Ares Management is backing two candidates in the race to buy Chelsea football club from billionaire Roman Abramovich, who put the team up for sale after Russia invaded Ukraine.
The investment group, which has more than $300 billion in assets under management, is set to take a minority stake in the English Premier League side, adding to its sizable portfolio of sporting assets, people say close to the file.
Ares agreed to back the bid led by private equity moguls Josh Harris and David Blitzer, or that of Stephen Pagliuca, co-chairman of US private equity firm Bain Capital, and National Basketball Association chairman Larry Tanenbaum. , if either prevails, the people mentioned.
The two groups face a shortlisted third bid for the club, led by financier Todd Boehly and Santa Monica-based asset manager Clearlake Capital, at an auction run by US investment bank Raine Group.
The purchase into the club would add to a series of recent sporting investments by Los Angeles-based Ares, which has underlined its desire to provide “long-term patient capital” to the sector.
As of last summer, the asset manager had committed more than $1 billion in investments, including minority stakes in Spanish La Liga champions Atlético Madrid and Formula 1’s McLaren Racing. the San Diego Padres of Major League Baseball and the Ottawa Senators of the National Hockey League.
Ares declined to comment.
The coronavirus pandemic has accelerated institutional investment in sport. Leagues and teams have been forced to bolster their finances after losing billions of dollars in revenue as matches were first postponed and then played behind closed doors without fans present.
Harris and Blitzer, who are joined in their bid by Formula 1 driver Lewis Hamilton, tennis champion Serena Williams and City of London great Martin Broughton, have lined up a trio of banks to provide debt financing to strengthen their financial resources.
Bank of America, JPMorgan and Wells Fargo provide five-year £500m term loan to Harris and Blitzer’s bid, which is presented by Broughton, and additional £100m revolving credit facility , according to bankers with direct knowledge of the matter. All three banks declined to comment.
“The option of a committed credit facility only exists to provide potential additional cash to the club,” a spokesperson for the Harris and Blitzer offer said, adding that the funds “are purely additional to the proposed consortium share offering” and there are no current plans to draw on the facility.
The financial package also establishes relationships with three major banks ahead of plans to redevelopment Chelsea’s stadium, which has a far lower capacity than its main Premier League rivals.
Ares’ commitment to Harris’ offer “has no deadline, no commitment, imposes no limits on the club and pays no coupons,” the spokesperson added, stressing that they “would be l ‘one of the most diverse ownership groups in the Premier League – representing a variety of cultures and backgrounds representative of Chelsea’s players, supporters and global football community’.
Raine could name a preferred bidder for Chelsea as early as next week. The deal requires the green light from the Premier League and special approval from the British government, which has said Abramovich, who is under British sanctions, cannot benefit from the sale. The Russian billionaire previously pledged to donate the net proceeds to charity.
Funded by their wealth, Chelsea have repeatedly won the highest accolades in world football. Under Abramovich, owners of Chelsea since 2003, the club have won the league title five times and are twice winners of the UEFA Champions League, Europe’s most prestigious club tournament.