Saturday, July 20, 2024

Chelsea FC sale: Roman Abramovich sanctioned by U.K. government, assets frozen, future club ownership in doubt

Roman Abramovich has been named among seven Russian oligarchs sanctioned by the United Kingdom, throwing his plans to sell Chelsea into doubt.

Abramovich, who formally put the west London club up for sale earlier this month as the threat of sanctions loomed large, has been banned from undertaking any transactions with UK individuals and businesses, is unable to access his assets in the country and is not allowed to travel there. 

The 55-year-old has consistently denied any involvement with Russian president Vladimir Putin but the Treasury stated he “is associated with a person who is or has been involved in destabilising Ukraine and undermining and threatening the territorial integrity, sovereignty and independence of Ukraine, namely Vladimir Putin, with whom Abramovich has had a close relationship for decades.”

Chelsea have been granted a special licence under which they will be allowed to operate as a football club but the conditions on them are onerous. The sale of the club is now in doubt with a government sources at odds over the suggestion that they might allow a deal to be struck whilst the licence is in place. Any such deal would require special dispensation from the government and Abramovich, who would not be able to receive any funds from the sale, and a new licence.

Abramovich had previously said he would not ask for the $2 billion in debt owed to him to be repaid and that net proceeds of the sale would go to a foundation he would set up to help “all victims of the war in Ukraine”. That foundation would have to be replaced whilst the Chelsea owner would have to prove he received no funds from any sale, entirely writing off the sizeable sums owed to him. 

Initial bids had been submitted, including a joint-offer from Swiss bussinesman Hansjorg Wyss and American counterpart Todd Boehly, with several other parties having declared an interest.

In the meantime Chelsea will not be allowed to sell tickets for their games, meaning only season ticket holders can attend, and will be unable to register new signings or extend the contracts of current players. The Blues will also see their travel costs limited at just over $26,000 (£20,000) per game, a potentially significant logistical headache for their Champions League commitments, whilst stewarding and catering costs for games are capped at around $650,000 (£500,000) a match.

The “Russia Regulations” licence also gives provision for the payment of outstanding fees related to loan and transfer agreements made before today (March 10), meaning in practice clubs that are still owed money from Chelsea for past deals are entitled to chase it. The club can receive outstanding transfer fees, broadcast income and performance fees such as competition prize money but all those funds will only be made available to conduct day to day business.

Currently this licence expires on May 31 but “HM Treasury may vary, revoke or suspend this licence at any time.”

Meanwhile Chelsea’s kit sponsor Three have confirmed to CBS Sports that they are reviewing their sponsorship agreement with the club. Their deal is understood to expire in the summer of 2023 and at the time of its agreement in 2020 it was reported to be worth around $52.5 million.

Culture Secretary Nadine Dorries said: “Putin’s attack on Ukraine continues and we are witnessing new levels of evil by the hour. Today the Government has announced further sanctions against individuals linked to the Russian Government. This list includes Roman Abramovich, the owner of Chelsea Football Club.

“Our priority is to hold those who have enabled the Putin regime to account. Today’s sanctions obviously have a direct impact on Chelsea and its fans. We have been working hard to ensure the club and the national game are not unnecessarily harmed by these important sanctions.

“To ensure the club can continue to compete and operate we are issuing a special licence that will allow fixtures to be fulfilled, staff to be paid and existing ticket holders to attend matches while, crucially, depriving Abramovich of benefiting from his ownership of the club. I know this brings some uncertainty, but the Government will work with the league & clubs to keep football being played while ensuring sanctions hit those intended. Football clubs are cultural assets and the bedrock of our communities. We’re committed to protecting them.”

Chelsea travel to Norwich on Thursday night for a Premier League game and will return to Champions League action next week, facing Lille in France on Wednesday night in the second leg of their round of 16 tie. Their next home game against Newcastle is on Sunday after which they are due to play Brentford on April 2. The Bees have not sold out their away allocation — the next batch of tickets due to go on sale later on March 10 will not now be made available — but had already committed to taking it in its entirety.

“In light of the breaking news in relation to Chelsea FC, we are seeking clarification from the Premier League as to what this means for our away ticketing allocation at the match at Stamford Bridge on Saturday April 2,” a statement from Brentford said. “Prior to March 10 we made a contractual commitment to take our entire allocation of 3,000 tickets for this match and will do everything in our power to ensure our full allocation is distributed to Bees fans.”

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