Premier League

Post-Abramovich: What Does Chelsea’s Future Look Like?

The recent decision by Chelsea owner Roman Abramovich to put the club’s stadium redevelopment on hold has raised many questions, not least speculation about the Russian oligarch’s long-term commitment to the United Kingdom, London and the club itself. Could the man who effectively kick-started the wave of inflated investment in football be about to call it a day?

Naturally, with the issues over his visa, there is some legitimacy in his reluctance to spend heavily in a country that doesn’t appear to welcome him. Abramovich is clearly wrapped up in the emerging Cold War, due to his links with Vladimir Putin, and he may not be the only wealthy Russian that finds himself frozen out of the UK.

From the recent poisoning episode in Salisbury to talk of an “Oligarch tax” from pretenders to the UK seat of power, the relationship between Russia and Britain has developed into something a little uncomfortable. We’re not heading for nuclear bunkers, but there has been a sense of hostility that shows no sign of easing up. In these circumstances, who would really spend £1 billion on a football stadium?

Since the announcement, football fans of other clubs have been posting pictures of non-league grounds on social media and predicting that Chelsea’s future without Abramovich will be more Boreham Wood than Barcelona. It may be a bit of fun, but they are missing the point.

Abramovich may sell Chelsea, but there will be no shortage of buyers. Chelsea are arguably worth £ 1.5 billion by current market standards, although it is unlikely that anyone will pay that much for the club. If you examine what Chelsea has to offer – prime real estate, profile, success and exposure at football’s top table – then the club looks like an attractive asset for a would-be investor.

History

Firstly, though, should Chelsea be concerned about Abramovich going? Let’s roll-back to the years before he arrived in London SW6. Chelsea’s revival began in 1984, largely due to Ken Bates, never a popular figure, but any Chelsea fan who remembers the dark period between 1975 and 1983 will be grateful to Bates for rescuing the club from disaster.

The real upgrade came in the mid-1990s when Chelsea started buying foreign. Between 1996-97 and 2002-03, they finished in the top six every season and won the FA Cup twice (1997 and 2000), Football League Cup (1998) and European Cup-Winners’ Cup (1998). This spell was not only the most consistent in the club’s history, something that was overlooked by many, but was also comparable to the period (1963-1971) that was considered by a golden age. So, Chelsea were as successful as they’d ever been before Abramovich bought the club from Ken Bates. But it came at a cost, which is why Bates decided to unload Chelsea to a willing buyer. The club was virtually broke.

Abramovich’s spending took Chelsea to a new, unprecedented level. In that first season, 2003-04, Chelsea spent £ 121 million on players, in 2004-05, another £ 94 million was lavished on new signings, including Didier Drogba. With the arrival of Jose Mourinho, Chelsea started winning things and competing in the UEFA Champions League. Two Premier titles in 2005 and 2006 gave the club something it had never really had, but this regime of high stakes also had high expectations and failure was not something to be contemplated. This is what happens when clubs become the indulgence of extremely rich and successful people, they do not know how to deal with failure.

Hence, managers have come and gone with alarming regularity. Mourinho fell-out with Abramovich in 2007 and was soon on his way out of Stamford Bridge, the details of which have never been revealed. The club has managed to perfect the art of the non-disclosure agreement, you never hear the inside story. Abramovich has been through some of the top managerial names in world football – Mourinho, Scolari, Ancelotti and now Antonio Conte, who may be the next casualty. He’s also been able to hire short-termers like Hiddink and Benitez.

The pattern repeats itself, but if there’s one thing certain about a coach’s life at Chelsea – it’s a two-year deal before the door begins to creak open. It is not easy to warm to the club because of this cycle, but some would argue that it works, Chelsea under Abramovich have won 15 major prizes, as opposed to the eight won by the club between 1905 and 2004. The creative tension, not unlike the type of behaviour seen in major financial institutions, enables the club to get the best out of a manager in an intensive, short period.

Financial upgrade

As well as 15 trophies, Chelsea have become a more professional, corporate club and one of the top 10 global names. Under Abramovich, Chelsea’s revenues have increased from € 217 million in the 2003-04 season to € 428 in 2016-17. Most telling, especially in light of the decision to mothball the Stamford Bridge project, matchday revenues have not kept pace with all other revenue streams – in 2004-0, Chelsea generated € 84 million on matchdays, but in 2016-17 this figure was just € 76 million. Consider that broadcasting has risen from € 82 million in 2004 to € 189 million in 2016-17 and commercial income has gone up from € 55 million to € 162 million in this timeframe and the limitations of Stamford Bridge are obvious. Chelsea’s overall revenues might have increased by 97% under Abramovich, but in that period, their domestic peers have a far greater trajectory – Arsenal +179%, Manchester United +161% and Liverpool +202%.

In 2003-04, Chelsea’s home attendances averaged 41,282 – in 2017-18, they were actually lower at 41,235. This is a problem that Arsenal had before they moved to the Emirates and Tottenham have remedied by building a new White Hart Lane. Chelsea’s crowds, while at capacity, are now looking inadequate for a club with huge ambitions. The reason they embarked on a new stadium project was because of that very reason and without a new ground, the club will struggle to grow, especially as the financial landscape has changed in world football and Chelsea are not the only rich-kid in town.

What are their options? If the halt on the project is temporary, then it will merely be an inconvenient delay. If it is, effectively, abandoned, then Chelsea could redevelop the ground on a piece-meal basis or sell the site, if that is possible. The latter may be the best option, but one assumes the reason Abramovich opted to knock-down the Bridge and start again was because a suitable site that would be acceptable to all could not be found. A new stadium would be the perfect monument to the Russian era at Chelsea, a lasting more fitting legacy than a stream of bank-breaking transfers.

Who takes over?

Abramovich is not as wealthy as he once was. In 2008, his net worth was estimated to be $ 23 billion, but more recent figures put his value at under $ 12 billion. He has a 7.3% stake in Norilsk Nickel and 31% in steel company Euraz. He is reputedly the 11th richest Russian and the 140th richest person worldwide. He is still an incredibly rich man.

Has he been a good owner of Chelsea? On the face of it, absolutely. Regardless of whether you agree with the model, the revolving door on the dugout and the ethics of inflated football investment, nobody can deny that Abramovich has been a good owner for the club. Some might question the source of his wealth, others may point to the lack of transparency, but he has been successful and has given Chelsea a status they could only have dreamed about 20, 30, 40 years ago. In truth, this sort of relationship can never be sustained forever.

What Chelsea fans should be concerned about is who takes over if Abramovich decides that the visa hurdles are an insult and London is no longer simpatico. Chelsea’s model is very different to the one adopted by US owners, who expect a return and actually take money from clubs as part of an investment portfolio. He has also been respectful to the club’s heritage, which is something often overlooked by foreign owners. If his regime has been an extension of his ego, a place where he can wine and dine with his friends and associates and point to a bulging trophy cabinet, then so be it.

Nobody really knows what’s on Abramovich’s mind – after all, very few people have ever heard him even speak and he keeps a very low profile. But nobody can expect the man to continue investing in Chelsea Football Club forever. If the current situation is not the catalyst for change, the day will surely come when he decides to walk away. But rest assured, there will be takers for one of Europe’s top football institutions in a structure that was partly of their making, the world of corporate football, big money and impatient owners. Abramovich’s departure is unlikely to trigger a Lehman-style meltdown for Chelsea.

 

This article was originally published as “If Abramovich goes” by gameofthepeople.com.

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