This Is How Chelsea FC Affected After the UK Sanctions Against Its Russian Owner

Murad Jandali | 2 years ago

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Chelsea Football Club is facing a real dilemma that may shake the pillars of the club called “the pride of London,” which is considered the seventh most expensive club in the world, and the winner of the European Champions League in its last version 2020-2021.

This was after the UK government’s decision on March 10, 2022, to impose sanctions on the club’s owner, Russian billionaire Roman Abramovich, and to freeze his assets, as part of the sanctions on the oligarchs with ties to Russian President Vladimir Putin.

Abramovich, 55, had announced his intention to sell the club on March 2, after 19 years of owning it, but the unprecedented government measures imposed on him thwarted his quick plan to sell the club.

With no clear vision regarding the future of Chelsea FC, perhaps investors will reconsider the feasibility of acquiring this club based solely on wealth, without taking into account the club's achievements over recent years and its wide fan base.

 

Chelsea's Troubles

The problems of the current Champions League, Chelsea, continue with the sanctions imposed on its Russian owner, as the English Premier League, in a statement on March 11, 2022, announced that its board of directors removed Chelsea’s owner, Russian Roman Abramovich, from the position of director of the London club, according to what Reuters reported.

The decision comes after the UK Treasury issued sanctions on Abramovich, after his country Russia invaded neighboring Ukraine as a confidant of Russian President Vladimir Putin, despite his denial of these allegations.

The government stated in its statement that “a special license allows the practice of a number of football-related activities, and this includes permissions for the club to continue playing matches and other football-related activities, which in turn will protect the Premier League, loyal fans and other clubs.”

However, on March 12, the UK government retracted its decision to stop the sale of the club, and allowed Chelsea to complete the related procedures, provided that neither Abramovich nor Russia benefited from the profits of the sale, according to The Athletic.

It also allowed Chelsea to spend more money on holding the matches scheduled at its stadium, and it became 900,000 pounds per match.

It seems that Abramovich succeeded in convincing the UK government that he would donate all the money he would get from selling the Blues to a charitable foundation whose mission would be to provide assistance to the victims of the Russian military operation against Ukraine, which led the government to reverse its decision to stop the sale.

Chelsea's troubles had previously increased when Barclays Corporate Banking announced the suspension of its bank account on March 11, explaining that the reason for this decision was due to the fact that the institution needed time to evaluate the license granted to Chelsea to continue football-related activities, according to The Times.

“The club will not be able to work as an institution, especially since it has been prevented from selling club merchandise, in addition to match tickets, this means that only season ticket holders will be able to attend the matches in person,” the newspaper explained.

In turn, The Telegraph, quoting private sources, revealed that “a number of Chelsea players had given clear instructions to their agents to discuss the options available to them, with first-class lawyers.”

In its report dated March 11, the newspaper indicated that “players can terminate their relationship with the club if they do not receive their salaries for a period of two months, after a 15-day notice period.”

While The Sun newspaper indicated that “the sanctions imposed by the British government will be reviewed, next May, and if it becomes clear at that time that the club is under the responsibility of the administration, 9 points will be deducted from its balance, which may affect its participation in the Champions League in the next season.

On its part, Goal.com reported that “the telecommunications company (Three) for mobile networks called on Chelsea FC to temporarily suspend the deal sponsored by the club, which is estimated to be worth £40 million, including removing its trademark from the team's shirts and around the field until further notice.

It also asked Hyundai and Zapp to remove their trademarks from the team's shirts and from Stamford Bridge, and to temporarily suspend their deals, adding to the financial bleeding of the English club, which has a monthly wage bill estimated at £28 million.

The American company, Nike, refused to follow in the footsteps of Three, and decided to stand by the Blues, which are threatening to lose huge amounts of money, confirming its commitment to the contract signed in 2016, which extends for 15 years, which revives the Blues' treasury by £60 million per season.

In the latest developments in the case of the London club, the stands of Stamford Bridge were filled with fans who supported their club in the biggest crisis in its history due to the Russian-Ukrainian war, they held a banner bearing the picture of the Russian owner Roman Abramovich and wrote “Roman Empire.”

In the last match that Chelsea played against Newcastle on March 13 in the English Premier League, the stars of the London club appeared wearing the sponsor’s Three shirts despite the termination of the contract.

However, Media reports said that the club kept the name of the sponsor because it was not the right time to make new shirts.

 

Unknown Fate

Media reports, including the Mirror newspaper, reported that the Blues club is currently experiencing a stifling financial crisis following the British government's decision to suspend its sale after Roman Abramovich's properties were frozen, noting that the club will abandon private planes and five-star hotels.

On his part, Chelsea FC said in an official statement on March 10: “By virtue of its 100% ownership of Chelsea FC and its affiliated entities, Chelsea FC is subject to the same sanctions regime as Abramovich, but the UK government has issued a general license allowing Chelsea FC to continue certain activities.”

“We intend to enter into discussions with the government regarding the scope of the license,” the statement added.

“This will include seeking permission to amend the license in order to allow the club to operate as normally as possible. We will also seek guidance from the UK government on the impact of these measures on the Chelsea Foundation and its important work in our communities,” the statement said.

In this context, English journalist Sam Wallace of the Telegraph newspaper explained the meaning of the club's statement and wrote on his Twitter account: “Under the Russian regulations license to operate, Chelsea can pay players and staff salaries, pay the transfer fee due, spend a maximum of £500,000 for matches at their stadium and receive payments, although they will then be frozen.”

“The government license extends until May 31, and the government can change, cancel or suspend the license at any time,” he added.

“The license also prohibits Chelsea from spending more than £20,000 on any trip outside their home country, which could cause a problem for the English club in its away matches in the Champions League. The first of them is when he is a guest of the French Lille on Wednesday, March 16, in UEFA Champions League Round of 16 second leg,” he said.

In turn, UK Technology Minister Chris Philp MP announced that “under the current licensing terms, the club would not be sold, and that any bid to buy Chelsea FC would have to be made through the government.”

Philp MP explained in an interview with the British Sky News network that “in the event that there is a party wishing to buy the club, this buyer or the club will have to resort to the government and request that the terms be amended to allow the sale to take place.”

According to The Sun, it has become clear that Chelsea's license to continue playing in the English Premier League will not be renewed until after the end of the current season, by May 31, unless Abramovich agrees to sell the club without receiving any financial compensation.

 

Oligarch is Close to Putin

It is noteworthy that in a surprising step that came in conjunction with the Russian invasion of Ukraine and its repercussions on the world of sport, the Russian Roman Abramovich, Chelsea’s owner, announced the handover of the management and care of the club to the Club Trustees Foundation, according to a statement published by the club on February 26.

From the first hours of the start of the military operation on Ukraine, Abramovich faced calls to strip him of possession of Chelsea, after documents linked him to the regime of Russian President Vladimir Putin.

Labor MP Chris Bryant questioned that no action had been taken against Abramovich, after revealing a leaked document dating back to 2019, confirming his association with illegal financing and corruption cases.

Abramovich admitted earlier that he paid the money for political influence, to confirm the information of the British press, which put his name on a list of 35 rich Russians who support Putin.

Abramovich bought the London club in 2003 for an amount estimated at £140 million, according to ESBN, and the current offered price (£3 billion) is about 20 times the purchase price.

Because of his investments, the club achieved unprecedented achievements throughout its history during this period, as Chelsea won 19 championships, including the English Premier League (5 times), the English Cup (5 times), and the European Champions League (twice).

Russian billionaire Roman Abramovich is one of seven Russian oligarchs who have been sanctioned, including his former business partner Oleg Deripaska.

The Russian billionaire has a fortune of approximately $14 billion, according to Forbes magazine, and he was ranked 142nd in the magazine's 2021 list of the world's richest men.

 

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