How sanctions on Russian Oligarch Roman Abramovich will affect Chelsea football club
Irwin Kishner, co-chair of Herrick's Sports Law Group, spoke to Yahoo! Finance about UK sanctions relating to the Russia-Ukraine war and their impacts on the Chelsea Football Club. Chelsea is owned by Russian oligarch Roman Abramovich, whose assets in the UK have been frozen, which largely prevents the football club from conducting various forms of business including selling tickets to its soccer matches, running its team store, or adding players. Additionally, sponsors have reportedly tacked on their own version of sanctions by pulling sponsorships.
Kishner explained, "Franchises derive most of their revenues from media, sponsorships, tickets and concessions... And pretty much all of those will be affected as the sanctions take hold."
In an official release, the UK acknowledged the public nature of Abramovich’s assets, estimated to be $13.7 billion, and "declared an intention to protect the overall Chelsea brand and its constituents."
The article stated that Kishner explained that "the UK could still oversee a sale of the club and cut Abramovich out of the proceeds" and, in that case, that Kishner "doesn't believe the current sanctions would impact the club’s value."
Kishner reflected, "While I think it’s material on the immediate effect on the franchise, I don’t think it’s going to be materially detrimental to the overall value a club like this could seize on the open market and the competitive bidding process."
The article stated that Kishner said that, because the UK government wants to keep Chelsea playing, "the club’s sale could be expedited to ensure the least detrimental impact on the club’s brand and value. Defending champion Chelsea’s role in the Premier League and the overall place of sports in the country’s culture could provide the nation a compelling interest to oversee the sale before the ongoing sanctions stranglehold the club’s ability to compete on the field."
If this were to happen, the money could be held in a frozen fund while Chelsea continues to play.
Kishner concluded, "That’s the way I thought they would have driven these sanctions," adding, "And ultimately, I think that’s where this thing may be going in any event."