Why is Roman Abramovich selling Chelsea? Will any sale impact a transfer budget? Is Abramovich in a race against time? Who could take over the club?
Saturday 5 March 2022 10:51, UK
Sky Sports News' chief reporter Kaveh Solhekol answers the most pressing questions as Roman Abramovich confirms he is selling Chelsea.
The Russian billionaire made the announcement on Wednesday - shortly before Chelsea's FA Cup win at Luton - saying he believes the decision "is in the best interest of the club".
Abramovich's move comes amid Russia's invasion of Ukraine, which has led to the threat of sanctions from the UK government aimed at Russian businesspeople.
Abramovich - who bought Chelsea in 2003 and has overseen the collection of 19 major trophies - said he would donate all net profits from the sale to a charitable foundation that would benefit the "victims of the war in Ukraine".
However, the 55-year-old's statement confirming his intention to sell Chelsea made no mention of Russia or Vladimir Putin, its president. Abramovich has denied he has close links to Putin or his government.
Swiss billionaire Hansjorg Wyss and American investor Todd Boehly are understood to be two of the parties interested in buying Chelsea from Abramovich. However, a spokesperson for Ineos, the company owned by Jim Ratcliffe, said there was "no substance" linking the British billionaire with a bid for the club.
Read on for Kaveh's full analysis as one of England's most successful clubs looks primed to change hands for the first time in nearly two decades...
The reason Roman Abramovich wants to sell Chelsea is because he is facing the threat of being sanctioned by the UK government. If that was to happen, potentially all his assets in the UK could be frozen and he would lose control of the club. He's already trying to sell £200m worth of property in central London, and his most valuable UK asset is Chelsea, so it makes sense he would try to sell the club as quickly as possible.
We had the situation yesterday where the leader of the opposition, Sir Keir Starmer, stood up in the House of Commons and directly asked Boris Johnson, the Prime Minister, why Abramovich had not already been sanctioned. Johnson said he could not comment on individual cases. So obviously while this threat of sanctions is hanging over him, it makes sense for Abramovich to try to sell Chelsea as quickly as possible.
At the moment, in the current climate, it would be difficult to sell Chelsea quickly. If you were trying to buy a flat in London or anywhere in the UK, for instance, right now you would be asked some very serious questions - where is the money coming from and where is it going to?
A lot of Russian banks have been sanctioned, so it's very difficult to do business with Russian oligarchs or any Russian banks whatsoever. I don't think it is going to be simple.
Speaking at the Financial Times' business of football summit, Richard Masters, the Premier League chief executive, said: "I think the situation has escalated incredibly quickly over the last seven days and he's [Abramovich] come to the right conclusion. It's unsustainable in the current environment.
"So it's a welcome decision and obviously, for the sake of everybody - including the fans - as soon as the sale process concludes, everyone has certainty."
Masters said the quickest sale of a Premier League club was 10 days, but normally it takes a few weeks and depends on the complexity of the information involved - and in this case, it's very, very complex.
We had Liz Truss, the Foreign Secretary, on Sky News on Sunday, and she said the Russian oligarchs would have "nowhere to hide". She said the UK government was going to be sanctioning Russians on a weekly basis. Rather than sanctioning them all at once, the government thought it would be more effective and put more pressure on Putin if they did it drip by drip, week by week. So this is a real threat that's hanging over Abramovich.
It would be very difficult for him to sell it Chelsea if his assets are frozen. All his bank accounts in the UK would be frozen so it would be very difficult for him to do business. He owns Chelsea through a complex web of companies that are based outside the UK, so technically there may still be a way for him to sell Chelsea. But I think in reality it would be very, very difficult. Asked whether Abramovich would be able to sell Chelsea if he was the subject of sanctions from the UK government, Masters said: "I don't think that will work."
There's also the added complication as to whether any banks or financial institutions would want to get involved in a deal that involved someone who had been sanctioned, or was potentially going to be sanctioned, by the UK government?
This is a bit unclear and we have tried to get some clarity on it. All we are being told is the money he would get from the sale, minus legal fees and costs associated with the sale, would be put into this new foundation he's setting up. On paper, it looks a very generous gesture, but it is unclear what the reality will be.
I think it is very unlikely he would get anywhere near that amount of money. For instance, some of Manchester United's shares are listed on the New York Stock Exchange, so we know that club is valued at around £2billion. Historically, Manchester United are a bigger club and a bigger business than Chelsea. They have got more fans worldwide, they have got a bigger stadium, so you would think it's unlikely that Chelsea are worth more than Manchester United.
Then you factor in that you could view this as Abramovich selling a distressed asset, which would mean that any potential buyers would try to strike the best deal possible. So if people did want to buy it, they would be looking at getting it for much less than £3bn.
Abramovich has instructed The Raine Group to handle the sale, and they have been asked to find people who are potentially interested. They are asking people who are interested to sign a non-disclosure agreement and to put in indicative bids by March 15. So that's the process you have to go through if you are interested in buying Chelsea.
In normal circumstances - if Russia had not invaded Ukraine - if Roman Abramovich had said he wanted to sell Chelsea, there would be a queue outside Stamford Bridge of billionaires and consortiums from all around the world. A club the size of Chelsea, who are reigning world and European champions, one of the biggest clubs in the world and based in London - a lot of people want Chelsea. But that was before Putin decided to invade Ukraine. Now I think it's a totally different situation, and if you were a businessperson, you would be thinking about the damage it could potentially do to your reputation. Also, would you be able to get it cheaper if you wait?
Abramovich has come out and said he wants to do this, but it does not mean he's going to be able to do it. On Saturday, he said he wanted to hand over control of the club to the trustees of Chelsea's charitable foundation, and that plan unravelled pretty quickly, so I would just be very careful about whether what he's proposing can actually materialise.
I think one way it could happen is if there's a quick sale - if somebody emerges in the next few days who's got the money and is willing to do a very quick deal. That would suit everyone, and in a way it would suit the UK government as well. It's one thing seizing yachts and houses and freezing bank accounts, but it's another thing for a government to seize an asset like Chelsea. It's unheard of in this country. So if a mystery buyer does emerge in the next few days, I think that would be the best solution for everyone.
Masters said a quick sale of Chelsea could be possible, explaining: "I think the quickest one we've [the Premier League] ever done is 10 days. That's not to say it can't be beaten, but normally they take a number of weeks. It depends on the complexity of the information."
I think the Saudi deal to buy Newcastle was so complicated and controversial - and still is - that if you factored in they would be buying it off Roman Abramovich, who could potentially be sanctioned by the UK government, that lifts it to an even more extreme level of controversy. I don't think they would be kicking themselves.
A lot of people who are interested in buying Premier League clubs will be keeping a close eye on what is happening at Chelsea and trying to work out if now is the right time for them to make a move, because I think any potential bid for Chelsea is fraught with real difficulties. We should not think that, because it's for sale, someone's going to come along and buy it. It will be much more complicated than that, unless there is a mystery buyer out there who maybe knows Abramovich, is not connected with Russia at all and has the kind of money it would take to buy Chelsea.
If Abramovich cannot sell the club, Chelsea are basically going to be treading water for the foreseeable future. He's not going to be putting money into the club anymore. In 2020 he put in another £200m. Although Chelsea made money from selling Eden Hazard, the £200m went towards the day-to-day running of the club and towards buying players like Timo Werner and Kai Havertz.
Without Abramovich's money, Chelsea will have to live within their means. They will have to run more like a conventional business. What would that mean for the players that are there? Would they interpret that as a lack of ambition and want to go somewhere else? It feels a bit crazy to be talking about transfers, but Chelsea would not be big players in the transfer market, in the short term at least.
If Abramovich does not sell, players who are out of contract at the club might be thinking they would rather go elsewhere, where things are a bit more settled.
If the club is not sold, Chelsea are not going to have the finances to do the big deals. Also, the agents of the big players are going to be advising them that maybe this is not the right time to join Chelsea, because the future is so uncertain. If you are signing a four, five-year contract and if you have got the choice between Manchester City and Chelsea, obviously you are going to choose Manchester City because you do not know what's going to be happening at Chelsea in the next few months or years. That's if a new owner does not materialise.
Thomas Tuchel has a contract until 2024 and, having dealt with him for a while and knowing the type of person that he is, I don't think he's going to walk out on Chelsea because of this. But change can disrupt everything. If new owners come in, will they want their own person to be the manager? On the face of it, why wouldn't you want Tuchel to be a part of your plans? He's won the Champions League and the Club World Cup. I don't get any sense from him that he's not committed to Chelsea. But in the long term, who knows what will happen?
However, the sense I'm getting is that, if the club is sold, then Bruce Buck and Marina Granovskaia are unlikely to stay.
It all depends on who the new owner is. It's undeniable how much money Abramovich has put into Chelsea, how committed he was to the club and how he's transformed their fortunes. But since 2018, when he withdrew his application for a tier one visa and pulled the plug on the redevelopment of Stamford Bridge, there's been a lot of uncertainty off the pitch about how committed he is to the club going forward. If a new owner comes in who's not associated with Russia - for instance, a new American owner - they may be able to get the funding in place to build a new stadium at Stamford Bridge and they may be able to invest in the playing side as well.
One of the things holding Chelsea back is the stadium, and while Abramovich owns Chelsea, there is no realistic prospect that he is going to build a new one. Those plans had been put on hold. Off the pitch, the training ground, the squad, the culture, the academy are all first class, but the one thing that's lagging a little behind the competition has been the stadium. You cannot compare Stamford Bridge to Tottenham's stadium or the Emirates - they are getting left behind somewhat. So I think, for a new owner coming in, that is one of the first things they will need to look at. But let's be honest - to redevelop Stamford Bridge is going to cost another £1-2bn, so that's something else a new owner has to factor in.
