How the Russia Ukraine War has sent Shockwaves into the World of Football and Chelsea Football Club

Written by: Harry Colvin

When Vladimir Putin invaded Ukraine in February, it created shockwaves around the world, and those waves were not excluded from sport. In early March, as the war between Russia and Ukraine escalated, rumors emerged about the United Kingdom’s possible plans to sanction Russian oligarch Roman Abramovich, whose main property in the United Kingdom is Chelsea Football Club, a club that he advanced into a two-time European Champion and most recently the 2022 World Champion. By the time the reports about the potential sanctions against Abramovic had begun, the British government had already sanctioned over 100 Russian individuals for their speculated connection to Putin. Then, on Mar. 10, the British government officially sanctioned Abramovich, freezing his bank accounts and assets in Britain, passing control of the West London football club into the hands of the government, creating an unusual and potentially unethical situation. 

Abramovich began his money-making journey after the collapse of the Soviet Union in 1991 by connecting himself with oligarch Boris Berezovsky, who was close friends with then-Russian President Boris Yeltsin. Together, they entered the emerging oil industry in Russia, buying Sibneft, for £120 million. However, critics claim the auction was rigged. Berezovsky was exiled in 2000 under Vladimir Putin’s presidency and Abramovich took control of all of Berezovsky’s assets. In 2005, Abramovich sold Sibneft to state-run oil company Gazprom for £7.5 billion, a controversial deal that author Catherine Belton claims left Abramovich very little choice but to submit to “KGB capitalism.” 

Before the sale of Sibneft, Roman Abramovich bought Chelsea F.C. for £140 million in 2003, a purchase that would change not only his life but football forever. Abramovich would invest massively in the following years, unlike any football club owner in Europe had done before. The club spent over £200 million on players over the next two years and would continue to spend similar funds for the next two decades. Gradually, other clubs in England began to match Chelsea’s spending as more wealthy owners came into the game and English clubs’ advertising and television income revenues exploded. After not winning a league title since 1955/56, Chelsea went on to win five league titles under Abramovich’s ownership, two UEFA Champions League titles (the European club tournament) and numerous other trophies. 

When asked about Britain’s sanctions against Abramovich and six other Russians, who are worth a combined £17 billion, Prime Minister Boris Johnson said, “You have to have clear evidence that they are connected to the Putin regime, and that has been established. That’s why we are going ahead with the sanctions that we are.” Johnson’s policy decisions put Britain at the forefront of the West’s response to Russia’s attack on Ukraine. 

After rumors of the sanctions began to circulate in early March, Abramovich released a statement through Chelsea F.C. media to inform the public that he was planning on selling the club. The Russian oligarch stated that he felt that it was in the best interest of the club for him to do so, considering the current situation. Additionally, he included the following: 

“I will not be asking for any loans to be repaid. This has never been about business nor money for me, but about pure passion for the game and Club. Moreover, 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. This includes providing critical funds towards the urgent and immediate needs of victims, as well as supporting the long-term work of recovery.”

The announcement to sell was clearly a panicked move. Rumors arose and Abramovich knew that if he had a chance to sell the club, he would need to do so quickly; It would be the only way for Abramovich to ensure the club was left in safe hands and that he would have control over the money from the sale. 

However, Abramovichwas never able to sell the club because, on Mar. 10, the British government ultimately sanctioned the 55-year-old, taking control of the club and all of its value. Over the past couple of weeks, the media has speculated that some of the wealthiest individuals and groups in the world will place bids for the club. The sale of the club is being administered by The Raine Group LLC, a global merchant bank focused on advising and investing in technology, media and telecom. 

It is estimated that there are 30 prospective bidders, with a few standout suitors confirming their interest. One of those bidders is Swiss billionaire Hansjorg Wyss, a medical device manufacturer that sold his company Synthes USA to Johnson and Johnson for $19.7 billion in 2012. Another is Todd Boehly, an American billionaire who currently owns the Los Angeles Dodgers baseball team in the MLB and the Los Angeles Sparks, a team in the WNBA. In 2019, Boehly placed a £2.24 billion bid for Chelsea that was ultimately denied. Interest from Saudi Arabia has also arose, as it is a country with ownership stakes in other football clubs, including a controversial investment into British club Newcastle United. 

The Raine Group announced that they are seeking a bid of around £3 billion for the London club. However, it is unclear what will happen to that gargantuan amount of money. Kieran Maguire, a soccer finance expert and author of The Price of Football said that the money could be put in escrow — a legal arrangement in which a third party temporarily holds the money until an agreement is made on where it will go. Additionally, it is unclear who has the ultimate say on what bid will be accepted. Usually, this is a decision left up to the owner, who would be Abramovich, but this is evidently not a usual case. 

The fans of Chelsea F.C. have largely reacted in public support of Abramovich, which has left a sour taste in the mouths of the football world. In matches throughout March, Chelsea fans have sung Abramovich’s name in support of the Russian oligarch, despite the grim conflict between Ukraine and Russia and Abramovich’s links to Putin. 

This whole situation occurs while Chelsea is competing in an extremely tough schedule as the season approaches its final stage. They have been playing matches throughout England and Europe to compete in various domestic competitions and the UEFA Champions League. Due to the freezing of Abramovich’s assets, the club faces a number of restrictions in its day-to-day business and expenses. They are essentially barred from spending or making any money, though exceptions for matchday travel expenditures have been made. Chelsea has had to cease the sale of their merchandise and close their club shop, end the sale of matchday tickets (though season tickets are sold out) and cannot sign any of their players for contract extensions. 

The club had been negotiating new contracts for three of their star defenders in Caesar Azpilicueta, Antonio Rüdiger and Andreas Christensen. Until the club is bought, the club will be unable to re-sign them. They will leave for free if no new owner arrives before June 1. 

The government has made provisions available to ensure that the club can travel to their away matches, via plane or bus. The manager of the club, Thomas Tuchel, ensured that the noise is not affecting the team’s attitude and even joked that he would “drive a seven-seater van” to their match in Lille, France earlier in March. 

Another complex situation the club faces is with its advertisers. Three, the club’s main kit sponsor, has suspended its sponsorship, estimated to be about £40 million per year, in the wake of the sanctions dished out to Abramovich. In contrast, Nike, the supplier and sponsor of the club’s kits announced that they will “remain committed” to the club despite the controversy. 

With questions looming over where the money from the sale will go and who has the final say, there remains a sense of unease over the government’s decision to take control of the club. Overall, there is a general acknowledgment that Abramovich has a significant relationship with Putin. The sanctions were a correct move in terms of moral considerations. However, the sanctions have certainly caused harm to the club and its employees, with layoffs quickly ensuing. This comes nearly two years after Chelsea was praised for being one of the few Premier League clubs that continued to pay their employees full salaries and wages amid the beginning of the COVID-19 pandemic.

Chelsea’s situation is extremely delicate and unpredictable. We can only hope that a new owner can come in soon so that the West London club can operate as they are in the right to. With the decision of the sale in the hands of the government, it will be interesting to see if the chosen buyer will be one that is selected in the best interest of the club, or perhaps one that benefits the government directly. Abramovich stated that all profits of his sale would be going to the victims of the war in Ukraine, but it remains to be known whether the government will follow through with that plan given the sanctions against the Russian oligarch. 

With the rapid growth of sports in the last few decades, there will never be a world where they aren’t connected or affected by politics. Clubs are being used as sportswashing tools by oppressive governments, a transgender swimmer winning a championship is causing quite the stir and black footballers in Italy are victims of racist abuse on nearly a weekly basis. When sport becomes such an international and culturally varied event, it is only natural for politics to become ingrained into the sports world.