by Tony Attwood
Untold Arsenal started over 14 years ago. We’ve published over 11,000 articles and over 249,000 comments.
And I don’t think we have ever had a moment like this before. For, as you may have heard Roman Abramovich is now banned from all transactions with individuals and businesses based in the UK, due to his links to a metals firm that may have provided steel to the Russian military to build tanks and his controlling interest and shareholding in the steel manufacturing and mining company Evraz Plc – which is being delisted from the stock exchange.
He is thus considered to have been involved in destabilising Ukraine while obtaining a benefit from and/or support of the Government of Russia via the construction, defence and extractive sectors. He is also cited as having received preferential treatment and concessions from the Russian President and government.
So what does that mean for Chelsea, and for Arsenal? Chelsea can’t sell any further tickets for matches, although season ticket holders can still get in. Chelsea can’t be sold or given away either. TV stations will still be able to show Chelsea games, but I suspect if any do, they will do irreparable harm to themselves.
Also, Chelsea can’t do any transfer or loan business, and any money they get in from broadcasters or from the sale of merchandise will be frozen in a government-held account. It can’t do any repairs on the stadium and presumably (although I can’t see if this is spelt out) they won’t be able to sell season ticket renewals for next season unless the ban is lifted. The club’s shop is closed.
In reply, the Chelsea Supporters Trust demanded that they be involved in discussions concerning the impact that this will have on the club. I would suspect they have a very limited chance of that coming to pass.
The Telegraph, considering the matter has said that, “Chelsea’s financial ecosystem is heavily reliant on handouts from Mr Abramovich.” This of course is because Chelsea’s stadium is not only roughly two thirds the size of Arsenal Stadium, it doesn’t have anything remotely like the corporate facilities that were built into Arsenal’s current ground, and indeed which Abramovich was planning to put in Chelsea’s new ground before he pulled out in what seemed to be a fit of pique.
Chelsea might however be able to repay loans made by Abramovich by paying them to Camberley International Investments Ltd, which is registered in the British Virgin Islands and so outside UK control.
In many regards, this won’t make any difference to Mr Abramovich personally since he hasn’t been going to Chelsea games for a long time. And as an Israeli citizen, he is probably still able to travel freely on his Israeli passport.
So what does this mean to Chelsea?
Chelsea recorded a loss of around £150m for the year ended 30 June 2021 despite becoming European champions. I don’t think Chelsea can borrow from its banks, and indeed whether its banks will continue to think it is a safe place to lend money to, and borrowing is now very much what Chelsea need to do to keep paying players etc, since it is losing money day by day. That didn’t matter in the past when the owner would keep ploughing money in. But now they are a bit stuck.
Certainly with the government’s imposition of sanctions no bank or other organisation in the UK is likely to want to lend them anything even if they can find a way around the regulations, and overseas ventures are banned from supporting them. Indeed even getting players to away games could involve some difficulties. Transfers will be screwed.
What will be interesting to see will be the supporters’ reactions to this. As we know some supporters (by no means all, but some) disrupted the minute of applause in recognition of the suffering of Ukraine before the away game to Burnley with chants of Abramovich’s name. I wonder if they will do that again and if the League will do anything about it if they do. The League could impose a behind-closed-door rule.
It would also seem to me that Chelsea’s credit rating must currently be rock bottom, since they spend far more than they earn, and have no realistic way of cutting the gap. Worse, there is no sign of Russia pulling out of Ukraine, so there is no obvious end in sight.
A football club cannot renege on its debts and stay in its league – that is fundamental, and Chelsea has huge debts. The £1.5bn to £2bn that they owe to Abramovich is not an issue, it is the wage bill (which is bigger than that of Liverpool or Manchester United) and the day to day running costs of the club, plus the money that they owe others (such as the stage payments on transfers), that is the problem.
Roughly speaking Chelsea lose about £3m a week and that means anything in the bank is going to be used up fairly quickly. Funding for this loss is provided by Fordstam Limited, a company owned by Abramovich and Fordstam can’t now put any more money into the club.
The Guardian adds, “If new contracts cannot be handed out then Chelsea will lose Andreas Christensen, Antonio Rüdiger and César Azpilicueta on free transfers. Chelsea’s women’s team could also lose Ann-Katrin Berger, Maren Mjelde, Jonna Andersson, Ji So-yun and Drew Spence as free agents.”
I wonder if Abramovich can have a word with Putin to get the war stopped.
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