CAMPAIGN: Corporate PR - Citigate sells billionaire to Chelsea fans

Client: Millhouse Capital PR Team: Citigate Dewe Rogerson Campaign: Takeover of Chelsea Village Timescale: June - August 2003 Budget: £125,000

Despite being ranked number 49 in Forbes magazine's list of the world's richest people, until July this year Russian billionaire Roman Abramovich was virtually unknown in the UK. His acquisition of Chelsea Village, parent company of Chelsea Football Club, thrust him into the limelight.

Citigate Dewe Rogerson was hired by Abramovich's British investment vehicle Millhouse Capital to work alongside investment bank Citigroup on the deal.

Objectives

To secure the takeover of Chelsea Village, turning it from a publicly-owned entity with 12,000 shareholders into a private company owned by the Russian entrepreneur.

Strategy and Plan

On 26 June Abramovich met Chelsea chairman Ken Bates at the Dorchester Hotel in London, where they agreed the sale of Bates's 50.9 per cent stake in Chelsea Village. Over the next few days things moved frenetically, with the investment bank hammering out the finer points of the transaction and CDR putting in place its team and communication strategy. The purchase was done through investment vehicle Millhouse Capital, which looked at several clubs. Millhouse had no in-house media relations expertise, so CDR took on the task of handling all dealings with journalists.

'The nature of football as a business is that everyone talks to everyone, so we had to move quickly,' said CDR deputy chairman Jonathan Clare. For fear of having the news leaked - worryingly, the Chelsea Village share price was already rising, causing concern that rumours were seeping out into the marketplace - the decision was taken to release the story as soon as feasible. This entailed making the announcement at the slightly unusual time of 9.30pm on 1 July.

The lateness of the hour meant the CDR team had to work feverishly to brief newspaper business and sports correspondents in time for them to file their stories for the following day. Broadcast journalists were also briefed, among them BBC business editor Jeff Randall, who was able to put together a report that aired on the Ten O'Clock News, just half an hour after the announcement.

Over the years, the British football scene has been bedevilled by supposed white knights riding to the rescue of clubs needing a financial boost, only to run out of the willpower, or funds, to turn things around. One such example was businessman Michael Knighton, who tried to buy Manchester United in 1989 but ran out of cash.

Given the lack of awareness about Abramovich, it was deemed essential he was presented as a credible purchaser with sufficient money at his disposal to acquire Chelsea Village and invest substantially in the club to enable it to challenge for honours domestically and in Europe.

It was therefore imperative to assure both investors and fans that Abramovich was a seriously wealthy individual able to use his extensive personal resources to wipe out Chelsea's £90m debt.

The strategy also recognised that in many instances investors and fans were one and the same. Around 10,000 Chelsea Village shareholders were retail investors who had bought equity in the club primarily because they were Chelsea supporters.

Clearly, the fan-shareholders were involved for emotional rather than hard-headed investment reasons. It was essential, therefore, to get across that the Abramovich takeover would be in the long-term best interests of the club. The transaction summary released by CDR explained Abramovich was both a major shareholder in one of Russia's largest oil companies, Sibneft, and he was a keen 'follower of sport and international football'.

CDR was also contacted by numerous fan-shareholders anxious to find out what the deal would mean for them personally. 'The offer was above the market price so many people (shareholders who bought because they were club fans) comforted themselves with that,' added Clare.

Measurement and Evaluation

Can anyone have missed coverage of this story? As well as making it onto BBC1's flagship 10pm news bulletin, the story was carried by all national newspapers.

On 2 July the freshly coined term 'Chelski' appeared in The Guardian, The Sun, the Daily Mirror, the Daily Star and The Evening Standard.

The Daily Telegraph's coverage also quoted Clare as saying Chelsea's debt would be 'largely irrelevant', reinforcing the message that the deal would put the club on a far surer financial footing.

Results

Abramovich has succeeded in taking control of Chelsea. The presentation of the tycoon as one of the world's most accomplished entrepreneurs helped allay any concerns as to his financial clout.

Other question marks were comprehensively swept away by Chelsea's summer spending spree, which has seen the club shell out over £100m to bring in a host of top players.

'I didn't get the impression that Abramovich's image was being stage-managed,' said The Times sports writer Ashling O'Connor. 'They wanted to get across that it was a serious deal. The fact that Citigate was doing the PR and Citigroup was the bank gave the whole thing credibility.'

Share certificates will be returned to all investors - allowing fans to frame them if they so wish. But if Chelsea keep racking up results like their away win against Liverpool on the opening day of the Premiership season, the blow of no longer owning a piece of the club will surely be softened considerably.

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