Roman Abramovich has taken what he describes as an "incredibly difficult" decision to sell Chelsea, but the uncertainty surrounding the club is far from over.
The 55-year-old initially attempted to separate the Blues from any potential personal sanction from the UK government relating to Russia's invasion of Ukraine last Saturday, announcing the night before Chelsea lost the Carabao Cup final to Liverpool that he was passing "stewardship and care" of the club to Chelsea's charitable foundation. Once it became clear that ambiguous statement was not enough to insulate the club -- and the trustees involved expressed their reluctance to assume such responsibility -- Abramovich released a second statement just over an hour before Tuesday's FA Cup fifth-round win at Luton Town confirming his 19-year tenure will be coming to an end.
"As I have stated before, I have always taken decisions with the club's best interest at heart," it read. "In the current situation, I have therefore taken the decision to sell the club as I believe this is in the best interest of the club, the fans, the employees, as well as the club's sponsors and partners. The sale of the club will not be fast-tracked, but will follow due process."
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That process has now begun in earnest, Abramovich's public declaration acting as what he hopes will be the catalyst for a race between potential buyers that pushes the price somewhere close to or even north of his £3 billion valuation.
Sources have told ESPN that as many as 20 different parties have expressed an interest by contacting U.S. firm Raine Group, who are running the sale as reported on Wednesday. Los Angeles Dodgers part-owner Todd Boehly is leading a consortium attempting to strike an agreement, with an official bid expected within the coming days. On Friday, ESPN reported that at least 10 of those bids are considered "credible," including RedBird Capital Partners (which involves Oakland Athletics' executive vice president Billy Beane) and Michael Rubin, owner of sports merchandise group Fanatics. (The latter have since denied interest.)
It is, however, a chaotic and unpredictable situation given the reasons behind Abramovich's decision to sale, the wider political climate and Chelsea's current state.
ESPN explores the detail behind what will rank as the biggest transaction in Premier League history.
With additional reporting by Mark Ogden
Why is Abramovich selling?
Abramovich has always strenuously denied any links to Russian President Vladimir Putin's regime, and he continues to deny that relationship. Yet the timing of his sudden decision, so soon after the invasion of Ukraine, is hard to separate.
The source of Abramovich's wealth came from dividends and sales of privatised assets acquired from the former Soviet Union. It is said some of these deals helped former Russian President Boris Yeltsin win re-election in 1996 before keeping his successor, Putin, in power. The integrity of those deals has often been questioned, no more so than when fellow oligarch Boris Berezovsky sued Abramovich in 2011 for €5bn over what he claimed he were ill-gotten gains over the sale of the oil firm they co-founded, Sibneft. Abramovich won that case in 2012, but during the trial, Jonathan Sumption QC, acting for Abramovich, admitted that the process of auctioning Sibneft "was easy to rig and was in fact rigged."
Wider tensions between Russia and the West have grown in recent years amid criticism, perhaps most prominently from the US government, that London has become awash with questionably-sourced foreign cash. After the attempted poisoning of former Russian military intelligence officer turned MI6 informant Sergei Skripal in 2018, the UK began denying investor visas to high-net-worth Russians. Abramovich withdrew his application for an extension.
Suspicions have continued to follow Abramovich, despite repeated denials of any wrongdoing from both his lawyers and Chelsea, and Russia's invasion of Ukraine has brought the issue of London's role in laundering money back to the surface. In the UK Parliament last week, Labour MP Chris Bryant directly quoted what he claimed was a Home Office document pertaining to Abramovich.
"I've got hold of a leaked document from 2019, from the Home Office, which says in relation to Mr Abramovich: 'As part of HMG's [Her Majesty's government] Russia strategy aimed at targeting illicit finance and malign activity, Abramovich remains of interest to HMG due to his links to the Russian state and his public association with corrupt activity and practices. An example of this is Abramovich admitting in court proceedings that he paid for political influence. Therefore HMG is focused on ensuring individuals linked to illicit finance and malign activity are unable to base themselves in the UK, and will use the relevant tools at its disposal, including immigration powers, to prevent this.'"
Labour leader Sir Keir Starmer called on Abramovich to face sanctions on Wednesday, hours before Abramovich went public with his decision to sell. When contacted by ESPN, the Home Office refused to confirm whether Abramovich is a person of interest or under active investigation, but they did refer us to the government's Economic Crime Bill, which proposes to crack down on foreign criminals using UK property to launder money.
Abramovich, who continues to protest his innocence as the conflict worsens, has around £200m worth of property in England in addition to owning Chelsea, into whom he has invested more than £2bn since buying the club for £140m in 2003. He originally thought he could separate the club from any possible UK government sanction -- i.e. a freeze on assets, including Chelsea -- by passing "stewardship and care" of the club to Chelsea's trustees on their charitable foundation.
Why didn't that "stewardship" effort work?
Nobody really knew what it meant. Abramovich has not been involved in the day-to-day running of the club since his visa expired in 2018 -- and in reality, some time before that -- and sources have told ESPN that the trustees were completely blindsided by his Saturday night statement that they would be put in charge of running the club.
It appears, in hindsight, to be a clever PR move without any real substance, the same category in which skeptics have put the claim Abramovich was trying to somehow broker peace between Ukraine and Russia during talks in Belarus. The only person on record to verify this is a spokesperson for Abramovich and if is it true, how does that square with the repeated briefings that he is detached from politics and Putin?
Sources have told ESPN that potential bidders have been set a deadline of March 15 by Raine Capital, under instruction from Abramovich, to submit their proposals, which suggests both a degree of urgency and also offers Abramovich a sliver of breathing space in which to operate. Within that small window, Abramovich will hope spark a scramble for Chelsea that gets somewhere close to the £3bn minimum he is looking for.
Dodgers part-owner Boehly has a head-start on other prospective buyers, having explored a deal to acquire Chelsea (and also Tottenham) in 2019 and getting as far as tabling a £2.2bn offer, which was rejected. Sources have told ESPN that Boehly is fronting a consortium alongside Swiss billionaire Hansjorg Wyss and at least one other unnamed businessman with an offer anticipated in the coming days. It is, however, expected to be in the region of Boehly's 2019 bid -- well short of Abramovich's valuation. Sir Jim Ratcliffe, Britain's richest man according to Forbes in 2021, has distanced himself from an offer despite previously exploring a deal prior to the COVID-19 pandemic only to decide the valuation was too high.
Sources have told ESPN that there could be as many as 20 interested parties by the end of the week, but the number of initial enquiries Raine have received far exceeds that number.
How attractive a proposition is Chelsea?
They are the reigning world and European champions located in the most sought-after part of one of the finest capital cities in the world. Dealing with Abramovich has what a PR consultant might call "toxic optics" given the reason he is selling, but the Russian has sought to offset that by promising to donate the "net proceeds" from any sale to the victims of the war in Ukraine.
It is so far unclear what "net proceeds" actually means, where the money would specifically go or how "victims of the war in Ukraine" would be defined and aided, but Abramovich has further sweetened the deal by stating he will not ask for his £1.514bn loan to be repaid. This frees the club of a huge debt, adding obvious appeal to any prospective buyer, but it should also be noted that Abramovich's statement is not the same as definitively writing off the debt. A possible workaround could be converting it into equity, but such complex details are yet to be determined and will depend on negotiations over the structure of any agreement.
The lack of clarity over some aspects here underlines the haste with which this entire sale is being conducted; last Friday, Chelsea were preparing for the latest cup final in a trophy-laden Abramovich era. This Friday, they're preparing for life without Abramovich altogether.
Uncertainty abounds: One source with close ties to Chelsea described all parties as "landing in the same place over some of the finer points - which is a sea of confusion."
The level of pressure being applied to Abramovich will palpably affect his ability to negotiate. Furthermore, there is the issue of Chelsea's stadium.
Planning permission on proposals to demolish the 41,800-seat Stamford Bridge with a new 61,000-seat arena expired in the middle of 2021. Overhauling the stadium is the key to Chelsea becoming self-sustainable -- the size and state of their home ground lags behind the Premier League's other traditional Big Six, and that lack of matchday revenue makes them more reliant on a rich benefactor to bankroll success.
After winning the Champions League, Chelsea posted a loss (for the year to June 30, 2021) of £145.6m after tax. That was partly because of coronavirus restrictions forcing games behind closed doors, but they have historically struggled: Between 2004 and 2013, Chelsea lost over £670m and recorded just one profitable year. More recently they have struggled -- and lately failed -- to break even.
In a typical year, Chelsea generate £70m to £80m from ticket sales. United have earned £147m in one season, Arsenal almost £130m. Redeveloping Chelsea's stadium is the key play for a new investor, but sources close to the project now believe that a three-year project involving relocating the team to Wembley while developing Stamford Bridge would cost north of £2bn. That's £2bn on top of the asking price, and you wouldn't own the freehold.
The club continues to rent the ground from Chelsea Pitch Owners, a not-for-profit group made up of around 13,000 individual shareholders who have the freehold -- meaning they own the land and any building on it -- for the duration of a 199-year deal, struck with former owner Ken Bates. Chelsea pay a nominal rent, but as part of that agreement, any owner that tries to move the club away from Stamford Bridge forfeits the right to call the team Chelsea Football Club.
One other point it might be worth making is about the prospect of sanctions. It's impossible to know how likely they are, or if they are coming, but the timing of Abramovich's decision to sell was no coincidence given the mounting pressure on the UK government to sanction high-net-worth Russians with assets in the country. (The European Union have already done this with a number of oligarchs, including former Arsenal shareholder Alisher Usmanov.)
In the UK, the Treasury's Office of Financial Sanctions would take action if Abramovich was added to what is known as a "Consolidated List" of financial targets. Nowhere -- not in the United States, the European Union or the UK -- has Abramovich been added to such a list at the time of this writing. Should that happen, Chelsea as an asset could be frozen, which would make a sale extremely difficult given that the government could hold the money raised from a sale to scrutinise its origins and its destination.
Chelsea's ability to operate as a club would also be severely restricted, requiring specific licences to even pay members of staff. Transfer spending would become difficult as not only would Abramovich be unable to invest further funds, but it may be the case that a freeze would extend to Chelsea's pre-existing agreements -- for example, outstanding installments due on incoming and outgoing transfers.
Despite the obvious pressures this brings, co-founder of Raine Group, Joe Ravitch, insisted there is no immediate urgency to complete a deal. "We are not going to rush anything - it is very important that Chelsea have the right owner to guide the club forward," Ravitch told news agency Reuters.
That will be Abramovich's preference, but it's clear the clock is ticking and there's plenty to resolve.