Chelsea have effectively been up for sale since the Home Office delayed Roman Abramovich’s visa renewal after the Salisbury poisonings in 2018, but his extraordinary public statement has dramatically altered the terms of any potential deal.
By writing off £1.5billion in loans to the club, the Russian has made it far more attractive to potential investors, while the carefully-worded offer to give all ‘net proceeds’ to victims of the war in Ukraine may succeed in detoxifying the sale — an issue which had been deterring potential buyers concerned about doing business with a man facing government sanctions.
Abramovich’s sudden change of tack from attempting to temporarily hand the club over to the Chelsea Foundation just three days ago indicates he sees such sanctions as an imminent threat, which could still scupper the sale.
It is unclear whether the Government will allow it to go ahead, and the Financial Times reported on Wednesday night that Michael Gove is drawing up plans to seize the property of Russian oligarchs with links to Vladimir Putin, a category that would almost certainly include the Chelsea owner.
Abramovich has effectively been involved in a cold war with the Government since they blocked his visa renewal four years ago, which led him to apply for both Israeli and Portuguese citizenship on the basis of his Jewish ancestry, but Russia’s very real war in Ukraine has dramatically increased the heat.
The 55-year-old now has far more to worry about than the colour of his passport, as evidenced by an extraordinary few days, in which a man who has often appeared committed to a monastic vow of silence has endorsed various statements claiming to be giving Chelsea to charity and brokering a peace deal between Russia and Ukraine before Wednesday night’s seemingly definitive blockbuster.
Abramovich’s statement still left many questions unanswered however, particularly his contention that the sale will not be fast-tracked, as time appears to be of the essence with the Government poised to act.
There is also the issue of price, as Abramovich has held serious talks with numerous interested parties in the four years since he put the club on the market, but no one has come close to a valuation that began at £2.5bn and has since risen to over £3bn.
One of the previous bidders, LA Dodgers owner Todd Boehly, has returned to the fray as part of a consortium fronted by Swiss billionaire Hansjorg Wyss, who also went public with his plans yesterday in a remarkable interview with Swiss newspaper Blick, in which he claimed Abramovich was selling in a panic. That colourful accusation may contain grains of truth, but it is unlikely to aid the negotiation process.
Abramovich’s desperation to sell may lead to him being more flexible on price, which he will need to be given he has previously rejected offers of £2.25bn. A bid of £2.5bn was also reportedly dismissed this week.
Giving his willingness to write off his loans to the club, recouping his losses is clearly not Abramovich’s motivation. That is just as well, as even without the fall-out from the war in Ukraine there are serious questions about whether buying Chelsea is a sensible investment.
The valuation has soared as Chelsea have conquered England, Europe and most recently the world since Abramovich paid Ken Bates just £140million 19 years ago, but for most of those years it has been a loss-making enterprise funded by the owner’s largesse.
The shrewd player-trading of director Marina Granovskaia, underpinned by the outstanding academy run by Neil Bath, have helped balance the books in recent years. However, as a business, Chelsea remain hamstrung by the size of Stamford Bridge — which delivers only little more than half the match-day revenue Manchester United get from Old Trafford.
Solving the stadium problem has proved beyond Abramovich in almost two decades in charge, and would be the key to making the west London club self-sufficient for any successor.
Chelsea explained Abramovich’s decision to postpone a planned £1.4bn, 60,000-seat rebuild of Stamford Bridge shortly after his visa issues came to light in May 2018 with an opaque reference to ‘the current unfavourable investment climate’.
While obstacles remain, his far lengthier statement on Wednesday night has made that climate considerably more favourable.