Chelsea are to take what will be perceived as the first significant step towards leaving Stamford Bridge for a new 60,000-seat stadium, by seeking to buy back the freehold for the land on which their home of 106 years is built.
Shareholders at Chelsea Pitch Owners plc, a company founded in 1993 to safeguard the then financially vulnerable London club's future at Stamford Bridge, will receive on Tuesday details of an offer to repurchase the pitch, the turnstiles and the freehold for the land on which the stadium's four stands are built. The company bought the assets for £10m in 1997, with the aid of an £8.5m loan secured from Chelsea's then holding company. The club are offering effectively to write off that debt and buy back the freehold for an identical £1.5m.
While Chelsea are at pains to insist that no dialogue is under way with developers over potential new sites, there have been tentative discussions in the recent past over the availability and viability of sites at Battersea Nine Elms, Earl's Court and Olympia, White City and Imperial Wharf to house a ground that can better Arsenal's Emirates Stadium in terms of capacity and match-day revenue.
Chelsea are aware of the difficulties in increasing the 41,800 capacity of Stamford Bridge and they would be better positioned to react to a suitable area becoming available once they have secured the land on which their home since 1905 stands. They would need to sell the stadium for redevelopment in order to part-fund the purchase of land for any new ground and the construction costs.
The value of the Chelsea FC site is often compared to the former Chelsea Barracks, which sold for close to £1bn in 2007, and Roman Abramovich, the club's owner, may be hoping to achieve a similar value. But property industry sources warned that Stamford Bridge is more constrained by neighbouring housing and railway infrastructure than the barracks site, which, they pointed out, was also sold at a premium during the height of the property and credit boom.
Chelsea expect fierce opposition within CPO, a company which was formed to ensure Stamford Bridge never fell into the hands of property developers – the ground had been sold to Marler Estates plc (later Cabra Estates plc) in 1984, only for that company to go into liquidation eight years later – and which may oppose the possibility of the club leaving their only home.
The Chelsea chairman, Bruce Buck, is hopeful the potential long-term benefits can secure an agreement. "Some shareholders will not react positively and there will be a group of fans who consider this to be a precursor to Chelsea moving and they will not want Chelsea to move," he said. "At the moment we have no discussions ongoing with any developer and we still have not made the decision that, yes, Chelsea definitely want to move. But, just like any business, we have at least to be prepared for a move if something right comes along.
"This [buying the freehold] is something we should have done five years ago when we were clearing up the financial housekeeping of Chelsea, like the Eurobonds issue and other kinds of financing that we had on the books that really weren't appropriate for a club now wholly owned by Roman Abramovich." Asked whether buying the freehold represented the only way Chelsea could move to a new home, Buck said: "That's the bottom line. We could not move unless the club had the ability to redevelop this site. That would be a precondition to getting the money to help us move."
Notification of an extraordinary general meeting, to be held on 27 October, has been issued to the 12,000 CPO shareholders. The club will need to secure the support of 50% of those in attendance if their offer is to be accepted. There remains, therefore, potential for the plans to be blocked at an early stage. The fact that shareholders are seeing no return on their investment – the shares cost £100 each in 1997 – could prompt further opposition.
Chelsea have indicated that 10% of seats in any new stadium would be available to families and supporters under 21 and that no relocation would take place before 2020, unless within a three-mile radius of Stamford Bridge.
"There are only 'x' number of sites in London that we would consider and, by 2020, we expect those sites to be gone," Buck said. "So we would have no restrictions after 2020 in terms of where we could move. But we are confident that most of these shareholders are fans of Chelsea and will understand and approve what we're trying to do."
