Ministers are concerned that a £4.25 billion proposal to acquire Chelsea might “fall apart” due to a lack of agreement with the club over the earnings of any sale, according to the BBC.
Whitehall is reportedly “alarmed,” according to a UK government insider, that the takeover of the European champions might 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 franchise.
Before owner Roman Abramovich was sanctioned for his suspected ties to Russian President Vladimir Putin during the invasion of Ukraine, the club was placed up for sale.
However a senior Whitehall source revealed there was now “serious concern” that the oligarch was “willing to let Chelsea go under” over an alleged “refusal to agree to a sale structure that gives ministers confidence that proceeds would go to a good cause”.
When asked, people close to Abramovich questioned the government’s account 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 club’s “complex” ownership structure, according to the government insider, is preventing clearance, with parent firm Fordstam Ltd owing £1.6 billion to Jersey-based Camberley International Investments, a company with suspected links to Abramovich.
“Two big sticking points remain – where exactly the proceeds of the sale will be held, and what legal guarantees government will be given about the money going to good causes,” they said.
“Essentially, despite committing to all proceeds going to good causes in public, Abramovich seems unwilling to give the same legal commitments, which would have backed up his public statements of about a week ago, that in the deal neither he nor his affiliates could basically try and stake a claim to that unpaid debt between Fordstam and Camberley.
“A deal which would allow the cash to be diverted during the deal would be a breach of sanctions and is seen as a red line for ministers.”
The source added: “There are deadlines at the end of this month and the start of June, which would either see the club booted out of European competition or the Premier League entirely. But a good chunk of the sale needs to be done this week or next.”
Any transaction is expected to be finalized by early June, when the Premier League meets to award teams licenses for next season’s competition.
According to reports, the government has suggested a two-stage procedure in which the proceeds from any sale would be held in a regulated ‘escrow’ account and given only once it is satisfied that a charity foundation is established.
“The consortium is committed to buying Chelsea and contributing to the success of English football,” a source close to the Boehly consortium told the BBC.
“They are delighted that their plans have been accepted by the club, and welcome the constructive conversations they’ve had with the government and football authorities.
“The proceeds of the sale are a matter for the seller and the government to resolve.”
