Following Russia’s invasion of Ukraine in February 2022, the UK government has opted to place sanctions on a range of Russian businesses, financial institutions, and individuals. Details of these sanctions, and how the government has implemented them, are set out in our explainer here. 

This explainer focuses on the impact of these sanctions for UK football teams—a topic that has been hotly debated, given the links that multiple major teams have to Russia.  

What sanctions have been implemented that affect football clubs in the UK? 

On March 10, the government announced that it was sanctioning seven oligarchs including the businessman Roman Abramovich—the owner of Chelsea Football Club—who allegedly has ties to Vladimir Putin and the Russian state. The sanctions against Abramovich ban him from travelling to the UK; from doing business with any companies or individuals in the UK; and freeze all of his assets—including Chelsea FC.  

However, the UK government has opted to grant Chelsea a special licence allowing the club and all its teams (including the men’s and women’s, youth, and development teams which are all covered by Abramovich’s ownership of the club) to continue playing football. The government’s rationale for this is that the club is a “cultural asset”, and ministers wish to “protect the sport”. Chelsea’s teams will therefore continue competing as scheduled, but many other aspects of the club’s activities will be prevented or severely limited.   

Abramovich bought Chelsea in 2003 for a reported £140m—the cost of both the club and debts that it held at the time. During his ownership, the club has become renowned for its high spending on players and facilities, and both the men’s and women’s teams have achieved domestic and international success. His ownership of the club has previously attracted controversy—which dramatically increased following Russia’s invasion of Ukraine.  

Why has the UK government sanctioned Roman Abramovich? 

Since Russia’s invasion of Ukraine, some politicians called on Abramovich to face sanctions, citing his alleged links to Putin and the Russian state. For example, the Labour MP Chris Bryant used parliamentary privilege on 24 February 2022 to read out a leaked 2019 Home Office document that deemed Abramovich “of interest to HMG [Her Majesty’s Government] due to his links to the Russian state and his public association with corrupt activity and practices.” 

In setting out the sanctions against Abramovich, the UK government alleges that he “is a pro-Kremlin oligarch” who is “associated with a person who is or has been involved in destabilising Ukraine and undermining and threatening the territorial integrity, sovereignty and independence of Ukraine, namely Vladimir Putin, with whom Abramovich has had a close relationship for decades.” Abramovich has previously denied links to the Russian regime. Announcing the sanctions, the culture secretary Nadine Dorries tweeted: “Our priority is to hold those who have enabled the Putin regime to account. Today’s sanctions obviously have a direct impact on Chlesea & its fans. We have been working hard to ensure the club & the national game are not unnecessarily harmed by these important sanctions.” 

What do the sanctions against Roman Abramovich mean for Chelsea FC? 

The UK government has issued a special licence allowing Chelsea FC’s teams to keep playing—though with conditions on its activities. The practical consequences of this include: 

Fixtures 

Chelsea FC teams will be allowed to continue competing and will play their fixtures as scheduled. On the evening after sanctions against Abramovich were announced, the Chelsea men’s and women’s team both played scheduled matches. 

The licence granted to Chelsea allows the club to pay “reasonable costs of travel to and from fixtures” (as well as training) for players and staff, up to £20,000 per game per team. As sports journalists have pointed out, this could potentially require changes to teams’ travel arrangements—especially for overseas fixtures—to ensure they do not exceed that threshold.  

Tickets 

Chelsea will not be allowed to sell any new tickets to its fixtures, meaning that only season ticketholders or fans who bought tickets for forthcoming matches before sanctions were imposed, will be allowed to attend. Away fans will not be able to attend Chelsea’s home games, unless they bought tickets to them prior to sanctions.   

For matches at Chelsea’s home grounds, the club will still be allowed to pay for stewards, security, and catering—though spending on this is capped at £500,000 per match per team.  

Player and staff pay 

Chelsea will be allowed to continue paying and making pension provision for all club employees, including players, coaches, and staff.  

Fees, allowances, and dividends to the club’s directors (excluding Abramovich) may still be paid, as long as those obligations existed before sanctions were imposed.  

Player transfers 

Chelsea will still be able to pay and be paid by other football clubs for any player sales or transfers—as long as these obligations existed before sanctions—but any money received by Chelsea through this will be frozen.  

This effectively means that the club cannot arrange any new sales or transfers of players. It also cannot offer existing players new contracts.  

Merchandise and broadcasting 

Chelsea matches can still be broadcast as scheduled. Money from broadcasting rights can still be paid to Chelsea, though the money received from this will be frozen. This is also the case for any performance fees due—for example from sporting bodies.  

The club will not be able to sell merchandise—such as shirts—through its online or physical club shops. (Separately, following the imposition of sanctions, two of the sponsors on Chelsea’s shirts have suspended their deals with the club).  

Maintenance costs 

Chelsea will be allowed to pay reasonable costs that are directly related to the maintenance of the club and its facilities—such as insurance, facilities maintenance and inspection costs, and council tax and/or any other rates. It will not be allowed to undertake any new refurbishment or building works.   

Finance 

Any funds that the club now receives as a result of pre-sanction obligations (for example, from broadcasting contracts, or outstanding fees from transfers) will be frozen.  

This means that the club is effectively now operating on whatever cash they had available when sanctions were imposed—raising a question about whether the club could potentially run out of money. 

Can Abramovich sell Chelsea FC? 

Following the Russian invasion of Ukraine, as discussion over potential sanctions intensified, Abramovich announced that he would hand over “stewardship and care” of the club to trustees of its charitable foundation—though it was unclear what this practically meant. Subsequently, he announced his plans to sell the club and donate the proceeds of the sale to “all victims of the war in Ukraine”.  

However, sanctions mean that this is now more complicated. Under the terms of the current licence, it is not clear that the club could be sold—and the government has indicated that a further licence would be required. This potentially could include conditions on any sale—for example, ensuring that Abramovich would not profit personally.  

The level of uncertainty around the club and its future may scare away possible buyers—and push down the amount they are willing to pay. 

Are other football clubs likely to be affected by sanctions? 

At the moment, not directly.  

However, outside of formal sanctions, some other clubs in the UK have recently opted to suspend or change deals with Russian-linked businesses or individuals. For example, Everton have ended sponsorship deals with Russian companies linked to the businessman Alisher Usmanov (who was subsequently also sanctioned by the UK government). Manchester United also ended a deal with Aeroflot, the Russian national airline.  

Beyond this, the Football Associations of England, Wales, Scotland, and Ireland have announced that they will not play any international matches against Russia for the foreseeable future. And governing bodies in England and Scotland have suspended broadcasts of English and Scottish matches in Russia.  

Update date: 
Friday, March 11, 2022

Original source – The Institute for Government

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