Part II — choreography
The tensions along the axis London-Moscow are not new to us. Various conflicts through the years have intensified the relationship between the UK and Russia but somehow irreparable damage was avoided. Until recently.
In 2018, Roman Abramovich’s UK investor visa has expired and the chances of reissuing a new one were slim and due to the Salisbury poisoning. Since then, the UK has made it harder for Russian oligarchs to obtain visas and later that year Roman Abramovich withdrew his application. In 2021, Roman Abramovich obtained Israeli passport which allowed him to return to the UK for a first time in three years.
At the time of the issues with the visa, Chelsea FC were embarking on a project that would’ve seen their historic ground Stamford Bridge being reconstructed in a project worth over £1 billion. To spare you the waffling Roman Abramovich pulled the plug on the project once he couldn’t obtain a visa.
It is fair to say that Chelsea FC in the Abramovich era always went against the notion of sustainability in football. Crazy transfers fees, constant managerial changes, huge player wages but more importantly Chelsea FC was always competitive on the football pitch. But those crazy investments were somewhat “normalised” few years ago.
The graph shows us that the initial investment into the playing squad as followed gradually by smaller investments when the team needed replenishment. The final period from 2019/20 onwards represents the smallest investment into the team, but we shouldn’t forget that during this period a two-window transfer embargo was imposed on Chelsea FC for multiple breaches of FIFA rules regarding signing youth players.
So, in the space of six months Chelsea’s owner ability to enter the country was denied and the club was found guilty of breaching over 150 rules by the FIFA Disciplinary Committee. To say at that point Chelsea was in turmoil would be an overstatement, but the club’s position as a powerhouse in European football was at least challenged for the time being.
Now let’s take a closer look at the last financial reports. Fordstam Limited is the parent company in which Roman Abramovich has 100% stake that owns Chelsea Football Club. Every year the company’s directors have to produce an annual financial statement. In those reports there are paragraphs acknowledging the funding of the company.
The statements suggest that throughout the majority of Roman Abramovich’s tenure at Chelsea the club was operating on a loss. Sometimes even in the hundreds of millions, Chelsea FC was always relying on the commitment of Abramovich to cover the losses, according to the statements.
In the previous article I hinted out the idea that Abramovich knew that a day like this may come, and he was prepared. It turns out he was preparing/protecting long time before we ever think about a problem with his ownership.
The structuring of multiple companies under a big one “umbrella” with the controlling power is a method used in many other businesses. Unfortunately, when we decry the usage of umbrella companies to protect oneself, we forget that Russian oligarchs are not the only ones using those methods and they aren’t reinventing the wheel.
Appletiser, Sprite, Costa Coffee and Schweppes are all under the umbrella of Coca-Cola. While we sit in disgust about the CO2 emission scandal with Volkswagen, we still buy Audi, Bentley, Porsche, Skoda, and SEAT, all owned by Volkswagen.
But okay, some of you may say I’m globalising too much and going away from the issue in hand, so let me go back to Russian oligarchs in British football as a reference point.
Alisher Usmanov is yet another oligarch sanctioned by the UK government for his alleged close ties with Vladimir Putin. With similar background to Roman Abramovich, Usmanov made his fortune in the early years after the collapse of the Soviet Union and the privatization that followed.
Alisher Usmanov and his business associate Fahrad Moshiri bought into Arsenal in 2007 and Usmanov was on the board of directors of Arsenal until he sold his shares to Stan Kroenke in 2018. Usmanov sold his shares two months after Abramovich withdrew his UK visa application.
Instead of relinquishing his interest in sports, Alisher Usmanov partnered with his associate Farhad Moshiri who owns Everton since 2016. Usmanov and his company USM Holdings agreed to a partnership deal with Everton FC back in 2017 and plans for naming rights were in the works with USM paying £30 million in 2020 to secure naming right at Everton’s new stadium.
On the day that Alisher Usmanov was sanctioned, Farhad Moshiri did everything to distance himself from the oligarch with which Moshiri had close partnership for years prior. Even more telling about the intention of all parties here is the fact that Moshiri was distancing himself after the sanctions, not prior.
Everton FC did cut ties with its Russian sponsor including USM Holdings, MegaFon and Yota all linked to Alisher Usmanov. For more information on the long connection between Farhad Moshiri and Alisher Usmanov a great article can be found in the Guardian. On top of that I will leave here a graphic from the BBC in relation to the Paradise Papers investigation into the ownership of Arsenal and Everton.
In conclusion, I need to get back to football, I guess. Unfortunately, nowadays football is so intertwined with money that it becomes almost impossible to talk about the one without the other.
Money in football has always been a rather ambiguous topic. Football needs money and ultimately its proven that money need football also.
The problem comes from the social justice warriors that appear on television on an hourly-basis condemning everything. Accountability is great. Selective accountability isn’t.
Roman Abramovich has been owning Chelsea Football Club the same way since 2003, on a year-to-year basis. There isn’t a long-term gain or strategy here. Never was. But we didn’t hold him accountable for it. The football police didn’t seem to be interested where all this money is coming from. The accountability wasn’t priority way back when Chelsea won the Premier League out of nowhere. The accountability certainly wasn’t there when Chelsea won the Champions League last year. But now is the time?
I find it hard to agree with the people that are leading the public trials, because they are the same people that closed their eyes for 19 years. The same people that were praising Abramovich now are placed on the moral high ground.
It reminds me of a film production that includes only high-quality effects — it’s intriguing for a bit, but after a while you realise you’ve seen it all before. But if you paid enough attention when the credits appear don’t forget to applaud the choreographers.
Next week we will take a trip to the Middle East to examine the love-hate relationship between the Gulf states and Russia. Why those two very different countries have so much in common when it comes to business, influence, and ways to hide the tracks. Part III coming soon.
