The British government has hit Russian oligarch Roman Abramovich with sanctions halting the sale of his most famous UK asset – Chelsea Football Club. The measures not only stop the club from being acquired by someone else, they also prevent match tickets and merchandise from being sold.
How much will this hit Chelsea FC and Roman Abramovich in the pocket? well, MyLondon has examined the details of the sanctions and the club’s finances to estimate just how big the losses will be with a quarter of the season still to be played.
It’s important to remember Chelsea has already been paid significant proportions of their revenue for this season. Media reports suggesting the Blues could lose hundreds of millions are inaccurate because many of the figures quoted include money the club already has and sanctions are not backdated.
READ MORE: ‘They fear their wealth vanishing’: London school friends of Russian oligarchs’ children reveal how they think
Ticket sales – Around £5 million
(Image: Tess Derry/PA Wire)
The sanctions allow those who purchased match tickets before Thursday to attend games. This means Chelsea’s 28,000 season ticket holders will be able to continue to go to Stamford Bridge.
However, any of the 14,000 remaining seats that are unsold will remain so. Although losing out on individual seats, the price of which starts at £47, is bad it’s the unsold hospitality packages that will really hit Chelsea in the pocket. Starting at £240 and going all the way up to £7,000 these are usually the last to sell out.
Chelsea have five remaining home games in the Premier League, the first of which, against Newcastle, is already sold out. The club has already announced it will not be selling tickets for the match against Middlesborough in a fortnight in the FA Cup, where 7,000 away fans would be normally be attending and where the club would be due a 45 per cent split of the gate receipt.
It’s difficult to estimate how much exactly the club will lose from having 14,000 fewer fans at Stamford Bridge. But considering only the next game, against Brentford, had tickets available to buy when the sanctions came in it’s looking at a significantly reduced capacity for the final three home games and any others it might have in European competition.
On average Chelsea earn around £2.2 million per game (based on the last full season with fans 2018/19 when it earned £66 million from 30 home games) they’d be looking at a loss of around £730,000 for each match.
That means a minimum of £2.1 million for the rest of the season, depending on how many tickets to the Brentford game have been sold. Should the club progress in both the Champions League and FA Cup the loss will be more than £5 million.
Prize money – Potentially £50 million
(Image: Nick Potts/PA Wire)
The sanctions freeze the prize money Chelsea receives from footballing organisations like the Premier League, Football Association and UEFA. This means cash will be accumulated, but the club cannot access it.
Prize money is derived from the broadcast and sponsorship deals football’s governing bodies have. The way this money is paid depends on the competition, for example, Premier League prize money is paid in May once the season is complete whereas UEFA pays its rewards round by round.
Last season, Chelsea earned £32 million from their fourth-place Premier League finish. The club currently lies third with nine games remaining.
They have already made £52million from this season’s UEFA Champions League. A first leg victory against Lille puts the club in a strong position to reach the quarter-finals which would have brought in an additional £8.9 million. Should Chelsea progress to the last four that would be another £10.5 million. If they make the final the missed earning would be either £12.8 million or £16 million if the team won.
Last season, Chelsea reached the final of the FA Cup losing to Leicester City. Next weekend they face Middlesborough in the quarter-finals where they would have earned £360,000 for a victory. Semi finalists are guaranteed £450,000 with teams that reach the final earning at least £1.8 million, winners make £2.7million from the two games.
If Chelsea match their achievements last season then the club will lose out on £50 million in prize money alone.
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TV money – Around £4 million
In addition to the prize money handed out by the Premier League, clubs are also paid each time their games are televised. These ‘facilities fees’ are around £1.2 million for each match . Their upcoming game against Newcastle United is due to be broadcast so that’s already over million Chelsea are missing out on.
Looking further ahead there are six of the remaining fixtures that could be potentially be chosen by broadcasters and it’s likely that at least two, against Manchester United and West Ham United, would be. So Chelsea are looking at losing at least £3.6 million.
Chelsea’s match against Middlesborough in the FA Cup has also been chosen by BBC to air so the club will be losing out on around £250,000. The next two games will definitely be televised, meaning they would lose out on close to a million if they continue to progress.
So on a game-by-game basis, Chelsea could be looking at being at least £4 million worse off.
Merchandise – close to £4 million
Chelsea’s West London megastore and online merchandise outlets have both been closed since government sanctions came into place. Third parties who’d acquired stock from the club are still able to sell it, however.
It’s hard to estimate an exact figure for how much the club stands to lose from its retail operation being shut down. Sales of replica shirts, which are by far in a way the most substantial part of any club’s merchandise earnings, peak when new jerseys are released, ahead of the upcoming season, and at Christmas time. If the club wins a trophy there is normally another uplift in sales, but otherwise, the period of the season Chelsea has remaining sees stock gradually reduced in price.
Chelsea’s overall accounts do not include a breakdown of commercial revenue, but the accounts of its subsidiary company, Chelsea Merchandising Sales , show it made £15 million in 2021, albeit with physical sales affected by Covid-19. With a third of the company’s financial year remaining, assuming the club is on course for a similar performance to last year. They will miss out on close to £4 million.
As part of their sponsorship arrangement with Nike, the American sportswear giant also has the rights to sell Chelsea products under a licensing deal. It is unclear quite how this arrangement has been affected by the sanctions.
Food and drink – Depends on the deal
Supporters attending matches will be able to buy food and drink from the concession stands in the stadium under the current rules. Chelsea, like most football clubs, outsource their catering operation to a third party, Levy UK + Ireland, with which they signed a three-year contract extension last year.
Details of what this is worth or how the contract functions have not been made publicly available. But the typical set-up is for a catering provider to pay a yearly fee to the club at a flat rate and then take total responsibility, and revenue, for the food and drink sold game by game. The prospect of there being fewer supporters in the stadium will surely affect Levy’s ability to recoup any outlay it may have made and impact how many of the 1,300 staff who regularly work for the club on matchdays are retained.
A spokesperson for Levy UK said: “We have been shocked and saddened by the tragic events in Ukraine. In light of the sanctions announcement, we are in contact with the UK Government and Chelsea FC to understand how fixtures will run moving forward.
“We will ensure all the cleaning and catering services we provide operate fully within the boundaries of the Government’s general licence which permits the continuation of essential services at the club.”
Sponsorships – A £40 million hit so far
(Image: Facundo Arrizabalaga/MyLondon)
The first major commercial partner to pull the plug on Chelsea were their shirt sponsor, the mobile network, Three who temporarily suspended its deal with the club following the announcement of the government’s sanctions. Understood to be in the region of £40 million per season it was a substantial blow.
At the moment the key word is “temporary” because if the club is sold there’s every chance Three will seek to continue the relationship.
It’s since been reported that Nike is considering its £900 million 15-year arrangement with the club, which would leave them £540 million poorer for the rest of the contract. This is in addition to speculation Hyundai, Parimatch and Zapp considering ending their agreements;
Chelsea’s total commercial revenue for 2021 was £153 million. The deals with Nike and Three alone account for two-thirds of that figure and a quarter of the club’s overall £434 million revenue.
Total: £103 million
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