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Sunday, October 2, 2022

Could this be the end for Abramovich’s Chelsea Football Club?

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Who could have imagined that Russia’s invasion of Ukraine may have caused severe consequences on the fortunes and assets of Russian billionaire and owner of Chelsea football club, Roman Abramovich, after the UK government banned him?

Abramovich has come under severe sanctions in the last few days. On Saturday, the Premier League board disqualified him as a director at Chelsea.

“Following the imposition of sanctions by the UK Government, the Premier League Board has disqualified Roman Abramovich as a Director of Chelsea Football Club,” Premier League statement reads.

Read Also: X-raying implications of Abramovich’s sanction on Chelsea football club

“The Board’s decision does not impact on the club’s ability to train and play its fixtures, as set out under the terms of a license issued by the Government which expires on 31 May 2022.”

This means that Abramovich’s efforts to sell the English Premier League club Chelsea have effectively been suspended.

Abramovich recently put Chelsea up for sale, amid ongoing pressure on Russian business and sports interests due to the war in Ukraine.

Abramovich values Chelsea at £3billion and US-based merchant bank Raine Group was appointed to manage the sale.

“Abramovich is associated with a person who is/has been involved in destabilising Ukraine & undermining/threatening the territorial integrity, sovereignty & independence of Ukraine, namely Vladimir Putin, with whom (he) has had a close relationship for decades.” The UK statement reads.

UK prime minister, Boris Johnson, added: “There can be no safe havens for those who have supported Putin’s vicious assault on Ukraine. Today’s sanctions are the latest step in the UK’s unwavering support for the Ukrainian people. We will be ruthless in pursuing those who enable the killing of civilians, destruction of hospitals and illegal occupation of sovereign allies.”

Also, Abramovich and Chelsea may lose millions in sponsorship deals as mobile phone network and shirt sponsor, Three, announced that it has suspended its £40 million deal with the club. Three also demanded its logo be removed from players’ shirts.

“In light of the government’s recently announced sanctions, we have requested Chelsea Football Club temporarily suspend our sponsorship of the club, including the removal of our brand from shirts and around the stadium until further notice,” Three’s statement reads.

“We recognise that this decision will impact the many Chelsea fans who follow their team passionately.

“However, we feel that given the circumstances, and the Government sanction that is in place, it is the right thing to do.”

In a similar development, Nike is also considering suspending their sponsorship agreement with Chelsea.

The US sports brand reached a 15-year agreement with the Blues worth £900million in 2015 and were they to suspend this deal this would cost Chelsea £540million over the coming years.

Another company considering its future as a sponsor of Chelsea is Hyundai. The South Korean automobile company agreed on a five-year deal with Chelsea in 2018 worth 10 million pounds a year, and they have issued a statement.

“Hyundai has become one of the strongest partners in football over the years and the company supports the sport to be a force for good,” read the statement.

“We are currently assessing the situation with Chelsea.”

Meanwhile, Zapp, a grocery start-up application, have also stated that they are monitoring a decision, and will decide on their ties with Chelsea.

Chelsea have 16 sponsors in total, such as Trivago, the Blues’ training kit and warm-up kit sponsor, as well as Yokohama Tyres, Vitality, Hublot, Cadbury and Singha, among others.

Out of all these agreements, the biggest is Nike, as the sports brand contributes around 56 million pounds of Chelsea’s income yearly.

Chelsea’s several accounts and credit cards were suspended temporarily by the UK government on Friday.

Abramovich had all his British assets frozen barring Chelsea, with the Premier League club allowed to continue with “football-related activities”.

Abramovich bought Chelsea in 2003, turning the perennial also-rans into serial winners with unlimited transfer funds after he became rich on the chaotic privatisation of state assets in 1990s Russia.

Abramovich put Chelsea up for sale on March 2, pledging to write off the Blues’ £1.5 billion debt and invest all sale proceeds into a new charitable foundation to aid victims of the conflict in Ukraine.

Meanwhile, Chelsea manager, Thomas Tuchel has stated that, despite all the restrictions, his side will not stop competing.

“As long as we have enough shirts and a bus to drive to the games we will be there and will compete hard,” Tuchel said.

Chelsea put their off-field turmoil to one side to beat Premier League strugglers Norwich 3-1 on Thursday.

 

 

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