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Government gives it large to Chelsea

The Government seems to be taking a hard line in its licence negotiations with Chelsea.    It appears to be willing to make only marginal concessions, for example on away travel costs and the renegotiation of player contracts..

Clearly it wants to make an example of a high profile oligarch.  It is being egged on by Labour MP Chris Bryant who has occupied the high moral ground and has asked more commercial sponsors to distance themselves from the club.

Indeed, Bryant wants the Government to go further and 'seize' the club, i.e., nationalise it.   This would be a first in football and give Nadine Dorries an even bigger role (although I notice that technology minister Chris Philp has been making statements for the Government).

Cash flow

The banks have now suspended the club's commercial credit cards while they clarify the position.  It seems to me that the club is now in real jeopardy in cash flow terms.  Excluding season tickets, Chelsea bring in around £600,000 per match from ticket sales.

Football finance guru Kieran Maguire says that in the past the club was able to go to Abramovich for interest free loans to help with cash flow.  They would then repay him at the end of the season when a big lump of money arrived.

It is possible that the club could be allowed to secure a bank loan based on future TV income which could then go into a separate account to pay the players and staff.  Several clubs have done deals with the Australian bank Macquarie so that they can immediately bank outstanding instalments for transfer fees.  The bank receives a commission for paying the readies over up front and then takes over the debt.

The telecoms company Three has suspended its £40m a year partnership with the club while Hyundai has joined them.   Holiday website Trivago is standing by the club.  Nike has declined to comment on its 15-year £900m kit deal.

Insolvency?

If there is not a speedy sale the club could become insolvent and face a nine point deduction.   I think this is a worst case scenario.  However, under new owners, it could lose its status as a big six club.  The vultures are already circling eyeing players, including those in the substantial development squad.

My assumption had been that the Government would not want to see a major Premier League club collapse, given the global importance of the competition and the many fans who are voters in this country.

The way out would be clearly to allow a sale to go ahead without Roman Abramovich benefitting and there are ways of doing that.   However, Nadine Dorries has said there are 'consequences'.

But should those consequences penalise Chelsea fans?   Of course, some rival fans are revelling in their discomfort.  I have never wanted to see rivals collapse for off the pitch reasons.

Of course, the club has benefitted from Roman Abramovich as a generous benefactor, but I think most clubs would have welcomed him in the early noughties.   That was when there was a relaxed attitude to London becoming Moscow-on-Thames with estate agents and lawyers coining it.   No one comes out of this particularly well, including politicians of both main parties.

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