Chelsea’s shirt sponsor, the telecom brand, Three, has placed its £40 million deal with the Blues under review after the UK Government sanctioned the club’s owner, Roman Abramovich.
Abramovich will be subject to an asset freeze and travel ban, under the terms of the sanction, which was announced by Prime minister Boris Johnson, this morning.
The news has immediately thrown Chelsea’s future– including the club’s extensive sponsorship arrangements – into doubt.
Analysts are warning other sponsors will quickly follow Three and review their involvement with the club, hoping to avoid ‘guilt by association’ with a Russian oligarch accused of making financial gain from his relationship with President Vladimir Putin.
Brands worldwide have been desperate to distance themselves from Russia following Putin’s brutal invasion of Ukraine, which began two weeks ago today.
The situation in Ukraine deteriorates daily with Putin accused of war crimes after his forces have consistently bombed cities, hitting civilian targets, including a children’s hospital.
‘Three’ have been the first to blink within hours of Abramovich being sanctioned.
The company has admitted it is ‘reviewing the situation and are in discussions with Chelsea FC’, according to The Athletic.
Chelsea’s shirt sponsor, the telecom’s brand, Three, has placed deal with club ‘under review’
Other leading brands, including, Nike, which has a £55M kit deal with Chelsea, as well as car manufacturer, Hyundai, and the watchmaker, Hublot, which have deals worth over £15M combined, will also have to weigh up their next move.
‘Sanctions placed on Chelsea owner Roman Abramovich by the UK government casts a shadow over Chelsea’s many commercial agreements,’ said Conrad Wiacek, Head of Sport Analysis at GloblalData, a leading data and analytics company.
Chelsea is one of the assets that is now frozen, as a result of sanctioning Abramovich.
The Government said it will issue a special license that allows fixtures to be fulfilled, staff to be paid and existing ticket holders to attend matches.
Roman Abramovich is among oligarchs to be hit with asset freeze and travel bans under new UK sanctions
But while season ticket-holders can still attend matches, no more tickets can be sold, no transfer activity will be allowed and the club shop has been closed. And limited to a £20,000 spend on away travel.
Abramovich’s proposed £3BN sale of the club, confirmed last week, is also on hold.
The sale can only progress if Abramovich is able to prove to the UK government that he will not personally benefit from the transaction.
‘While Chelsea has a sporting licence to continue trading as a soccer club, many brands will be wary of guilt by association,’ Wiacek.
‘Chelsea FC is still one of the biggest clubs in the world and its on-field success still makes it an attractive commercial partner.
A woman injured in Russian shelling of Mariupol’s maternity hospital stands outside wrapped in a blanket amid the carnage
‘However, given the rate at which many brands are looking to dissociate themselves from the Russian state, some may be wary of continuing partnerships.
‘Nike’s deal with Chelsea runs until 2032, so the apparel brand may decide to wait the situation out until the club’s sale is able to continue.
‘However, brands such as Hyundai and Hublot, which have deals…expiring at the end of 2021/22 season, may not have that luxury.’
Abramovich has been described UK government as a ‘pro-Kremlin oligarch’. A government document published on Thursday claimed Abramovich has had a ‘close relationship for decades’ with the Russian premier.
‘This association has included obtaining a financial benefit or other material benefit from Putin and the Government of Russia,’ the Government said.
Abramovich has always denied a close relationship with Putin.
The Chelsea owner is one of seven oligarchs to be hit with fresh sanctions, The list also includes billionaires Igor Sechin and Oleg Deripaska,
Culture Secretary Nadine Dorries tweeted that Chelsea FC will be able to operate under a ‘special licence’
Prime Minister Boris Johnson said ‘there can be no safe havens’ for those who have supported the invasion.
‘Today’s sanctions are the latest step in the UK’s unwavering support for the Ukrainian people.
‘We will be ruthless in pursuing those who enable the killing of civilians, destruction of hospitals and illegal occupation of sovereign allies,’ Mr Johnson said.
Chelsea’s status as a ‘significant cultural asset’ means it has been granted a special licence to continue playing, but its owner will be deprived of any profits.
The club has been banned from selling home and away tickets, with only fans who have already bought tickets – including 28,000 season ticket holders – still allowed to attend games.
There is also the prospect that Champions League games will be played effectively behind closed doors, as those tickets are often purchased separately from season tickets.
Chelsea play Norwich away tonight and Newcastle at home on Sunday.
Ministers sought to reassure the club it would not be ‘unnecessarily harmed’.
In a tweet, Culture Secretary Nadine Dorries said holding those who have ‘enabled the Putin regime to account’ was the priority.
‘I know this brings some uncertainty, but the government will work with the league and clubs to keep football being played while ensuring sanctions hit those intended,’ she wrote.
The Foreign Office announced the new sanctions with top-trumps style images on social media
Abramovich is worth 10.4bn ($12.5bn), according to Forbes, and owns a £150m Kensington mansion, a £22m penthouse, and more than £1.2bn of yachts, private jets, helicopters and supercars based in Britain and around the world
