Is the Chelsea deal off?

What’s the Chelsea situation now, you may be wondering?

It’s less than two weeks till 31 May, which is the deadline for clubs to be registered for next season’s European competitions. As things stand, Chelsea’s licence from the UK Government to continue ‘football-related activities’ expires on the same day, so something needs to change by then if Chelsea are to play in Europe.

Then 8 June is the date the Premier League is scheduled to confirm its members for next season, so Chelsea also need a licence for that.

Even if the current temporary licence is extended, Chelsea can’t buy or sell players or negotiate other contracts under the current terms, so no new players and the new sponsorship deals that have been announced would remain on hold.

Don’t forget it was Abramovich’s idea to sell Chelsea, not the Government’s. He made the decision before he was sanctioned, as I documented previously. But given the sanctions, Chelsea now need a new owner in order to operate as normal.

Happier times for Chelsea – a close up view of a magnificent goal 20 years ago

Latest information suggests that Abramovich wants the £1.5bn+ of loans owed to him by Chelsea to be paid to Camberley International Investments (CII), a company registered in Jersey. No one seems to know who owns CII and a Government source has described the ownership as ‘murky and complicated’. Chelsea have apparently told the Government they don’t know who owns CII and can’t talk to the owners, even though CII have provided £1.5bn+ to Fordstam, Chelsea’s parent company.

There is good news for Todd Boehly and his consortium. Firstly they appear to have passed the very stringent Premier League ‘owners and directors test’, though as the famously repressive Saudi regime did the same you may think it would have been quite hard not to. However, the test is less about morals than about whether a buyer has deep enough pockets.

Secondly it seems that repaying the loans to Abramovich is not additional to the purchase price of £2.5bn (or £2.6bn as some are now quoting it), but will come out of that sum. So the problem is just where the money is going.

Abramovich says £1.5bn+ must go to CII; the Government says that’s not happening because they don’t know who owns CII or where the money will end up.

Other sources ‘close to Abramovich’ claim it was Chelsea’s idea to pay money to CII, though none of the official statements on their website back that up and I can’t come up with a single reason why a post-Abramovich Chelsea would think that was a good plan.

Is this likely to be resolved somehow by the end of May? Unfortunately, yes. The Government don’t want the embarrassment of Chelsea being thrown out of all competitions, however amusing it would be for the rest of us. So I can see them relaxing the terms of the licence even if no money has changed hands by then.

When the new owners are in place they will still have the problem of repaying the money they’re borrowing to fund the purchase, plus finding the promised £1.75bn for infrastructure spend, though that is over 10 years. So even if the deal goes through it’s not possible that Chelsea are going to spend at the same rate they have since 2003.

Twitter: @P_h_i_1

 

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