For somebody who has spent so much of his life seemingly in complete control of every aspect of it, things appear to be unravelling fast, and uncomfortably, for Roman Abramovich.
Such is the pressure mounting on the UK Government to sanction him for his links to president Vladimir Putin, the Russian billionaire made a statement on Saturday indicating he was handing over “stewardship and care” of a club he bought in 2003, and has spent millions turning into a global football giant, to the charitable foundation’s trustees.
But lawyers say it means nothing in legal terms, and that while he retains his shareholding of the club it will be considered a UK-based asset that can be frozen. And where that unprecedented event leaves Chelsea is a place football has never visited but would have potentially chaotic consequences.
So the transfer of power that wasn’t a transfer of ownership on Saturday feels hastily organised, with not as much due diligence as someone who has accumulated such vast wealth is used to.
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The idea is that their role would still be minimal. There are perhaps a thousand decisions made at Chelsea each day but Abramovich does not get bogged down in such detail. There are maybe up to three occasions a year when the board of directors wish for the owner’s guidance, perhaps on the issue of whether a substantial amount of money should be spent on installing rail seats, or on the next lucrative, long-term sponsorship agreement.
Those are the sorts of occasions the trustees would be called upon to offer direction, if enough agree to take “stewardship” of the club and it is cleared by the Charities Commission, which has launched a probe. It could take several weeks for the details to be finalised and if it does not work a new strategy will have to be formulated.
Meanwhile, Abramovich is coming under increasing pressure. He is the most high-profile Russian oligarch in England and many want him to face sanctions. Labour MP Chris Bryant is the most vocal exponent and has said he will continue calling for Abramovich to be sanctioned until he denounces Putin and Russia’s invasion of Ukraine.
Key questions on Chelsea’s future answered
What happens to Chelsea if Roman Abramovich’s assets are frozen?
According to lawyers, despite the statement released on Saturday suggesting Abramovich was handing “stewardship and care” over to the charitable foundation trustees, it has no legal meaning and Chelsea remains one of his UK-based assets. Therefore, if he is sanctioned by the UK Government for links to the Russian state and his assets are frozen, Abramovich would be unable to sell the club, withdraw money from it or inject money into it.
What are the chances of Chelsea ceasing to exist as a football club?
Virtually non-existent. While they have been bankrolled by Abramovich (he has lent Chelsea £1.5bn since buying the club in 2003) it still generates hundreds of millions of pounds. But, in terms of competing at the highest level of English football, becoming a frozen asset would leave the club in limbo and would be likely to force a major change of approach. It is hard to see how they could compete with the likes of Manchester City and Newcastle in the transfer market.
How much is Chelsea worth and could someone buy it?
Chelsea are valued at about £1.6bn (considerably more than the £300m the Saudi Public Investment Fund paid for Newcastle United) and are considered one of the most prized properties in global football. Clubs of Chelsea’s stature rarely become available and there would be a clamour to buy the club. As of Tuesday afternoon, i was told Abramovich remained uninterested in selling.
Experts do not believe that Saturday’s statement will in any way protect Chelsea should their owner’s assets be frozen.
“There’s no such thing as stewardship, there’s no evidence the shares have changed hands, there’s no evidence the board has changed, so from a purely technical and legal perspective nothing has changed,” Danny Davis, partner and head of insolvency at leading law firm Mishcon de Reya, tells i.
Kieran Maguire, football finance lecturer at University of Liverpool, adds: “As soon as it became evident he’s not relinquishing his shareholding, Chelsea remains his asset and if you take a look at what it says in the accounts he’s the ultimate owner of the club and that’s not changed.
“Chelsea would fall under the remit of UK-based assets, which could be frozen by the UK Government. And what then happens? It doesn’t mean the UK Government is going to take control of it, it would presumably limit what he can do with it.
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“The nature of freezing money is you can’t bring it in and take it out. Could he find a buyer? Yes he could. Would he get paid for it immediately? We don’t know. That would be in the hands of the lawyers. But the Government could say ‘we’re freezing his assets, that means we’re not going to allow him to liquify his assets and take cash out of the country until Putin’s murderous activities are terminated’.”
The Premier League will be watching the situation anxiously. Buyers, particularly investors in America, are interested in purchasing what is considered one of the world football’s best assets, due to its west London location, massive global fanbase, the valuable stadium and squad of players. But if Chelsea becomes a frozen asset, Abramovich would not be able to sell it, nor take money out or inject it into the club.
“Since he acquired Chelsea he’s certainly not had a financial return on his investment,” Maguire says. “Chelsea have lost more money than any other club in the history of the Premier League. He’s lent the club a huge sum of money. It appears to be a trophy asset.”
Abramovich has loaned Chelsea around £1.5bn and whether or not the club could continue operating without his input would be a matter of concern for the Premier League.
“There are two definitions of solvency,” Davis says. “One is balance sheet, assets over liabilities. One is ability to pay your debts as they fall due. I don’t think there’s any suggestion the loan in the short-term would be called in and Chelsea couldn’t afford it. The Premier League might be thinking: what happens if the situation changes? The Premier League would want to ensure Chelsea can fulfil its obligations, and that includes maintaining solvency.”
How the Government decides to treat Abramovich could have enormous consequences for one of the country’s most successful clubs.
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