A new twist in one of the Chelsea takeover bids shines a light on Czech billionaire Daniel Kretinsky at West Ham.
The race to takeover Chelsea from Roman Abramovich has reportedly been whittled down to four bids.
And one of those Chelsea takeover bids shine a light on the situation surrounding West Ham’s second biggest stakeholder Kretinsky.
Until very recently, the name Stephen Pagliuca had not been mentioned in reports on the Chelsea bidding process but he is said to be very much in the running.
And it has inadvertently cast the spotlight on a potential situation which could arise at West Ham as soon as next season.
Pagliuca is a private equity executive who co-chairs Bain Capital, a firm which has £117billion ($155bn) capital under management. The 67-year-old, who is on the board of directors at Burger King, has a history of investing in sport, having bought NBA franchise the Boston Celtics in 2003.
According to Sky News, it is currently unclear whether Pagliuca is bidding alone for Chelsea, or in conjunction with other partners.
With an estimated net worth of around £3bn (Daily Mail), Pagliuca has less personal wealth than West Ham co-owner Kretinsky – who purchased a 27 per cent stake in the Hammers back in February for £150m.
Twist in Chelsea takeover bid shines a light on Czech billionaire Daniel Kretinsky at West Ham
But it is his 55 per cent stake in Serie A side Atalanta that shines a light on Kretinsky at West Ham. Like Kretinsky and the Hammers, Pagliuca only became involved with Atalanta this season.
And according to widespread reports in the likes of The Mirror, the prospective Chelsea owner has been told he would have to dilute his stake in the Italian club if he were to be successful with Chelsea, due to potential conflicts of interest arising in European competitions like the Champions League.
West Ham played and beat Atalanta 2-0 in pre-season and could face them in the Europa League final should both sides progress that far as the competition enters the last eight.
As highlighted by Hammers News not long after Kretinsky’s arrival at the club, West Ham face the very same issue as Chelsea given their new Czech co-owner also owns Sparta Prague in his homeland.
Particularly given widespread claims from the likes of The Evening Standard that Kretinsky will look to eventually complete a full takeover at West Ham.
Back in November, Hammers News contacted UEFA for clarification over the multi-club ownership situation.
And Europe’s governing body responded by pointing to Article 5 of its constitution which strictly states that ‘no individual or legal entity may have control or influence over more than one club participating in a UEFA club competition’.
Given West Ham and Sparta will be in the running for a place in Europe again that situation could rear its head as soon as next season depending on Kretinsky’s plans for his stakes in both clubs.
Some fans assume this would give Kretinsky a tough choice to make should he remain a person of influence at Sparta Prague having become West Ham’s second biggest stakeholder.
Many Chelsea fans will likely assume the same if Pagliuca was to be successful and retain his stake in Atalanta.
But that is not the case at all. Because should the billionaires have influence over decision making at both clubs, they would have no say in which of their clubs would effectively be banned from Europe.
UEFA has a set of distinct rules which dictates which club would be banned from Europe.
UEFA’s criteria is laid out in order below. If Kretinsky wants to be in charge of both clubs then the odds would more often than not favour Sparta Prague in the first two criteria.
Given Sparta would arguably be more likely to have the chance to qualify for the Champions League than West Ham most seasons, it could mean the Hammers miss out at the first hurdle.
Chelsea would have the upper hand in that regard over Atalanta most seasons. But the Italian side finished third in Serie A for three consecutive seasons which would have seen them given priority over Chelsea in the last two campaigns.
UEFA rules on clubs competing in Europe who do not meet strict multiple club ownership rules:
If two or more clubs fail to meet the criteria aimed at ensuring the integrity of the competition, only one of them may be admitted to a UEFA club competition, in accordance with the following criteria (applicable in descending order):
- the club which qualifies on sporting merit for the most prestigious UEFA club competition (i.e., in descending order: UEFA Champions League, UEFA Europa League or UEFA Europa Conference League);
- the club which was ranked highest in the domestic championship giving access to the relevant UEFA club competition;
- the club whose association is ranked highest in the access list (see Annex A).
Whatever happens at least one of the clubs involved could be impacted.
There is one way for Kretinsky and Pagliuca to head off these hugely damaging potential scenarios.
Sell their stakes in one and focus on the other, whichever that may be.
The UEFA rules on MCO – which you can view in full here and below – are very clear.
UEFA Article 5 Integrity of the competition / multi-club ownership
5.01
To ensure the integrity of the UEFA club competitions (i.e. UEFA Champions League, UEFA Europa League and UEFA Europa Conference League), the following criteria apply:
- No club participating in a UEFA club competition may, either directly or indirectly:
- hold or deal in the securities or shares of any other club participating in a UEFA club competition;
- be a member of any other club participating in a UEFA club competition;
- be involved in any capacity whatsoever in the management, administration and/or sporting performance of any other club participating in a UEFA club competition; or
- have any power whatsoever in the management, administration and/or sporting performance of any other club participating in a UEFA club competition.
- No one may simultaneously be involved, either directly or indirectly, in any capacity whatsoever in the management, administration and/or sporting performance of more than one club participating in a UEFA club competition.
- No individual or legal entity may have control or influence over more than one club participating in a UEFA club competition, such control or influence being defined in this context as:
- holding a majority of the shareholders’ voting rights;
- having the right to appoint or remove a majority of the members of the administrative, management or supervisory body of the club;
- being a shareholder and alone controlling a majority of the shareholders’ voting rights pursuant to an agreement entered into with other shareholders of the club; or
- being able to exercise by any means a decisive influence in the decision-making of the club.
5.02
If two or more clubs fail to meet the criteria aimed at ensuring the integrity of the competition, only one of them may be admitted to a UEFA club competition, in accordance with the following criteria (applicable in descending order):
- the club which qualifies on sporting merit for the most prestigious UEFA club competition (i.e., in descending order: UEFA Champions League, UEFA Europa League or UEFA Europa Conference League);
- the club which was ranked highest in the domestic championship giving access to the relevant UEFA club competition;
- the club whose association is ranked highest in the access list (see Annex A).
5.03
Clubs that are not admitted are replaced in accordance with Paragraph 4.09.5.04
This article is not applicable if any of the cases listed under Paragraph 5.01 happens between a club directly qualified to the UEFA Champions League group stage and one qualified for any stage of the UEFA Europa Conference League.