How might the sale of Chelsea proceed? An Untold perspective.

By Tony Attwood

Last November,, told us that Chelsea could spend £241m in the winter transfer window while remaining inside the financial fair play restrictions.  It seemed a huge amount of money, but of course I always have complete confidence in Football London as a source and the ability of FFP to keep matters under control.  (Something in that last sentence might not be true).

Arsenal spent £132m net in that window; Chelsea in contrast spent £3.1m.

And for the last set of accounts from Chelsea revealed a £145.6million loss and of course the eternal note attached to the accounts to the effect that Chelsea is “reliant on Fordstam Limited for its continued financial support”.

Fordstam is the company owned by Abramovich which has constantly kept the club running at its recent level, buying top players, paying high wages and sometimes selling players off as well.  They haven’t done too well in the league of late by their recent standards (3rd, two 4ths and 5th) but they won the Champions League so I suppose that’s ok.

Now the fans of Chelsea might well be looking backwards to the past policy and expecting, or at least hoping for, “more of the same please,” as the club changes hands.

But there is a second model for running a club that could be adopted at this point, and that is the Glazerian model.  The Glazers you might recall bought Manchester United with borrowed money, and then once installed as owners borrowed money from the club at no interest in order to pay off the loans taken out to buy the club.   (As with all crazy financial dealings within capitalism this process is given a fancy name so that the uninitiated just think it is an ok process – in this case, it is called a leveraged buyout).

So although Chelsea might well be sold “debt free” it will still be sold, and the estimated price is around £2.5 billion.  Given that Abramovich paid £140m in 2003 that’s a fairly nifty profit for a debt free enterprise even if the ground isn’t up to much.  No wonder he’s not bothered about getting his loans back if he’s making that sort of profit, although of course we only have the media’s word for all this).

But after spending £2.5 billion (or even £2 billion to take a lower estimate) to buy the club I wonder how much more the new owners will want to put into buying players.   Which is why I mention the Glazerian model especially given the smallness of their ground, and its lack of the sort of corporate facilities that can be used all the week through which Arsenal Stadium has.

Indeed as the Guardian pointed out, even the billionaire duo of Hansjorg Wyss and Todd Boehly are unlikely to follow Abramovich’s example in terms of financial support.

In the interim Chelsea have an identity problem – that being the identity of the new owners – and thus a lack of certainty as to what sort of club Chelsea will become.  Uncertainty is what players don’t like – top players like to join clubs doing well and which have clear continuity.  That’s why Arsenal have found buying certain players so tough, after having three managers in quick succession.

Furthermore, Abramovich’s name was also a very much a positive factor at Chelsea when it came to recruiting players, because with him in the background, negotiations over salaries and bonuses were relatively benign.

Likewise, at Chelsea, any manager who wasn’t up to scratch could be moved on at once because there were always funds to pay off the rest of the salary and pay even more to the next one.   And there was the stability of having our old chum Petr Cech (technical and performance adviser) at the club and the Chelsea director Marina Granovskaia.

But there was also a build-up of a dodgy reputation.  The departure of Conte led to two employment tribunal cases, both of which Chelsea lost on the grounds of unfair dismissal.  Then there was the infamous Eva Carneiro case which didn’t do the image of Chelsea much good either.  Dr Carneiro ran claims against Chelsea and its manager for constructive dismissal, harassment and sex discrimination and was offered £1.2 million to settle the case.  She turned it down but later settled – the general assumption was that she got substantially more – Chelsea willing to pay in order to avoid further revelations in court.

Then there was the case in which Chelsea were banned from signing players for two transfer windows as Fifa found them guilty of breaching the rules on the signing of players aged under 18.   The cases involved 29 (yes twenty-nine) underage players.  And this was not the first time they were in trouble in this regard.

The club were eventually fined around half a million pounds and told to regularise their policies, (policies which had been highlighted several times on Untold you might recall).  Chelsea denied everything although their academy had been under investigation for potential transfer rule breaches since 2016.

But despite all these tribunals and court cases, Chelsea have had one enormous ally since 2003: the English media.  For what the media have been very good at doing is isolating each case so that no general picture of misdemeanours arises and the owner looks to have had in place jolly decent chaps doing a very good job – which they have been in terms of winning stuff.  It’s just those pesky regulations that have been a bit of a problem.

Still, in the UK, with the media on your side there’s no need to worry.  The question is, can the current Chelsea owner sell that media goodwill onto the new owner?  That’s a more tricky one.  Quite a bit of wining and dining by flunkeys will be seen, I would imagine.  It’s going to be a good time to be a football correspondent for a major “outlet”.

11 Replies to “How might the sale of Chelsea proceed? An Untold perspective.”

  1. When the Sun has a frontpage pic – yesterday – of Abramovitch with the word ‘Offski” across his visage you might be thinking the UK government will seize the Stamford Bridge ground, the yachts, the penthouse, the Cheyne Walk flat, as the assets of a ‘Putin enabler,’ as Navalny called him, but no, with Premiership football, dirty money, the PGMO, what the rules say, what the law says, what the practice is, are two realities existing simultaneously.

    The Ukraine is starting to resemble Aleppo.

  2. the chavs are owned by a Russian criminal. Chelsea football club should be closed down due to its close ties to the Russian mafia

  3. What I don’t get is that the bit about the £1.5 billion in loans. If the Russian has said he doesn’t want the money back, isn’t this the equivalent of someone just giving the club £1.5 billion? How does that fit in with FFP rules?

  4. @Mickey,

    absolutely my point as I commented on another post. That is a huge rebate.
    If it is not paid to the seller, it does mean that over the years, Chelsea have spent 1.5 billion more then their revenue which is IMHO not within the parameters of FFP.
    But then I’m no specialist. Still it adds to 75 million per year or something like this, Quite a lot of money, year after year don’t you think ?

  5. The other side of the bridge.

    Time was when most Arsenal fans had no idea who were members of the Arsenal board of directors. The name of the then chairman (Peter Hill Wood) became known to us when announcing that Terry Neill was leaving the club and later announced the arrival of George Graham as the new manager.

    The arrival of David Dean to the Arsenal board went I think almost unnoticed by the majority of Arsenal fans. However he was to become known to the ‘Arsenal World’ for being instrumental in bringing Arsene Wenger to the club.

    Having brought a successful manager to the club David Dean wanted Arsenal to compete off the pitch with the money of the wealthy and to this end he introduced to the club Alisher Usmanov with his few billion golden Roubles some of which he let it beknown he would pour into the club. (This was already happening with Russian wealth across the ‘bridge’ at what had become known as Chelski.)

    However for his efforts the Arsenal Board said ‘No’ and David’s vision and position with the club returned to that of an fan in the Stadium.

    To day as this article does we look across and the Bridge’ and wonder what is going to happen to Chelski soaked as it is in Russian wealth.

    On our side the bridge the directors sold out to a billionaire American who promised not to interfere with the football side of the club that is to say not to be involved with players etc.
    He has been true to his word. Unlike his Russian counterpart at Chelski he has not put money into the club. There are reports of him taking money out of the club. What the truth of this is I don’t know.

    The latest report that I have found is that the club has made a loss of around two hundred million primarily as a result of Covid.

    If what I have read is true, the club’s owner is lending the club 50 million (I presume dollars) which is to be paid back in two years.

    The question is which side of the ‘Bridge’ do you want the club to be on?

  6. Mikey I think this is the big issue for Chelsea and FFP, but I rather suspect that there might be something within FFP which allows for rules to be broken within “special circumstances”.

  7. @Charles Veritie,

    “Unlike his Russian counterpart at Chelski he has not put money into the club”

    Where did the money for all the transfers last summer to spend more then any other club in the PL come from ?

    I believe that your statement is wrong.

    As for your question about the side of the bridge, ours is the one I feel best about.

  8. What you have to remember lads is no matter what Chelsea do financially, how many times they contravene standards of common decency, (Misogyny, racism, trafficking) or engage in mass pitch brawls (Spurs, Leeds, Leicester to name just 3) Chelsea fans will have non of it.

  9. And as if simply to prove the point:

    “Chelsea manager Thomas Tuchel blasted his own fans for singing Roman Abramovich’s name during a minute’s applause for Ukraine before Saturday’s 4-0 win at Burnley.

    Fans on all sides at Turf Moor had stood to applaud before kick-off as part of a league-wide campaign to show support for Ukraine following the Russian invasion of the country.

    Yet some Chelsea fans interrupted the applause to sing the name of their Russian oligarch owner Abramovich, who has announced he is looking to sell the club”.

    Well what do you expect ? Without him the one pound club would still be bouncing up and down divisions.

    Embarrassing joke of a club.

  10. Zedsaunt-Our Middle Eastern Expert. Tell us about the chemical attack in Douma if you may?

  11. Charles Veritie- Didn’t Dein bring Kroenke to the club before Usmanov? Dein was “escorted” out of the club in April 2007. It appears that non-disclosure agreements may have been enforced, because of the silence from various parties regarding the rift between Dein and Danny Fiszman.

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