of the franchise more expensive. Under normal circumstances, the price would have had the opposite effect because the team is under strong sales pressure, as it is still owned by Abramovich and is subject to certain sanctions that restrict its economic operation.
Chelsea are also an established UEFA Champions League club and their new owners will avoid the hassle of moving up from mid-tier or below. Instead, the downward movements of the so-called ‘Big 6’ in the Premier League are much more complicated. That is, investing immediately at the top significantly reduces the uncertainty of sports results.
In addition to this, Abramovich stipulated in the sale of the club that the new owners must commit to making significant improvements to the stadium’s infrastructure. The club expects its capacity to be expanded to 62,500 spectators. While this is an investment, it will also allow the new owners to increase their matchday income. At the same time, the modernization of the venue would create opportunities for more important alliances, such as the sale of the rights to the name of the venue, one of the most lucrative sources of income.
rrg