The
owners of the NBA team the Cleveland Cavaliers have joined forces with one
of the four remaining bidders for Chelsea as the auction of last season's
Champions League winners enters its final stages.
Sky News revealed that Rock Entertainment Group (REG), which owns a string
of US sports teams, has agreed to participate in the consortium led by the
Chicago Cubs-owning Ricketts family and the hedge fund tycoon Ken Griffin.
Sources said on Saturday evening that Rock Entertainment Group had agreed to
invest a significant - though undisclosed - sum in the bid.
The emergence of Dan Gilbert, one of the richest people in America with
wealth estimated by Forbes magazine at almost $31 billion, as a participant
in the auction raises the stakes still further as a quartet of bidders vie
to succeed Roman Abramovich as Chelsea's owner.
As well as the Cleveland Cavaliers, REG owns the Cleveland Monsters ice
hockey team, and the NBA G-League team Cleveland Charge. Mr Gilbert is also
an investor in the fast-growing e-sports arena, with a big stake in 100
Thieves, which has a significant presence in e-sports in Europe.
In total, Mr Gilbert presides over an empire of more than 100 affiliated
companies across the US, employing more than 30,000 people.
He acquired majority ownership of the Cleveland Cavaliers in 2005, since
when the team has made the NBA Finals five times, winning the championship
in 2016.
Mr Gilbert is said to have privately invested more than $400m into the
Rocket Mortgage FieldHouse, the stadium which plays home to the Cavaliers
and the Monsters. People close to him said he had also privately invested
more than $25m into the Cavaliers' practice facility.
Ricketts-led bid has faced challenges
The Ricketts-led bid for Chelsea has faced challenges in the last fortnight
because of a backlash over historical comments made by a family member who
is not involved in the offer.
After meeting supporters' groups last month, the Cubs chairman Tom Ricketts
said the bid team had "listened to all of your feedback - including from the
Chelsea Supporters' Trust - and are grateful that the door is still open for
us to demonstrate our commitment to working with fans to protect the club's
heritage.
"It is now up to us to redouble our efforts and clearly lay out a vision for
our stewardship of the club with diversity and inclusion at its heart."
Supporters of their offer have pointed to the family's successful ownership
of the Cubs, having won the World Series for the first time in a century and
completed a $1 billion renovation of its home, Wrigley Field - one of the
most historic sports arenas in the US.
A bid insider said the Cleveland Cavaliers' focus on diversity, equity and
inclusion programs could help to allay any lingering concerns among
Chelsea's fan-base about the consortium's suitability as owners of Chelsea.
They also pointed to the philanthropic endeavours of Mr Gilbert and his wife
Jennifer, who have pledged $500m towards community revitalisation projects
in Detroit.
A person close to them said they had also signed The Giving Pledge in 2012,
promising that at least half of their combined wealth would be donated to
philanthropic causes at the end of their lives.
On Friday, Sky News revealed that the Ricketts-led bid had strengthened its
advisory line-up by adding Jefferies, the US investment bank, to its team.
Jefferies' appointment, alongside that of Lazard - another adviser to the
Ricketts-Griffin bid - underlines how Wall Street banks are jockeying for
roles on what could be the most lucrative sale of a sports franchise in
history.
People close to the consortium confirmed that it would be an all-equity bid,
with no new debt being placed onto Chelsea's balance sheet.
Final bids are due on 11 April
Final bids for Chelsea are due on April 11, and the Cubs owners will be up
against three credible rivals as they vie to succeed Mr Abramovich at
Stamford Bridge.
A spokesman for the Ricketts-Griffin bid declined to comment on REG's
involvement.
Sky News revealed this week that the fan-led group co-founded by the former
Chelsea captain John Terry was in "positive" talks with two of the
shortlisted bidders about acquiring a 10pc stake.
People close to the bidders believe the price could go beyond £2.5 billion
as the contenders prepare final bids.
Raine Group, the adviser handling the sale, is aiming to present a preferred
bid to the government the following week, paving the way for a sale to take
place before the end of the month.
Between them, the final bidders also either control or own stakes in US
teams including the Boston Celtics, the Cubs, the LA Dodgers, the
Philadelphia 76ers and the Sacramento Kings.
In addition to the consortia led by the Ricketts, Todd Boehly and Sir Martin
Broughton, the other contender to buy Chelsea is Stephen Pagliuca, an
American private equity billionaire who owns a big stake in Atalanta in
Italy's Serie A.
By the standards of conventional takeover processes, the Chelsea auction has
moved at breakneck speed, with executives at other major investment banks
suggesting that such a complex sale would typically have taken at least six
months.
Bidders have sought clarity on legal
implications
Mr Abramovich's sanctioning by the UK government has added further
complications to the transaction, as bidders have sought clarity on the
legal implications of buying the club.
Prior to being sanctioned, Mr Abramovich had said he intended to write off a
£1.5 billion loan to the club and hand the net proceeds from the sale to a
new charity that he would set up to benefit the victims of the war in
Ukraine
A rapid sale is seen as essential if Chelsea is to avert the uncertainty
that would trigger the break-up of one of the top flight's most valuable
playing squads.
The current FIFA Club World Cup winners have been thrown into disarray by
Russia's war on Ukraine, with Mr Abramovich initially proposing to place the
club in the care of its foundation and then formally putting it up for sale.
Mr Abramovich had initially slapped a £3 billion price tag on the Stamford
Bridge outfit, with the net proceeds being donated to a charitable
foundation set up to benefit the victims of the war in Ukraine.
As well as government consent in the form of a special licence, Chelsea's
new owners will also require the approval of the Premier League under its
fit and proper ownership test.
Chelsea sale: Ricketts family commit to
diversity amid fan protests
The Ricketts family pledged to put "diversity and inclusion" at the heart of
Chelsea as fans protested their bid to buy the club outside Stamford Bridge
on Saturday.
Between 50-100 Chelsea supporters gathered ahead of Saturday's Premier
League clash at home to Brentford to demonstrate against the Ricketts
family's bid to buy Chelsea.
The Chelsea Supporters' Trust said earlier on Saturday its membership
"neither supports nor has confidence in" the potential new owners and that
77 per cent of members polled did not support the Ricketts' family bid.
The family have committed in previous statements to being diverse and
inclusive and doubled down on that pledge in a statement on Saturday.
It said: "Over the past fortnight, our bid team has met with several
supporter groups to explain our vision for Chelsea Football Club. In those
meetings, and by letter to all groups, we have shared a set of specific
commitments we will make to fans, if our bid is successful.
"We believe these are far-reaching and certainly include an absolute
commitment on the part of the Ricketts Family and the bid team to put
diversity and inclusion at the heart of the club.
"We look forward to more meetings - including with the Chelsea Supporters'
Trust - over the coming days and to making a public reiteration of our
values and commitments."
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