On Chelsea FC’s 117th birthday, the United Kingdom UK government announced sanctions on its owner, millionaire Roman Abramovich as part of its response to Russia's invasion of Ukraine. Abramovich, who has had his assets frozen, including Chelsea, did put club up for sale after the threat of sanctions was raised.
Earlier, Abramovich had handed over stewardship of the club to its trustees, before putting it up for sale. However, currently, a special licence allows the club to operate with restrictions till 31 May, which means the players can continue with the season and get paid too, but club won’t have all the privileges afforded to them.
Abramovich, who bought Chelsea for £140 million in 2003, has always denied links to Putin's government, however the UK government had other views as shown by the Treasury's Office of Financial Sanctions Implementation.
"Abramovich 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," it read. "This association has included obtaining a financial benefit or other material benefit from Putin and the Government of Russia."
So, in light of these sanctions on Roman Abramovich, what ramifications does it have on Chelsea?
What Happens to Selling Chelsea?
Early in March, Abramovich confirmed he was looking to sell the club, with proceeds earmarked for victims of the Ukraine war through a yet-to-be-named charity.
As of now the process to sell the club becomes more complicated, as Abramovich has to first apply for a licence to permit a sale. The UK government too is, reportedly, willing to make a further addition in the special licence to allow a sale.
However, the sale will only be allowed once there are solid assurances that Abramovich does not stand to benefit from any of the proceeds of the sale in any way whatsoever.
Abramovich had instructed the American investment firm Raine Group to seek £3 billion, which experts believe is likely to drop in the current situation.
However, the exact role the government will play in the sale is not clear yet and will be known only after the licence for sale application is submitted.
Contracts, Merchandise, and Sponsors
Chelsea’s football teams will continue with the remainder of their season, but the club cannot recruit new players or renew contracts of the current players. The future of the players on loan too is under a cloud, but those talents who have long-term contracts could become a prominent fixture in the line-up soon enough, under the current situation.
Outstanding payments, such as payments for players which are staggered over a period of time, will continue undisturbed as long as the club can afford it. Currently, the club will get paid from broadcast and sponsorship deals and the money will be frozen as well, however, it can be utilised for employee wages, travel costs, taxes, payments to other clubs and matchday logistics. Chelsea cannot sell any merchandise either nor can they accept any bookings for the foreseeable future.
Meanwhile, sponsors have reacted negatively to the situation with Three, the main shirt sponsor with a deal worth £40 million yearly, temporarily suspending their agreement and asking for their logo to be taken off all kits, advertising hoardings at Stamford Bridge and at the club's Cobham training base. Hyundai, who have a deal of around £10 million yearly, are "currently assessing the situation," as is the official partner Zapp.
The situation is pretty much the same for the managers of the Chelsea teams. In terms of existing contracts that need renewal, the club faces quite a dilemma as Cesar Azpilicueta, Antonio Rudiger, and Andreas Christensen are all free agents this summer, while among Chelsea Women, Ji So-yun, Maren Mjelde, Jonna Andersson, and Drew Spence are all affected as well.
"Maybe the worry is more to find enough shirts that we can play in, with the sanctions," Tuchel added. "But as long as we have enough shirts, and as long as the bus is full of fuel, we will arrive and we will be competitive. This is what everybody can be sure of and this is what we demand of ourselves and when it's a big storm, you dig in, you are all together and then you stay strong and go through it.”
"But messages for peace can never be wrong."
Understandably, Chelsea is on a shoe-string budget going forward for the rest of the season, and could go into administration only if they can’t foot their bills.
All of which further raises questions about the future of players and coaches at the club. In short, the club cannot generate fresh revenue because the owner can benefit from that, in theory, but the club can continue to play their games and pay the staff.
On Friday, Chelsea's credit card facilities have been temporarily suspended while banks assess the implications of sanctions imposed on Russian billionaire owner Roman Abramovich. That is likely to leave the club with a huge shortfall, with their monthly wage bill amounting to GBP 28 million a month.
Where Do the Fans Come In?
All season-ticket holders can attend the home games and all tickets sold before 10 March will be honoured.
And with no tickets being allowed to be sold, it is likely that Chelsea fans can’t go for away games either, unless they buy tickets from the home team in question.
For non-season ticket holders, it could unfortunately be like the days of football during early stages of the pandemic, when the games were played behind closed doors.
The situation with the FA Cup and UEFA Champions League, and the fans making their presence felt over there, is still unclear. It is also not very clear as to whether Chelsea can have the fans in the stadium if they make the tickets free of cost.
And the Team in Competition?
While the fans can’t come to stadium, Chelsea will of course continue to play their games for the rest of the season. However, the small issue with the away games is that the budget has been capped at £20,000 per team per match for travel to and from matches. The cap is likely to be too low to allow normal operations.
The club is limited to £500,000 in the cost of staging a home game.
(With Inputs from ESPN and BBC.)
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