Mobile phone firm Three has cancelled its £40 million shirt sponsorship contract with Chelsea FC after Roman Abramovich was hit with crushing restrictions that included a ban on the ticket and retail sales.
The club is no longer allowed to sell home or away tickets, and only fans who have previously purchased tickets are permitted to attend games. Because Champions League tickets are often acquired separately from season tickets, it’s possible that games will be played essentially behind closed doors.
Suspension with Chelsea
The sanctions are intended to last as long as Abramovich controls the club before being lifted if he sells it. They are part of a larger government package issued against six other oligarchs.
Three UK’s decision to discontinue its sponsorship relationship with Chelsea might spark a wave of business boycotts, depriving Chelsea of tens of millions of pounds in revenue and putting the club on the verge of bankruptcy. Hyundai stated today that it is ‘currently examining’ its contract with the West London side and that its cooperation with the supermarket delivery firm is ‘under review.’
About other Sponsors
Analysts believe that other sponsors will follow Three to avoid ‘guilt by association’ with Abramovich, who officials claim owes at least part of his £9.4 billion fortune to his acquaintance with Vladimir Putin.
During the coronavirus outbreak, Chelsea made £154 million in commercial deals last year. Before Covid’s arrival, the club had received £200 million in sponsorship. Three’s announcement comes only hours after the business announced support packages for Ukrainian immigrants landing in the UK, including free 30-day pre-paid pay-as-you-go sim cards.
A spokesman for the firm said: “In light of the government’s recently announced sanctions, we have requested Chelsea Football Club temporarily suspend our sponsorship of the club, including the removal of our brand from shirts and around the stadium until further notice.”
Bare Minimum to Run the Club
Chelsea was in immediate discussions with the government to try to change the terms of its license, which allows the club to perform the ‘basic minimum’ to stay afloat. After it was revealed that the average budget is significantly greater, one of the parameters expected to be changed is a £20,000 maximum spend on overseas travel.
Due to the necessity for secrecy, the Treasury fixed the figure without consulting the club, and ‘didn’t know how much it costs to run an away game.’ The crew is expected to fly from London to Norwich this weekend, with the journey expected to cost ‘tens of thousands of pounds.’
Although Sky Sports cited accusations by a Chelsea player’s representative that the club had already paid for this year’s travel in advance, the £20,000 cap poses severe logistical issues for the team’s Champions League game in Lille next Wednesday.
Executives are also claimed to be concerned about the £500,000 maximum budget for hosting home games, which includes expenses like stewarding, security, and catering supplies.
Discussion with the Government
Chelsea has stated its desire to hold talks with the UK government about the license’s scope. Based on a £47 minimum ticket cost for the 12,834 seats at Stamford Bridge that are not currently occupied by season ticket holders, the ticket ban will cost the club more than £600,000 every game.
Abramovich has been barred from doing business in the UK, putting his plan to sell Chelsea on hold. His tainted billions catapulted Chelsea from mid-table mediocrity to five Premier League titles.
Ministers are said to be clear that whether Ambramovich sells or not is ultimately up to him, but whatever assets he does sell will be blocked. However, an insider confessed that the football club’s current situation is untenable.
They said: “The quicker the sale the better.” There are no plans for the taxpayer to acquire full ownership of Chelsea, according to a senior government source. Chelsea can continue to play because it is a ‘significant cultural asset,’ but Abramovich will lose any revenues.
Chelsea will be unable to agree on any new contracts, barring the club from making any summer signings. They will continue to be paid for TV appearances and prize money, but their pay will be frozen. Staff and athletes who are already employed can continue to be compensated.
In his 19 years as Chelsea owner, Abramovich has revolutionized the face of British football, leading the Blues to 21 trophies and a clean sweep of all global championships. But, thanks to Vladimir Putin and Russia’s war in Ukraine, that age has come to an end.
Although Chelsea’s long-term survival has been cast into doubt, Government leaders have been quick to reassure that any damage will be minimal.