£100m wiped off Chelsea sale
Boehly allowed to hold back sum amid liability concerns New owner represents club at Premier League summit
Todd Boehly was permitted to hold back more than £100million from the purchase of Chelsea amid concern that the club will be hit with costs over liabilities under Roman
Abramovich’s ownership, Telegraph Sport can reveal.
Club executives under the previous regime had been forced to disclose significant unforeseen liabilities just days before the sale – initially worth a total of £2.5billion, with a further £1.75billion of future investment – was finally struck.
The dramatic last-minute change in price was approved as a result of concerns the club could now face liabilities further down the line. Chelsea have always made it clear they have not breached the profit and sustainability regulations of either the Premier League or Uefa. Under the sanctioned Russian’s ownership, Chelsea had received funding via parent companies in which tax liabilities were understood to have become increasingly difficult to unravel. Checks by regulators after the club effectively became a frozen asset in March prompted Chelsea to declare potentially huge unpaid liabilities to Boehly at the 11th hour.
The new American owner, who partnered with, among others, United States private equity firm Clearlake Capital, was subsequently allowed to hold back a slice of the purchase price.
The deal was completed in such a short timeframe that the liabilities were negotiated as a contingency. As a result, a reduced sum of around £2.3billion appears likely to end up in a foundation for war victims, in the short term at least.
A Chelsea spokesman said when contacted by the Telegraph: “It is not unusual in these types of transactions, particularly deals completed in an accelerated timeframe, to withhold an amount related to any unforeseen liabilities that may arise from transactions that occurred prior to the sale.”
Boehly and co-owner Behdad Eghbali are representing the club at the Premier League’s annual general meeting in Harrogate this week, where they have met the other 19 top-tier clubs for the first time.
Ordinarily Chelsea would be represented at those meetings by Bruce Buck, the chairman, and the club’s now former chief executive Guy Laurence.
Since 2003, Chelsea’s financial ecosystem had been heavily reliant
on offshore payments into the club and a series of interconnected companies.
Last year’s annual accounts for Fordstam Ltd show Abramovich injected around £150million and withdrew around £130million, to end the year loaning the club an overall £19.9million, and taking the total related-party loans to £1.514billion. The loans were due to be repaid to Camberley International Investments Ltd, a Jersey-based entity which was last month the target of a raid by authorities freezing billions of pounds of the Russian’s assets.
Other connected companies to Fordstam include Stamford Bridge Projects Ltd, which declared last week that it had issued one share for £54,010,782 after debt was converted to equity.
The financial set-up under the new regime will be entirely different. Following a fraught threemonth sale saga, Boehly had made commitments totalling £4.25billion, including the purchase price and subsequent 10-year spending commitments.
His consortium fought off 11 serious rivals in a process overseen by the Government after Abramovich formally put the club on the market on March 2.
The final hurdle in the deal was cleared a fortnight ago after Portugal, where Abramovich obtained a passport last year, and the European Union confirmed they had given the deal their green light. Initial proceeds from the sale are sitting in an escrow account while the Government seeks assurances about a foundation for war victims being set up by former Unicef UK chief executive Mike Penrose.
On the playing side, Thomas Tuchel is expected to have around £200million at his disposal in the transfer market.
Los Angeles Dodgers co-owner Boehly shares “joint control and equal governance of the club” with main partner Clearlake Capital. Swiss billionaire Hansjorg Wyss and American tycoon Mark Walter are the other main members of the consortium.