The Political Economy of Football V2

Sir Keir Starmer has issued a licence to transfer £2.5bn of frozen assets from Roman Abramovich’s sale of Chelsea Football Club to Ukraine, warning the Russian former owner that the UK government is prepared to take him to court if he fails to release the funds.   “My message to Abramovich is . . . the clock is ticking, honour the commitment you made and pay up now,” Starmer said during Prime Minister’s Questions on Wednesday. “If you don’t, we’re prepared to go to court so every penny reaches those whose lives have been torn apart by Putin’s illegal war.” Since Abramovich sold Chelsea and other investments for £2.5bn in 2022 to a consortium led by US investors Todd Boehly and Clearlake Capital, the multibillion-pound proceeds have remained frozen in a UK bank account. Fordstam, the UK entity through which Abramovich owned Chelsea, filed accounts for the year ended June 2022 last month at Companies House, showing that the proceeds could ultimately be lower than the £2.5bn hea...

WhyA 94-word statement released by the English Football Association on Thursday has cast a cloud over Chelsea.  The news that the club had been hit with 74 charges relating to alleged breaches of rules on agent payments did not come as a surprise to club executives, given the issue has been hanging over them since 2022, but it has sparked concern among supporters. The 74 charges are related to alleged breaches of FA rules regarding regulations on working with intermediaries and third-party investment in players.   The alleged offences took place between 2009 and 2022, although the focus is on what took place from the 2010-11 to 2015-16 seasons. Chelsea say the offences are all related to the regime of the club’s previous owner, the Russian oligarch Roman Abramovich, although the FA declined to confirm that point when asked about it by  The Athletic . Chelsea also say that they flagged the discrepancies to all the governing bodies — the FA, the Premier...

Roman Abramovich has now been sanctioned by the UK Government.   The sale of the club has been put on ice and the club is operating under a 'special licence'.  The Premier League was told just 15 minutes before the decision was announced. A statement from the financial sanctions office at HM Treasury can be found here:  https://ofsi.blog.gov.uk/2022/03/10/chelsea-football-club-what-you-need-to-know/ Up to now I thought that the Government wanted to avoid getting directly involved with a football club, but they have been under heavy pressure to 'do something' about oligarchs and Abramovich in particular given his high profile.  He has always denied having close links with the Kremlin. It is possible that the move could be subject to a legal challenge.  Chelsea has said that it wants to seek amendments to the licence that would enable it to operate as normally as possible, in particular in relation to expenses that can be allowed for home and away matches....

The Financial Times Football and Business summit this week was certainly timely. Roman Abramovich ’s purchase of  Chelsea   back in 2003 changed the face of English football, kick-starting an era in which billionaires and institutional investors buy clubs for status and trophies. So his decision to sell the team marks the end of an era.    However, those who are hoping for a return to the era of owners like Burnley’s Bob Lord may be disappointed. The move was widely interpreted as an attempt to head off potential sanctions. Politicians, including Labour leader  Keir Starmer , continue to call on the UK government to include Abramovich on its list of Russian targets. Richard Masters ,  Premier League  chief executive, said the fastest the league has ever approved a takeover is 10 days and there have been suggestions that a possible Swiss-American joint bid could be fast tracked. But he added any approval was unlikely if Abramovich was subje...

Roman Abramovich's move to pass control of Chelsea to the club's charitable foundation has been put on hold, with the trustees taking legal advice on whether it is even possible.  At least one trustee fears they may have to resign because of a potential conflict of interest.   One trustee who would have a potential conflict of interest is Emma Hayes, the manager of the Chelsea women's team. The board of trustees held talks with legal advisers on Sunday and will wait for their guidance.   As someone who as served as a trustee and chair of two charities, I know that charity law is very complex and quite demanding.  At one medium-sized charity, we had to retain a specialist solicitor.   The regulatory body, the Charity Commission, has contacted the Chelsea Foundation with a request for more information.  While I was chair of one charity, we were subject to a routine investigation by the Commission.   They gave us a clean bill of The tr...

A statement by Roman Abramovich about handing over the stewardship of Chelsea to the club's charitable trustees has led to considerable confusion:  https://www.chelseafc.com/en/news/2022/02/26/statement-from-club-owner-roman-abramovich Evidently it is an attempt to avoid any damage to the club as a result of sanctions against the Chelsea owner.   However, what it means in practice is far from clear - other than that the club is not for sale. Abramovich is perceived as a close associate of Russian president Putin but regards that as unfair.  One of his daughters has criticised the invasion of Ukraine. It would appear that Abramovich will no longer be involved in club matters on a day-to-day basis and that long-term strategic decision-making powers will reside with the Chelsea Foundation.   The five trustees are Chelsea women's manager Emma Hayes, club chairman Bruce Buck, sports lawyer John Devine, former sports minister and Chelsea fan Hugh Robertson and th...

Roman Abramovich, the owner of Chelsea, has settled a libel claim against HarperCollins and the author of a book about President Putin.  This means that the case will not have to go to court, possibly leading to embarrassing revelations. Abramovich disputed claims that Putin ordered his 2003 acquisition of Chelsea along with other allegations. The publisher has apologised and amended the text, including the part about the purchase of Chelsea.  They have included additional comments from Mr Abromovich's spokesman that provide further information about his motivations for the purchase.  A donation to charity has been made in relation to another statement in the book.

Roman Abramovich is one of four Russian billionaires to sue publishers HarperCollins for defamation over a book about the rise of President Putin to power. Abramovich said his 'action was not taken lightly' and that the book contained 'false and defamatory statements' about him.  Court documents show that he disputes a claim that Putin ordered his 2003 acquisition of Chelsea as well as other allegations. HarperCollins stated that they would mount a robust defence.

Roman Abramovich has no interest in selling Chelsea and remains committed as ever, although he has not attended a match for 43 games after his visa troubles, insists chairman Bruce Buck: Chelsea not for sale It is evident from the report that a few bargain hunters have been sniffing around and have been sent packing. That is not to say that a really good offer would not be considered. However, any purchaser would really need to commit to redeveloping Stamford Bridge, a plan that is currently shelved but comes with a big price tag.

After an intervention by Roman Abramovich, Frank Lampard has agreed to become Chelsea manager, reports the Sunday Times. Lampard insisted that he should be allowed at least two seasons at the Bridge and Abramovich rang Lampard to give him his personal assurance that he would be given at least two transfer windows. With the club currently serving a two window transfer ban, that would set Lampard up for the 2019-20 and 2020-21 seasons. Duncan Castles comments, 'The owner's intervention is particularly significant because his interest in the club was thought to be waning. The Russian put plans for a £1bn-plus stadium rebuild "on hold" last year after losing his entrepreneurial visa and took up residency in Israel. He was not seen at home games in 2018/19 and has stopped making payments of more than £1m a season for hospitality boxes at Stamford Bridge.' Lampard has nurtured a long-term ambition to manage Chelsea, but he did not expect it to come so soon. He s...

Kieran Maguire of the PriceofFootball takes an in depth look at the latest Chelsea accounts: The Lion Sleeps Tonight He concludes, 'The biggest fly in the ointment is Roman Abramovich and his intentions. He has invested a huge amount in the club and clearly has some affection for it, but his lack of appearances at the ground for the last year and the decision to not go ahead with a new stadium leaves Chelsea falling behind the rest of the pack potentially in future years.' 'Using the Markham Multivariate Model we value Chelsea presently at about £2.8 billion, but that value is likely to fall if the club cannot maintain the level of profits on player sales and qualify for the Champions League.'

Bloomberg Businessweek takes an in depth look at the background to the growing possibility that Roman Abramovich will see Chelsea, if he can find a sufficiently wealthy buyer, and the whole phenomenon of Londongrad: Has anyone seen Roman Abramovich?

Roman Abramovich, Chelsea's owner, has been denied Swiss residency after the authorities there responded to unverified police reports. An injunction preventing publication of a leaked police report has only just been lifted. The report alleged that 'Mr Abramovich was known for suspected money laundering and contacts with criminal organisations' [in Russia]. It added, 'We consider his presence in Switzerland to be a threat to public safety and a risk to Switzerland's reputation.' That is saying something given the scandals that have touched the Alpine state in the past, although it has made real efforts to clean up its act. Mr Abramovich applied in 2016 to live in the ski resort of Verbier in the canton of Valais where he was welcomed with open arms by local officials. They negotiated a lump sum tax payment with him. The application was halted after the state secretariat for migration asked for the police report. Mr Abramovich denies any wrongdoing and has ...

Roman Abramovich is putting Chelsea on the market. It is not a great surprise after the cancellation of the stadium rebuilding project and the recent difficulties over his UK work visa. The asking price is over £2bn which would be a world record for a football club. Manchester City and Arsenal are valued at around £1.8bn to £1.9bn. Only someone who is super rich need apply. Abramovich turned down a £2bn bid earlier this year from Sir Jim Ratcliffe, the chemicals tycoon and Britain's richest man with the Russian holding out for £2.5bn. US private equity firm Silver Lake wanted to buy a minority stake in Chelsea, but were turned away. Liverpool rejected a £2bn bid from an Abu Dhabi Sheikh in January. Abramovich has hired the same specialist US investment bank, Raine Group, that helped Manchester City sell a 13 per cent stake to Chinese businesses in 2015. They are likely to look for buyers in the US, China and the Middle East. Premier League clubs remain attractive to overse...

Kieran Maguire of the Price of Football has noted that if the Conte severance figure as reported in the media are correct then it brings total management change costs at Chelsea to £80.6 million since Abramovich bought the club. Of course, the Chelsea way is to have a rapid turnover of managers. Whether less frequent changes would have brought better outcomes is a matter for speculation. Chelsea had hoped to avoid paying out £9.5m on the 12 months left on his contract. For his part, Conte is far from happy and is considering legal action: Angry coach

This is not a straightforward matter as Chelsea has a particularly complex structure with a large number of subsidiaries (see complete list below). Here we focus on the ultimate parent company, Fordstam Limited. The loss for the year to 30 June 2017 was £13.8m compared to a loss of £84.5m for the prior year. Increased revenues and player sales were the principal reasons for the improvement. Turnover increased from £334.6m to a record £367.8m. 'This was due to an increase in the broadcasting revenues because of increased centralised distributions from the Premier League (a £19.5m increase) together with an increase in sponsorship income due to additional agreements being signed in the year (a £17.8m increase), principally the start of our new training wear partnership with Carabao. Match income was slightly down reflecting our non-participation in European competition (a £4.1m reduction).' Broadcasting income accounts for 44 per cent of revenue. Commercial revenue accoun...

There seems to be an emerging consensus that the best way to hit back at Russia is to hit back at assets and funds held by Russians in London which, it is claimed, have in many cases being acquired illegally and are being laundered in London. Why nothing has been done about this before now is another question. Matthew Syed is a highly respected football journalist, but I do think parts of his article in The Times this morning are exaggerated. The headline reads 'Spy case could spell trouble for Abramovich.' The article starts in rather melodramatic fashion with someone being beaten to death in Russia, but later on speculates about a strong British version of the American Magnitsky Act which, it is suggested, could place Roman Abramovich's assets in jeopardy as the state would be able to determine 'whether assets owned in Britain were paid for with ill-gotten cash.' 'If our legislators have the courage to draft a rigorous clause ... it is not just Abramovic...