What’s happening at Chelsea? How much are they being sold for? Does Roman Abramovich want his loans back or not? It’s all got a bit murky.
If you look at the responses to this tweet:
you’ll see that most Chelsea fans don’t appear to have a clue about the whole situation, which in itself is quite funny.
It’s clear that the club needs a new owner by the end of May, or they won’t be licenced to take part in the Premier League next season. It’s clear that an American consortium fronted by LA Dodgers owner Todd Boehly is the approved buyer. What’s not clear is how much will be paid and who it will be paid to.
Journalists talk of ‘a deal worth £4.25bn’ and even ‘Boehly buying the club for £4.25bn’, but that figure seems to include a promise to spend £1.75bn on the club infrastructure over the next 10 years separate from the purchase price of £2.5bn.
Then there’s the loans that Abramovich has made to Chelsea, which total somewhere between £1.5bn and £1.7bn depending on your source of information (call it £1.5bn for simplicity). Is that sum being repaid to Abramovich? Or paid somewhere else, or just written off? Whenever anybody has tried to compare Abramovich’s ownership with the Glasers or Kroenkes I’ve said there’s no point – their intentions are completely different, because the others want to make money and Abramovich is just writing this money off. Well, that was then and this is now. Putin’s actions have changed what Abramovich wants and can do. So is he asking for his massive loans to be repaid or not?
Let’s look at the official announcements. The recent action started on 26 February 2022, two days after Russia invaded Ukraine, when Abramovich announced via the Chelsea website:
“I am today giving trustees of Chelsea’s charitable Foundation the stewardship and care of Chelsea FC.”
This was an obvious message to the UK Government: “No need to seize control of Chelsea, I don’t even run it.”
The following day Chelsea made a statement about the Russian invasion of Ukraine: “The situation in Ukraine is horrific and devastating. Chelsea FC’s thoughts are with everyone in Ukraine. Everyone at the club is praying for peace.”
With the other statements I’m just quoting relevant parts, but in this case that’s the full thing. No mention of the fact that if Russia withdrew and stopped killing Ukrainians there would immediately be peace.
A few days later on 2 March, Abramovich had decided giving control of the club to its own charitable foundation wasn’t enough, and he needed to take the money and run:
“I have taken the decision to sell the Club, as I believe this is in the best interest of the Club.
I will not be asking for any loans to be repaid. I have instructed my team to set up a charitable foundation where all net proceeds from the sale will be donated. The foundation will be for the benefit of all victims of the war in Ukraine.”
Key takeaways here:
- No loans to be repaid
- Net proceeds (undefined how the net figure will be arrived at) to go to a new charity he will control
On 10 March came this announcement:
“Chelsea Football Club has been advised that its owner Roman Abramovich has been sanctioned by the UK Government.”
So now the Government took control of the sale process and the money was, for the moment, not going to Abramovich.
The bids started being prepared.
The asking price was £2.5bn, and if the buyer had to repay the loans as well that would make it £4bn, but Abramovich had said that wasn’t necessary.
However, on 3 May The Times reported that Abramovich did want the debt paid to a Jersey-based company called Camberley International Investments.
The latest accounts of Fordstam, Chelsea’s parent company, say that “Camberley International Investments Ltd provides funding to Fordstam Ltd and its subsidiaries as required to enable the Group to continue as a going concern.” So Camberley International Investments Ltd is the vehicle used by Abramovich to feed money into Chelsea to keep it afloat, and now that’s where he wants his money repaid. No one seems to be very clear who owns Camberley International Investments Ltd, but if it’s not controlled by Abramovich then I’m a teapot.
On 5 May Chelsea issued another statement on behalf of their outgoing owner. This was a bit more complicated, so I’ll go through the full text:
“Mr Abramovich’s intentions in relation to gifting the proceeds from the Chelsea sale to charity have not changed.
Since the initial announcement, Mr Abramovich’s team has identified senior representatives from UN bodies and large global charitable organizations who have been tasked with forming a Foundation and setting out a plan for its activities.”
Ok – nothing new so far.
“Secondly, Mr Abramovich has not asked for any loan to be repaid to him – such suggestions are entirely false – as are suggestions that Mr Abramovich increased the price of the Club last minute.”
Note the words “repaid to him”. Previously they didn’t have to be repaid at all, now they don’t have to be “repaid to him”.
“As part of Mr Abramovich’s objective to find a good custodian for Chelsea FC, he has however encouraged each bidder throughout this process to commit investing in the Club – including in the Academy, Women’s team, necessary redevelopment of the stadium as well as maintaining the work of Chelsea Foundation.”
In other words, “Please continue to pump in £50m a year to keep everyone at Chelsea in the manner to which they’ve become accustomed.” The club might be a bit stuffed otherwise.
“Following sanctions and other restrictions imposed on Mr Abramovich by the UK since announcing that the Club would be sold, the loan has also become subject to EU sanctions. That means that the funds will be frozen and subject to a legal procedure governed by authorities. These funds are still earmarked for the Foundation. The Government are aware of these restrictions as well as the legal implications.”
Note the highlighted words: we’ve gone from “The loans don’t need to be repaid” to “The loans need to be paid to a new foundation I’ve set up so I can give the money to whoever I want.”
The last paragraph of the statement was: “To be clear, Mr Abramovich has no access or control of these funds and will not have any access or control of these funds following the sale. Despite the changing circumstances since his initial announcement – he remains committed to finding a good custodian for Chelsea FC and making sure the proceeds go to good causes.”
Well he doesn’t have any access or control right now, because nothing has been paid. And although he claims he won’t have any control after the sale, he wants the money paid to one of his companies so his foundation can decide where it goes. Call me cynical, but this is a very long way from the statement on 2 March saying “I will not be asking for any loans to be repaid”.
Will this be sorted out by the end of May? Who knows. There may still be hope for this:
In part 2: £4bn for Chelsea? What kind of crazy number-dyslexic fool is Todd Boehly?