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Chelsea’s owner, Roman Abramovich, has made the “very tough” decision to sell the club, but the uncertainty surrounding the club is far from finished.
The 55-year-old attempted to distance himself from any potential personal sanctions imposed by the UK government in response to Russia’s invasion of Ukraine last Saturday by announcing the night before Chelsea’s Carabao Cup final loss to Liverpool that he was handing over “stewardship and care” of the club to the Chelsea charitable foundation. When it became clear that an ambiguous statement would not be enough to protect the club — and the trustees involved expressed their reluctance to take on such a burden — Abramovich issued a second statement just over an hour before Tuesday’s FA Cup fifth-round win at Luton Town, confirming his 19-year tenure would be ending.
“As I’ve already mentioned, I’ve always made choices with the club’s best interests in mind,” it read. “In light of the present scenario, I have decided to sell the club because I feel it is in the best interests of the club, its fans, staff, and sponsors and partners. The sale of the club will not be rushed, but will take place in accordance with the law.”
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That process has now started in earnest, with Abramovich’s public disclosure serving as the impetus for a bidding war amongst possible bidders that will drive the price near to, if not over, his £3 billion assessment.
According to ESPN, as many as 20 different parties have indicated interest in the sale by contacting Raine Group in the United States, which is handling the sale as announced on Wednesday. Todd Boehly, a part-owner of the Los Angeles Dodgers, is heading a group that is seeking to reach an agreement, with a formal proposal due in the coming days. At least ten of the proposals are regarded “serious,” according to ESPN, with RedBird Capital Partners (which includes Oakland Athletics executive vice president Billy Beane) and Michael Rubin, owner of sports retail company Fanatics, among them. (The latter has subsequently denied that they are interested.)
Given the reasons behind Abramovich’s desire to sell, the larger political atmosphere, and Chelsea’s present status, it is, nonetheless, a volatile and uncertain scenario.
ESPN delves into the specifics of what will go down as the most significant transfer in Premier League history.
Mark Ogden contributed additional reporting.
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The lack of clarity on several points here reflects the hurried nature of the deal; Chelsea were preparing for the latest cup final in the trophy-laden Abramovich era last Friday. They’re ready for life without Abramovich starting on Friday.
All sides are “landing in the same place on some of the finer details – which is a sea of uncertainty,” according to one insider with deep links to Chelsea.
The amount of pressure being put on Abramovich will have a direct impact on his capacity to bargain. There is also the matter of Chelsea’s stadium.
The licence to destroy the 41,800-seat Stamford Bridge and replace it with a new 61,000-seat arena ran out in the middle of 2021. Chelsea’s stadium has to be revamped if they are to become self-sustaining; the size and condition of their home field falls behind the Premier League’s other traditional Big Six, and their lack of matchday income makes them more dependent on a wealthy benefactor to fund their success.
Chelsea lost £145.6 million after tax for the year ending June 30, 2021, after winning the Champions League. This was largely due to coronavirus limitations, which forced games to be played behind closed doors, but Chelsea has a history of losing money: between 2004 and 2013, they lost almost £670 million and only had one successful year. They’ve been struggling – and failing – to break even in recent years.
Chelsea’s ticket sales typically bring in £70 million to £80 million each year. United has made £147 million in a single season, while Arsenal has made around £130 million. The major pitch for a new investor is redeveloping Chelsea’s stadium, but insiders close to the idea now predict that a three-year process including transferring the club to Wembley while redeveloping Stamford Bridge would cost in the region of £2 billion. You wouldn’t own the freehold, so that’s an extra £2 billion on top of the asking price.
For the length of a 199-year arrangement agreed with previous owner Ken Bates, the club continues to rent the pitch from Chelsea Pitch Owners, a not-for-profit organisation made up of about 13,000 individual shareholders who control the freehold — meaning they own the land and any buildings on it. Chelsea pays a little rent, but any owner who attempts to relocate the club away from Stamford Bridge forfeits the right to name the team Chelsea Football Club.
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Roman Abramovich’s decision to sell the club would not effect Thomas Tuchel’s future as manager, he claims.
Another factor worth mentioning concerns the possibility of sanctions. It’s hard to say how probable they are or when they will arrive, but given the rising pressure on the UK government to penalise high-net-worth Russians holding assets in the nation, the timing of Abramovich’s decision to sell was no accident. (The European Union has previously done so with a number of billionaires, notably Alisher Usmanov, a former Arsenal shareholder.)
If Abramovich’s name was added to a “Consolidated List” of financial targets in the United Kingdom, the Treasury’s Office of Financial Sanctions would take action. At the time of writing, Abramovich has not been included to any such list in the United States, the European Union, or the United Kingdom. If that happens, Chelsea’s value as an asset might be frozen, making a transfer exceedingly difficult since the government could seize the proceeds of a sale to investigate their sources and destinations.
Chelsea’s capacity to function as a club would be severely limited, with particular licenses required to even pay employees. Transfer expenditure would be tough since Abramovich would be unable to invest further cash, and a block may extend to Chelsea’s pre-existing agreements, such as unpaid payments due on incoming and leaving transfers.
Despite the apparent difficulties, Joe Ravitch, co-founder of Raine Group, said there is no pressing need to close the acquisition. “We’re not going to hurry anything,” Ravitch told Reuters. “It’s critical that Chelsea has the appropriate owner to lead the club forward.”
That is Abramovich’s desire, but it is apparent that time is running out and there is much to be resolved.
The “ukraine” is a country in Europe. It has been the subject of some political unrest for the last year. The Ukrainian president, Viktor Yanukovych, has left his position and will be replaced by someone else.
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