Tuesday 28 June 2022
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Chelsea in spot of bother after sanctions against Russian oligarch owner

Following the sanctions, Manager Thomas Tuchel said Chelsea FC’s future was uncertain, indicating that he would remain in situ awaiting more clarity

Chelsea FC, one of the most prized British soccer clubs, is facing an uncertain after its Russian oligarch owner Roman Abramovich — who was earlier trying to sell the club — was hit with sanctions for his ties with President Vladimir Putin. The sanctions, as part of the penalties that the British authorities imposed on Chelsea, halted the club’s proposed £ 3 billion sale ($ 3.9 billion), player transfers and merchandise sales.

Major sponsors have also distanced themselves from the club, the name of which took a dent due to its owner’s connections to the war in Ukraine.

The British government said yesterday that Abramovich was enjoying a “close relationship” with the Russian president and that he had benefited from “preferential treatment and concessions” from the Kremlin over the years.

The authorities froze the assets of the oligarch, as the Western media is referring to him as, alongside six other oligarchs named yesterday. There are restrictions on their travel too.

Chelsea caught off guard

The clampdown on Abramovich was largely expected of a government facing increasing pressure to toughen its stance on Putin’s inner circle.

Indeed, the 55-year-old billionaire appeared to anticipate the decision, embarking on a fire sale of his UK assets, including the club and a string of luxury properties, last week.

However, the London-based club, which on 10 March marked its 117-year anniversary, appeared to be caught largely off guard.

Following the announcement, manager Thomas Tuchel said Chelsea FC’s was uncertain, indicating that he would remain in situ awaiting more clarity.

“We take it day by day,” he told BBC Radio 5 Live. “I didn’t see that coming yesterday and I don’t know what is coming tomorrow.”

The club did not immediately comment.

What it means for Chelsea

Under the sanctions, the sale of Chelsea FC has been paused and the club is now subject to a special government license that strictly regulates what it can and cannot do.

Currently, the club can continue to play matches — as it did last evening — and undertake “reasonable travel costs” up to a maximum of £ 20,000. However, only season-ticket holders and those who have already bought tickets will be allowed to attend.

In the meantime, the club will no longer be allowed to transfer or loan players; broadcast and prize money has also been frozen. The official Chelsea club shop closed Thursday and some staff were partially laid off.

As for the ownership of the club, the government has said it will consider providing additional special dispensation to allow a sale to go through — as long as it does not benefit Abramovich.

It is unclear where the benefits of the sale, which could be more than £ 1 billion, would go, though observers suggest they could be donated to the humanitarian crisis in Ukraine.

The alternative — if Abramovich attempts to hold onto the club, it will likely result in a long, costly battle and potential further sanctions — appears unlikely given that he previously agreed to write off £ 1.5 billion in debts owed to him by the club and donate proceeds of the sale to the victims of the war in Ukraine.

Partners, sponsors walk away

The upheaval surrounding the club doesn’t appear to have dampened interest from prospective buyers, with reported bidders including British property tycoon Nick Candy.

However, it has seen sponsors and commercial partners distance themselves from the previously esteemed club.

Nike was today reportedly considering walking away from a £ 900 million, 15-year deal agreed with Chelsea in 2016. Such a move could see the Stamford Bridge club miss out on £540 million.

British telecoms network Three, the club’s principal shirt sponsor, confirmed yesterday that it was suspending its partnership worth an estimated £ 40 million a year.

The moves mark a major blow for the club whose revenues rely largely on broadcasts and commercial deals.

In the meantime, the sudden shock has raised questions from those who say greater due diligence is needed on foreign owners and sponsors of British Premier League clubs.

“The situation at Chelsea does demonstrate, yet again, why we need an independent regulator with really tough owners’ tests,” said British MP Tracey Crouch, who chaired a recent fan-led review into football governance.

Last week, Everton suspended all sponsorship deals with the Uzbek oligarch Alisher Usmanov, another of Putin’s allies struck by sanctions.

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