Explained: What UK government sanctions on Chelsea owner Roman Abramovich mean for the club

London, United Kingdom: The future of European champions Chelsea has been plunged into doubt after Russian owner Roman Abramovich was hit with UK government sanctions in response to the invasion of Ukraine.

Abramovich has bankrolled the most successful era in the Blues’ history since taking charge in 2003 — the club have won five Premier League titles and two Champions Leagues among 19 major trophies.

Why are sanctions being imposed on Abramovich?

The billionaire — described by the UK government as part of Russian President Vladimir Putin’s inner circle — had already signalled his intent to sell Chelsea due to the looming threat of sanctions.

The government called Abramovich a “pro-Kremlin oligarch” who is worth more than 9 billion pounds ($12 billion), and should be punished due to his association with Putin. Abramovich was also linked with “destabilising,” undermining and threatening Ukraine.

Abramovich has not condemned Russia’s invasion of its neighbor in two statements since the war began two weeks ago. The British government said Abramovich has obtained financial benefits from Putin’s administration, including contracts in the buildup to Russia hosting the 2018 World Cup.

UK Culture Secretary Nadine Dorris said the priority was to “hold those who have enabled the Putin regime to account”.

“Today’s sanctions obviously have a direct impact on Chelsea and its fans,” she tweeted. “We have been working hard to ensure the club & the national game are not unnecessarily harmed by these important sanctions.”

What does this mean for Chelsea?

Chelsea, who are in Premier League action against Norwich later on Thursday, have been given a special licence to continue to operate.

But even that licence imposes some tough restrictions on a club still in the running for the Champions League and FA Cup this season and sitting third in the Premier League.

Sale on hold

The freezing of Abramovich’s assets means any sale of the club appears on hold for now.

“Chelsea Football Club is now also subject to an asset freeze under UK financial sanctions,” said the government’s Office of Financial Sanctions Implementation.

A number of interested bidders have signalled their interest, although many believed Abramovich’s reported £3 billion ($4 billion) asking price was unrealistic.

In a statement, the Chelsea Supporters’ Trust (CST) said: “The CST notes with concern the government’s statement regarding the owner. Supporters MUST be involved in any conversation regarding ongoing impacts on the club and its global fan base.”

Players can be paid

Chelsea’s licence allows the club to continue paying staff and costs for the hosting of matches at Stamford Bridge.

However, travel costs for away games have been capped at £20,000 per match, which could cause issues for away matches in the Champions League, with Chelsea set to travel to Lille in France next week.

No signings or new contracts

Chelsea can also continue to pay money they owe for transfer agreements made prior to 10 March, 2022.

However, no exception has been granted for the recruitment of new players or agreeing new contracts.

Captain Cesar Azpilicueta and key defender Antonio Rudiger, among those out of contract at the end of the season, could leave on a free transfer.

The licence, though, only runs until 31 May and could be revised by the time the transfer window reopens.

No new tickets or merchandise sales

Season-ticket holders at Stamford Bridge will be allowed to attend matches, but no ticket or merchandise sales that would mean funds going to the club are permitted.

That could mean away fans are shut out of Stamford Bridge and Chelsea supporters are blocked from travelling to away games.

TV prize money frozen

The money due to the club from highly lucrative television contracts for the Premier League and Champions League can be paid to Chelsea.

However, that cash is to be frozen, raising the question of how the club will continue to meet its payroll demands in the coming months.

Despite winning the Champions League last season, Chelsea made a £153 million loss in the year to 30 June, 2021.

That was due to a £309 million wage bill even before the club-record signing of Romelu Lukaku for £97 million in August.

Why was Abramovich trying to sell the club?

The reigning European and world champions have to operate under a special government “Russia Regulations” license that stymies Abramovich’s rapid plan to sell the club. However, Chelsea is allowed to keep playing.

The west London club was put up for sale only last week as calls for him to be sanctioned grew over his close links to Russian President Vladimir Putin’s regime.

On Wednesday (2 March),  Chelsea Football Club released a statement on behalf of their Russian owner Roman Abramovich which said he had made an “incredibly difficult” decision to  sell the English Premier League club.

The billionaire added that it is in the “best interest” of the UEFA Champions League holders if he parts ways with the club he has transformed since buying it in 2003.

“I have always taken decisions with the club’s best interest at heart,” Abramovich said in the statement.

“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.”

This comes  just days after Abramovich said he was handing over control of Chelsea to trustees of its charitable foundation to avoid any potential ramification of Russia’s invasion of Ukraine.

With agency inputs

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