U.K. Sanctions Leave Roman Abramovich And A Growing List Of Chelsea Suitors In Limbo

Roman Abramovich’s time in Stamford Bridge is coming to an end, but the billionaire’s efforts to kickstart a quick sale of Chelsea FC that he’s been mulling for at least three years have just been scuttled.

On Thursday, after weeks of intense debate in parliament, the U.K. government announced sanctions against Abramovich and six other Russian oligarchs, restricting their business interests, barring any travel into the country and freezing their assets, which includes the Premier League’s fourth-most valuable club. A source tells Forbes that previous inquiries have sped along a sale process, which is being led by sports investment bankers The Raine Group, that kicked into overdrive following the unified international response to Russia’s invasion of Ukraine.

“This has never been about business nor money for me, but about pure passion for the game and Club,” Abramovich wrote in a March 2 statement announcing his intentions that he signed, simply, “Roman.”

Such sentiment is not likely to hold much sway with the British government even as names emerge of potential buyers–from U.K. property magnate Nick Candy to UFC fighter Conor McGregor–despite a few of them having a thin chance of actually succeeding.

A source at the Department for Digital, Culture, Media & Sport confirmed that any potential transaction is now prohibited. However, the source added that U.K. lawmakers are very much “open to the sale of the club” and would consider it if Chelsea were to apply for a license to allow that sale to happen. Following the sanctions, Abramovich would receive none of the proceeds of a deal. Last week, he turned over stewardship (not ownership) of the club to the trustees of Chelsea’s charitable foundation.

Still, multiple sources have confirmed to Forbes that Abramovich was fielding offers as early as three years ago, with at least four parties having made serious inquiries but unable to reach an agreement. Billionaire Todd Boehly, part owner of two Los Angeles teams, the Dodgers and the Lakers, reportedly made a $2.9 billion offer in 2019, according to Sky Sports.

After the invasion, Abramovich went public with his intent to sell, hiring Raine, which led to a steady stream of speculation about potential buyers that seemed to indicate a resolution as early as Tuesday, the bank’s deadline for offers. Among the more prominent bids being reported are a joint effort from Boehly and Swiss billionaire Hansjoerg Wyss, Woody Johnson, the New York Jets owner and former U.S. ambassador to the U.K., and Apollo Global Management cofounder Josh Harris. Some potential buyers are well head of the pack, having conducted due diligence in previous efforts.

Throughout the last two decades, Chelsea’s saving grace has been Abramovich’s deep pockets. The 55-year-old billionaire has loaned Chelsea $2 billion of his own money since buying the club for $190 million in 2003. Abramovich’s funding has led to 19 major trophies during his tenure, including the Champions League crown in 2021, marking the most successful period in the club’s history and turning the club into a global soccer brand. That financial pipeline is now gone.

The sale and the future of Chelsea—the world’s seventh-most valuable soccer team at $3.2 billion–are now in limbo. The club can’t sell merchandise and tickets, acquire new players or renegotiate contracts, all while losses mount.

“Operationally Chelsea has lost money more quickly than any club in the history of the Premier League,” Kieran Maguire, a soccer-finance lecturer at the University of Liverpool, tells Forbes, adding that the cost of the sanctions is a “cause for concern” for the club’s future.

According to the annual statements from Chelsea’s parent company, Fordstam Limited, the club lost $167 million over the last two fiscal years while spending $396 million on acquiring new players over the last two seasons. (The impact of Covid-19 largely influenced that loss, which still dwarfed the rest of Premier League clubs.)

If Chelsea does in fact proceed with a sale, the question of price looms large. Abramovich’s press release from last week suggested he was willing to waive the $2 billion loan owed to him by Chelsea and donate the “net proceeds” of a sale to the victims of the war in Ukraine. Exactly what Abramovich means by “net proceeds” is unclear and something the U.K. government is looking to confirm before changing the license and allowing a sale. Maguire says that the charitable component may provide a little wiggle room around government restrictions to get a deal done, saying the government could “observe the transactions and effectively insist the money ends up [in]…the right place.”

Any new owners at this point would have to consider the reputational damage of Chelsea’s association with Abramovich. Conrad Wiacek, head of sports analysis at GlobalData, says Chelsea’s long-standing, multi-year commercial agreements are now under threat. Mobile telecom brand Three, which spends $55.2 million annually for a front-of-shirt deal with Chelsea, has already asked to suspend its sponsorship. The club’s $72 million kit deal with Nike could be next. “While Chelsea has a sporting license to continue trading as a soccer club, many brands will be wary of guilt by association,” Wiacek says. There’s also the issue of Stamford Bridge, Chelsea’s home stadium that remains woefully outdated as London rivals Arsenal, Tottenham and West Ham have all recently moved into state of the art buildings.

Who that might be remains a subject of speculation, with Marc Ganis, president of the consulting firm Sportscorp, seeing the bids from Johnson, Wyss/Boehly and one from the Ricketts family, owner of the Chicago Cubs, as “extremely formidable.” Others are more complicated. Harris, for example, owns shares in Crystal Palace, another Premier League club. He would need to divest, which could be a months-long process by itself. Gerry Cardinale, founder of RedBird Capital, was rumored to be mulling a bid, but sources close to the former Goldman Sachs partner said he was unlikely to bid because of his ownership stake in Liverpool FC through Fenway Sports Group.

For now, Abramovich has to contend with the implications of the U.K. government’s latest actions, which were enacted as part of an effort to “isolate Putin and those around him.” Prime Minister Boris Johnson said in the statement, “There can be no safe havens for those who have supported Putin’s vicious assault on Ukraine.” Foreign secretary Liz Truss added, “Oligarchs and kleptocrats have no place in our economy or society. With their close links to Putin they are complicit in his aggression.”

Although the U.K. published a license that allows a number of “football-related activities to continue at Chelsea,” including permitting the club to continue playing matches, Chelsea will play soccer under the shadow of sanctions until there is a significant change in the global geopolitical landscape, whether it be a regime change in Russia or the start of serious peace talks in Ukraine. Chelsea said in a statement that the club is “seeking permission for the license to be amended in order to allow the Club to operate as normal as possible.”

Unless a buyer is found, Chelsea fans can expect tough times ahead. Chelsea did not respond to questions on the sanctions, the appeal process, or give an update on the sale of the club.