Why Chelsea FC Bidders Required to Guarantee Decade-Long Ownership

All bidders will be contractually bound to make at least a ten-year commitment to the club.

With this new regulation, the new owners will not be able to see their stake in the club until 2032. However, they will be allowed to issue new shares and raise additional funding if required. The ownership guarantee will be included in the contract, making it legally enforceable.

It is something never done before in the case of a football club. However, it is similar to obligations that companies participating in initial public offerings need to follow. Institutional investors are bound not to sell their shares for a particular period to avoid market manipulation, provide stability and prevent flipping for a quick profit.

Tens years is a long time and way extreme compared to 90-180 days or year-long restrictions faced by Institutional Investors participating in initial public offerings.

US-based bank Raine Group, which handles the auction, has asked the three shortlisted bidders to guarantee that they will retain the club's ownership for a decade. The unprecedented request comes as the adviser to Roman Abramovich seeks several assurances about the future governance and decision-making of the current Champions League title holders.

Sports minister of the United Kingdom, Nigel Huddleston, said, "It's just over a year since the failed European Super League bid, but it is clear that radical change is needed to protect the future of our national game; we will work at pace to establish a solid and independent regulator.

"However, the football authorities can take action now to tackle issues currently facing the game such as the issue of fair distribution of finances throughout the football pyramid and giving fans a greater say in the running of their clubs."

Why the guarantee, is being embedded into the contract?

Since being acquired by the Russian oligarch, Roman Abramovich, Chelsea has won 19 major trophies and turned into one of the best-performing football clubs in Europe. The purpose of the new condition is to secure the best steward for Chelsea to ensure stability and continuity.

The consortium headed by Steve Pagliuca, the Boston Celtics part-owner and the NBA chairman and Toronto Maple Leaf's owner Larry Tanenbaum has publicly committed to lifetime ownership of the club. Larry Tanenbaum said, "My goal, and that of Steve, would be to own Chelsea for decades to come."

The other two consortiums headed by the former Liverpool FC and British Airways chairman, Sir Martin Broughton, and the LA Dodgers part-owner, Todd Boehly, have not committed to decade-long ownership.

The selected bidder will have to pay over Euro 2 billion to purchase the club, with a further investment of Euro 1 billion towards developing Stamford Bridge Stadium, the academy, and the women's team.

Chelsea's Debt

In the deal put forth by the current owner Roman Abramovich, the USD 1.9 billion debt will be written off and put into equity. The Department for Digital, Culture, Media & Sport will license the sale and could agree to the deal. Owing to the sanctions placed on Roman Abramovich, Chelsea has been barred from buying new players, selling new tickets, or agreeing to any new contract.

The club is currently operating under a special license until it comes under new ownership. A quick sale is of immense importance for Chelsea as any uncertainties will result in the break up of one of the best football squads in Europe.