Lavish spending, backed only by Roman Abramovich’s investment, funded Chelsea’s 21 trophies in his 19 years as owner. Now there are fears the Premier League club could run out of money after the UK government sanctioned the Russian oligarch and froze his assets.
A team that won the Champions League last year and were crowned world champions by FIFA a month ago have now seen certain banking facilities frozen with officials unable to use company credit cards while that Barclaycard assesses what is permitted by government rules.
Chelsea are only allowed to continue to operate and play games under government-defined conditions through a special licence, with spending caps and a ban on ticket sales, which will affect flows cash flow from a club whose latest published payroll is nearly ￡28 million ($36 million) per month.
Chelsea officials held talks with the government on Friday to discuss how the club can continue to pay staff, operate Stamford Bridge on matchdays and ensure the club can be sold.
Abramovich had already announced his intention to sell his trophy last week before being sanctioned on Thursday for his ties to Russian President Vladimir Putin following the invasion of Ukraine.
The Raine Group, an investment bank, is working on the sale process on behalf of Abramovich, who remains owner of Chelsea.
He originally hoped to divert the proceeds to a new foundation for those affected by the war in Ukraine.
However, the government would only agree to a sale that does not benefit Abramovich as the government tightens the screws on influential people it sees as empowering for Putin’s regime.
There are potential buyers waiting in the wings, including British property investor Nick Candy and Todd Boehly, co-owner of MLB’s Los Angeles Dodgers.
“I would describe Chelsea as a struggling asset,” said Rob Wilson, a football finance expert from Sheffield Hallam University, “and the association they have with the owner is what afflicts them.”
The only positives for the club on its second day as a sanctioned entity was that no sponsor suspended deals after shirt backer communications company Three requested that their logo be removed.
Jersey manufacturer Nike had not yet stopped its sponsorship.
Another sponsor, hotel search website Trivago, said it would remain the training kits sponsor.
“We look forward to a transition of ownership as soon as possible and want to support the club in this process,” Trivago said. “We will provide any updates to our business relationship as and when appropriate.”
The statement condemned the “unprovoked and catastrophic invasion of Ukraine” without naming Russia.
Travel booking is an imminent challenge for Chelsea. Travel to France to play Lille OSC in the Champions League next week has already been purchased, but travel expenses for games after that have been capped at £20,000 by the government.
Chelsea can also spend just £500,000 on matchdays – starting today at home to Newcastle United in the Premier League, which the club have won five times under Abramovich.
The league title had only been won once in the 98 years before Abramovich bought the club in 2003.
There have been cumulative losses of around £900million in nearly two decades of Abramovich ownership, while annual revenues have fallen from £110million in 2003 to £435million over the course of the year. last exercise.
The way Abramovich backed the Blues with his money to turn them into a force, partly for personal status, is similar to how other oligarchs paid WNBA players such as Brittney Griner $1 million. to play for their company-sponsored teams in Russia.
Chelsea were dependent on the £1.5billion loans Abramovich injected into the club, which he said he would not ask to be repaid.
The last reported cash reserves for Chelsea’s parent company were just £17.7million.
The club can’t even sell merchandise anymore, with its store closing hours after the sanction was announced on Thursday.
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