What Is Going on at Chelsea Football Club? Could They Be Made Bankrupt?

In a decision that transcended football and bled into politics, Chelsea owner Roman Abramovich was sanctioned by the British government on 10 March. This was part of a range of different sanctions imposed against seven “pro-Kremlin” Russian oligarchs living in the UK.

Abramovich has long denied any ties to Vladimir Putin. The government, however, have claimed to have established proof of this connection. Whilst discussing the recent sanctions, Prime Minister Boris Johnson stated: “You’ve got to have clear evidence that people are connected to the Putin regime. That has been established. That’s why we’re going ahead with the sanctions.”

He added: “I can’t comment on what individuals are doing, but we’ve concluded that there is enough of a connection between the Putin regime and the individuals in question to justify the action.”

Abramovich has now had all his assets frozen, including Chelsea Football Club. This means that he can no longer sell the club or make money from owning it in any capacity.

As a result, Chelsea is currently operating under a special license granted by the government that is in place until 31 May. However, the treasury can vary, revoke, or suspend it at any time.

What Do the Sanctions Mean for Chelsea?

This special governmental license allows Chelsea to carry on trading so it can pay its £333million-a-year wage bill, but it has also resulted in a number of severe knock-on effects for the West London club:

• No new tickets are allowed to be sold. Only season ticket holders and people who already bought tickets will be allowed to go to games.
• The club is not allowed to make any transfers, loan deals, or renew any pre-existing player contracts.
• The official Chelsea merchandise shop has closed.
• Chelsea is now limited to £20,000 in expenses per game to cover costs such as travel and accommodation (for away games).
• TV rights and prize money has been frozen.

To add insult to injury, Chelsea shirt sponsors Three have also suspended their £40million contract.

How Could Chelsea Avoid Bankruptcy? 

The club would have to be sold to avoid bankruptcy, but the problem is that Abramovich is not allowed to profit from any of his assets. Essentially, therefore, the Russian owner would have to give Chelsea away for free to prevent the club from going bankrupt under current conditions.

The PM’s official spokesman explained: “A specific licence can be granted to allow any sale to proceed. But under no circumstance would any sale allow Roman Abramovich to profit from that or take any money from that sale.”

Conservative MP Chris Philp further clarified the situation, saying: “As the licence conditions are written today the sale would not be allowed. If a buyer emerged then it would be open to that buyer or to the football club to approach the Government and asked for the licence conditions to be varied in a way that allowed that sale to take place.” 

He continued: “But to be clear, no proposal would be accepted which saw the proceeds of any sale ending up in an unrestricted bank account owned by Abramovich. He can’t benefit from the proceeds of any sale.”

The current situation at Chelsea is both complex and unprecedented. With no clear resolution in sight, the club’s future has been plunged into chaos.

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