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Roman Abramovich, Chelsea owner and Russian oligarch, sanctioned by U.K. government as sponsors cut ties

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Roman Abramovich has been named among seven Russian oligarchs sanctioned by the United Kingdom, throwing Chelsea into crisis. At the end of one of the most dramatic days in English football’s recent history the Blues find themselves:

  • unable to change ownership without a new license from the U.K. government, who will only sanction a deal in which Abramovich does not get a penny;
  • only able to welcome season ticket holders and those who have already purchased seats;
  • facing up to the prospect of a behind closed doors Champions League quarterfinal;
  • blocked from registering new players and signing new contracts;
  • battling to keep sponsors after telecommunications giant Three asked them to remove their branding.

Abramovich, who formally put the west London club up for sale earlier this month as the threat of sanctions loomed large, has been banned from undertaking any transactions with U.K. individuals and businesses. He is unable to access his assets in the country and is not allowed to travel there. 

The 55-year-old has consistently denied any involvement with Russian president Vladimir Putin, but the Treasury stated he “is associated with a person who is or has been involved in destabilizing Ukraine and undermining and threatening the territorial integrity, sovereignty and independence of Ukraine, namely Vladimir Putin, with whom Abramovich has had a close relationship for decades.”

Chelsea have been granted a special license under which they will be allowed to operate as a football club, but the conditions on them are onerous. The U.K. government has said they are open to selling Chelsea. Any such deal would require special dispensation from the government and a new license. None of the proceeds of the sale can go to Abramovich while he is under sanctions.

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Abramovich had previously said he would not ask for the $2 billion in debt owed to him to be repaid and that net proceeds of the sale would go to a foundation he would set up to help “all victims of the war in Ukraine.” That foundation would have to be replaced while the Chelsea owner would have to prove he received no funds from any sale, entirely writing off the sizeable sums owed to him. 

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Initial bids had been submitted, including a joint-offer from Swiss businessman Hansjörg Wyss and American counterpart Todd Boehly, with several other parties having declared an interest.

Meanwhile, Chelsea sponsors have begun to cut ties with the club over fear as to the reputational damage that their association with them would cause. Shirt sponsors Three have suspended their $52.5 million deal with Chelsea, due to run until the summer of 2023, and have requested the immediate removal of their branding from club attire and Stamford Bridge. CBS Sports understands that in the hours leading up to kick off the telecommunications company were working to remove the sponsors’ logo from the shirts Thomas Tuchel’s side would wear for the Premier League match against Norwich on March 10.

“In light of the government’s recently announced sanctions, we have requested Chelsea Football Club temporarily suspend our sponsorship of the club, including the removal of our brand from shirts and around the stadium until further notice,” said a Three spokesperson.

“We recognize that this decision will impact the many Chelsea fans who follow their team passionately. However, we feel that given the circumstances, and the government sanctions that is in place, it is the right thing to do.”

Club partner Zapp have also suspended their deal with the Blues and automotive partner Hyundai Motor Company could be next.

“Hyundai has become one of the strongest partners in football over the years and the company supports the sport to be a force for good. We are currently assessing the situation with Chelsea FC,” a spokesperson for the South Korean automotive manufacturer said.

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In a statement responding to the sanctions, Chelsea stated that they would hold discussions with the government over changing the license, something which they say would allow them to operate more normally, but could also open the door for a sale: “We will fulfil our men’s and women’s team fixtures [Thursday] against Norwich and West Ham, respectively, and intend to engage in discussions with the U.K. government regarding the scope of the license,” Chelsea said. 

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“This will include seeking permission for the license to be amended in order to allow the club to operate as normal as possible. We will also be seeking guidance from the U.K. government on the impact of these measures on the Chelsea Foundation and its important work in our communities.”

In the meantime, Chelsea will not be allowed to sell tickets for their games, meaning only season-ticket holders can attend, and will be unable to register new signings or extend the contracts of current players. Their inability to sell tickets from now until the end of the license period means that if they overcome Lille in the Champions League round of 16 they could be obliged to play their quarterfinal away from home.

The Blues will also see their travel costs limited at just over $26,000 (£20,000) per game, a potentially significant logistical headache for their Champions League commitments, while stewarding and catering costs for games are capped at around $650,000 (£500,000) a match.

The “Russia Regulations” license also gives provision for the payment of outstanding fees related to loan and transfer agreements made before Thursday (March 10). In practice, this means that clubs that are still owed money from Chelsea for past deals are entitled to chase it. The club can receive outstanding transfer fees, broadcast income and performance fees such as competition prize money but all those funds will only be made available to conduct day-to-day business.

This license currently expires on May 31, but “HM Treasury may vary, revoke or suspend this license at any time.”

Culture Secretary Nadine Dorries said: “Putin’s attack on Ukraine continues and we are witnessing new levels of evil by the hour. Today the government has announced further sanctions against individuals linked to the Russian government. This list includes Roman Abramovich, the owner of Chelsea Football Club.

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“Our priority is to hold those who have enabled the Putin regime to account. Today’s sanctions obviously have a direct impact on Chelsea and its fans. We have been working hard to ensure the club and the national game are not unnecessarily harmed by these important sanctions.

“To ensure the club can continue to compete and operate we are issuing a special license that will allow fixtures to be fulfilled, staff to be paid and existing ticket holders to attend matches while, crucially, depriving Abramovich of benefiting from his ownership of the club. I know this brings some uncertainty, but the government will work with the league and clubs to keep football being played while ensuring sanctions hit those intended. Football clubs are cultural assets and the bedrock of our communities. We’re committed to protecting them.”

Chelsea travel to Norwich on Thursday night for a Premier League game and will return to Champions League action next week, facing Lille in France on Wednesday night in the second leg of their round of 16 tie (on Paramount+). Their next home game against Newcastle is on Sunday after which they are due to play Brentford on April 2. The Bees have not sold out their away allocation — the next batch of tickets due to go on sale later on March 10 will not now be made available — but had already committed to taking it in its entirety.

“In light of the breaking news in relation to Chelsea FC, we are seeking clarification from the Premier League as to what this means for our away ticketing allocation at the match at Stamford Bridge on Saturday, April 2,” a statement from Brentford said. “Prior to March 10 we made a contractual commitment to take our entire allocation of 3,000 tickets for this match and will do everything in our power to ensure our full allocation is distributed to Bees fans.”

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