Roman Abramovich’s attempts to sell Chelsea halted after UK freezes assets | chelsea

Chelsea have been thrown into a state of uncertainty after the UK government imposed sanctions on Roman Abramovich, putting the sale of the club on hold and leaving the European champions at risk of falling into financial difficulty.

Although Chelsea have been granted a special license which will allow them to fulfill their commitments, they face an uncertain future after Abramovich’s assets were frozen due to the oligarch’s alleged links to Vladimir Putin and the Russian government. Broadcasting and prize money will be frozen and the license is limited to “football-related activities”, leaving West London unable to sign players, renew existing playing contracts or operate on a commercial level, and means Abramovich will need UK approval. government before selling the Stamford Bridge club.

Abramovich, who came under intense scrutiny after Russia invaded Ukraine, will not be allowed to profit from the sale of Chelsea. Government sources have said they are prepared to consider applying for a new license which would allow a new owner at Stamford Bridge if a suitable offer emerges, although there is no clarity as to where the money will go. of any sale at this time.

Discussions are continuing between the Treasury, the Premier League and the Department for Digital, Culture, Media and Sport. A source said: “The main thing today is to take action against oligarchs with close ties to the Kremlin. We are working on some of these wider implications, including around a potential sale at this time. »

It is understood that the decision to sanction Abramovich, which was announced Thursday morning, did not deter potential bidders. Sources say a consortium led by Todd Boehly and Hansjörg Wyss have not ended their interest in buying Chelsea. British property tycoon Nick Candy has also been working on putting together an offer and representatives for Muhsin Bayrak have said the Turkish businessman remains committed to buying the club.

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    At the moment, however, Chelsea are in turmoil. Abramovich cannot put money into the club or take it out. The 55-year-old has given Chelsea £1.5bn in loans since they were bought in 2003. The club’s latest accounts showed a loss of £145.6m in the last financial year, although that has been attributed to the impact of the pandemic. Financing is provided by Fordstam Limited, a company owned by Abramovich.

    The government’s aim is to target Abramovich rather than Chelsea, which it considers an “important cultural asset”. The license is designed to act as a safety net to protect the club, the Premier League, the game and the fans, with the government aware that English football would be damaged if Chelsea were allowed to collapse. It is recognized that the license could be reviewed and changes could be made once Chelsea have had time to explain their costs to the authorities.

    But in its current format, the license will force Chelsea to operate under heavy restrictions. They cannot sell match tickets and merchandise sales have been banned, with the club shop closed. Only season ticket holders and those who have already purchased their tickets will be allowed to attend matches, but the catering facilities at Stamford Bridge will remain open.

    The license states: “The remuneration, allowances and pensions of all club employees, including the salaries of players and coaching staff…are payable under obligations prior to the date of this license and are due during the term of this license.”

    However, Chelsea head coach Thomas Tuchel may not be able to spend on new signings this summer. If new contracts cannot be awarded, Chelsea will lose Andreas Christensen, Antonio Rüdiger and César Azpilicueta on free transfers. The Chelsea women’s team could also lose Ann-Katrin Berger, Maren Mjelde, Jonna Andersson, Ji So-yun and Drew Spence as free agents.

    The license also allows for ‘reasonable travel expenses’ to and from matches up to a maximum of £20,000, raising questions over how Chelsea will travel to France for the second leg of their Round of 16 fixture. Champions League against Lille next week.

    Chelsea can also spend up to £500,000 per game on ‘reasonable costs’ such as security, stewardship and catering. They can continue payments to and from other clubs for transfers and existing loan deals, broadcasters can show their games, and third parties who already have club merchandise in stock can sell it ‘provided no funds or other financial benefit is made available to the club” or Abramovich.

    Chelsea’s main shirt sponsor, mobile phone network Three, has confirmed it is reviewing its relationship with the club. The deal is believed to be worth £40million a year.

    Security guards set up barricades outside an official Chelsea merchandise store near Stamford Bridge. Photograph: Hannah McKay/Reuters

    The UK has targeted Abramovich as part of its response to Russia’s actions in Ukraine. In a document released by the government on Thursday morning, the owner of Chelsea was identified as “a pro-Kremlin oligarch” and was allegedly “associated with someone who is or has been involved in the destabilization of Ukraine and in the attack and threat to territorial integrity”. , sovereignty and independence of Ukraine, namely Vladimir Putin, with whom Abramovich has had close relations for decades”.

    The document says Abramovich has had a close relationship with the Russian president “for decades” and that the association has brought him financial benefits. Abramovich has repeatedly and vehemently denied that he was connected to Putin or the Russian state, or that he had done anything to deserve punishment.

    The government said: “This association has included obtaining financial or other material benefit from Putin and the Russian government. This includes tax breaks received by companies linked to Abramovich, the purchase and sale of stocks from and to the state at favorable rates, and contracts received in the run-up to the 2018 World Cup. Abramovich received preferential treatment and concessions from Putin and the Russian government.

    It was also claimed that Abramovich “was involved in the destabilization of Ukraine and undermined and threatened the territorial integrity, sovereignty and independence of Ukraine, through Evraz PLC, a steel and mining company in which Abramovich has a significant interest and over which Abramovich exercises effective control”.

    The government said: “Evraz PLC is or has been involved in the provision of financial services, or the provision of funds, economic resources, goods or technology which may contribute to the destabilization of Ukraine or undermine or threaten the territorial integrity, sovereignty or independence of Ukraine – which includes potentially supplying steel to the Russian military which could have been used in the production of tanks.

    Abramovich, whose Chelsea have won 21 trophies, put the club up for sale last week. He appointed New York-based bank Raine Group to oversee the process. There has been speculation that Chelsea’s next owners will come from America. Woody Johnson, the owner of the New York Jets NFL team, is reportedly preparing an offer. Thomas Ricketts, president of Major League Baseball’s Chicago Cubs, has been mentioned and Josh Harris has signaled an interest, though his Crystal Palace stake may be a complicating factor.

    A Chelsea Supporters’ Trust spokesman said: ‘CSE notes with concern the Government’s statement regarding the owner. Supporters should be involved in any conversation regarding the ongoing impacts on the club and its global fanbase. CST implores the government to carry out a swift process to minimize uncertainty over Chelsea’s future, for supporters and supporters to receive a share of the gold as part of a sale of the club.

    When Abramovich put the club up for sale, he said he would not call on his loans and announced his intention to use the sale of Chelsea to donate funds to war victims in Ukraine. However, this fund was not intended only for Ukrainians, which raises the possibility that money will go to Russian soldiers or their families.

    Chelsea have yet to comment while Abramovich’s spokesperson has been approached for comment.

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