Chelsea are back in turmoil after Abramovich reportedly decided that he wants his loans repaid after all, and that causes a headache for the government.
It feels as though a lot of people have been lulled into a false sense of security about the future of Chelsea over the last few weeks. There was a period during which the severity of their position following the Russian invasion of Ukraine and the sanctions issued against Putin-adjacent oligarchs was pretty clear. No contract negotiations. No food to be sold inside the ground. No further ticket sales. The list went on. It was unprecedented in the history of the game in this country.
But the difficulty in which the club found itself has faded from view since the bidding process for the sale of the club began. Sure enough, the matter of the whole transaction being overseen by investment bank the Raine Group on behalf of the government leaves it all feeling a tad unusual, but otherwise the bidding process proceeded very much as we might have expected: very rich people jostling for position, meeting with representatives from the club, its supporters trust and other influential stakeholders, with indistinct promises being made of a brighter future.
The consortium fronted by Todd Boehly have been confirmed as the preferred bidders for the club, but there was some degree of drama when it was reported that a British-led consortium fronted by this country’s richest man, Sir Jim Ratcliffe, had submitted a bid at the very last minute that was worth substantially more than the others. Why this bid wasn’t made by the original date of April 14 has not been clarified, and the question of why it even should be considered when it arrived two weeks after the closing date for bids – even if it’s understandable that such dates are largely arbitrary and can be moved if necessary – also remains unanswered.
And now a further bombshell has dropped, and its ramifications could be far-reaching. Roman Abramovich, it has been reported, wants the money back from the £1.6bn that he has put into the club through his company Fordstam. It has been widely reported that Abramovich had offered to write off this debt to protect the football club by simplifying its sale, but this no longer appears to be the case. And this presents those overseeing the sale with a substantial headache.
This change was reportedly requested shortly before the deadline for bids, and it would dramatically push up the cost of buying the club. Boehly hasn’t yet commented on these latest reports, but we can assume such an increase in the cost of the takeover could jeopardise his ability to complete the deal. Could the debt sit dormant as a liability of the club until such a time that they could be released? Is it ethical to even do that? Would Boelhy be prepared to accept that?
But Boehly’s group, for all its ‘period of exclusivity’ status, hasn’t been the only game in town. Ratcliffe’s offer to buy the club had been £2.5bn plus £1.75bn in investment over the next ten years; he may need to increase his bid by a further £1.6bn to cover this debt or even renege upon that promise of investment over the next ten years.
But things aren’t even as straightforward as that. Even if this £1.6bn were to be repaid, Abramovich remains sanctioned, and none of the proceeds of the sale are permitted to be returned to him. So, where would this money be deposited, even if the government were to find a way of agreeing it? Abramovich’s volte-face certainly seems to have caught the Departure for Culture, Media and Sport off-guard, and changing the rules in a way that might be perceived to benefit Abramovich could certainly be politically troublesome, especially at a time of increased Russian sabre-rattling.
We can only speculate at the possible reasons for this sudden cessation of Abramovich’s previously expressed desire to protect Chelsea. Could it be that the Ratcliffe bid, being so much higher than the value of the business itself, turned his head? (And for that matter, why did Ratcliffe make his bid directly to the club rather than through Raine?) Is this just brinkmanship, or perhaps even just an attempt to embarrass the government? Was it his intention to do this all along, and if it wasn’t, what has happened to change his mind over the last few weeks?
So many questions and so few answers, and perhaps even these are for another day, because if there’s one thing that we can say for certain about Chelsea’s current position, it’s that time is very much of the essence. Legally speaking, Abramovich’s businesses are not allowed to trade in the UK at present, and a special licence was granted to Chelsea to continue to do so, albeit one with those aforementioned strict conditions attached. This licence expires on May 31, and that’s not the only harsh deadline on the club’s horizon, either.
Chelsea already seem set to lose Antonio Rudiger and Andreas Christensen, while there are also doubts over other players such as Marcos Alonso and Cesar Azpilicueta and new contracts to negotiate for Reece James and Mason Mount. And more troubling still, a failure to have this licence either removed or renewed by the end of May could have even more serious ramifications for the club than contract negotiations.
Like most football leagues, the Premier League holds its AGM at the end of the season to confirm its constitution for the following season. The date of this year’s hasn’t been publicly confirmed yet, but last year it was held on June 10. At this meeting, the 20 clubs that will form the league next season will be confirmed. This is normally one of the relative formalities of this meeting, but this time around the matter could be seriously compromised should the issue of Chelsea’s ownership not have been definitively decided by that point.
It is possible – perhaps even likely – that this meeting could be put back in the event that it hasn’t (the league’s constitution requires them to give 21 days’ notice of these meetings) but there are no guarantees, and even if it were to be delayed, it’s unlikely that the league could do so for more than a few days. Next season starts early on account of the winter World Cup. Without firm assurances that Chelsea can get through next season, the dreaded scenario of the club being expelled from the Premier League has to at least be considered plausible.
The way in which this story is changing casts some degree of doubt on almost everybody involved. Why was Ratcliffe’s offer permitted to bypass some of the hoops through which other interested parties had to jump? Why was Abramovich given the final say on whether agreeing a sale? Why has he changed his mind now? Does the government even have a contingency plan for the possibility that no sale is agreed? And crucially, what happens should a sale not have been agreed and completed by the time of the Premier League’s AGM, which is likely only five or six weeks away?
Things could all change again very quickly, and these questions could turn out to be a storm in a teacup. There may be alternate solutions. But they have to be asked now, because time is short and the stakes are extremely high; the existence of Chelsea Football Club could be even at stake. It was always likely that there could be a conflict between the desire to continue with sanctions being as punitive as possible and the importance of Chelsea as a ‘cultural asset’, and this conflict seems set to be put to its greatest stress test yet. For now, there are more questions than answers, and there are plenty of questions to go round.
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