In an announcement on Thursday, Downing Street confirmed that Abramovich was one of seven new known associates of Vladimir Putin who will now face financial restrictions in response to Russia’s invasion of Ukraine.
As result of these fresh sanctions, Chelsea will no longer be permitted to sell match tickets or merchandise, and have been placed under an effective transfer embargo which also looks set to inhibit their ability to extend and renew contracts.
Perhaps, the most notable effect, however, will be the barrier the restrictions could present with regards to Abramovich’s planned sale of the club.
But according to Stephen Taylor Heath, Head of Sports Law at JMW Solicitors, the possibility of a deal being completed is not ruled out entirely - although any potential agreement would come with a couple of considerable caveats.
Here’s what Heath had to say on the potential impact Thursday’s sanctions could have on Chelsea, and in particular any possible sale of the club...
On the UK Government’s sanctions on Roman Abramovich and the potential impact on Chelsea
“The licence conditions attached to the sanctions of Mr Abramovich have clearly been thought out to enable the club to at least fulfil its fixtures to the end of the season.
“The licence allows the club to continue to pay the club employees so the executive, coaching staff and players will carry on for now. Some owners are fairly hands on but in practice these sanctions should not affect the day-to-day operations until the end of the season.
“In essence though, the club is unable to enter into new contracts other than reasonable costs of fulfilling fixtures which would preclude new sponsorship deals and even sales of tickets/hospitality other than those already in place.
“As Nadine Dorries has explained the sanctions are intended to curtail any activity that could directly or indirectly financially benefit Abramovich whilst allowing the club to fulfil its fixtures. Clearly the licence would not cover Chelsea’s ability to do business in the transfer market or award new contracts so an updated terms of the licence may be considered prior to the end of the season.
“Again, the Government seem to have thought about that given the current end date of May 31 for the current sanctions which is regarded as the end of the season in most football related contracts.”
On the possible sale of Chelsea
“In terms of a sale Abramovich owns 100% of the company that is at the top of the group structure, but he is a separate legal entity to the club. In a normal sale there are at least three relevant parties being the seller, buyer and club. There may sometimes be others for example if the ground is owned separately.
“With Chelsea the other relevant party is the Premier League. The Premier League will have to approve the new owners under the Owners and Directors Test, the adequacy and source of funding and their future financial forecast. The Premier League would normally liaise with the buyers and the club.
“I understand it may be possible for Abramovich to request special dispensation to sell the club perhaps on public interest grounds.
“It may also be possible, with Government involvement, for the club to be sold without Abramovich involvement. That would be similar to a sale of a club in administration where the administrator deals with the buyer and the club liaises with the governing body. If this were to happen though, the ‘administrator’ would need to have sufficient legal authority to sell the club.
“The administrator’s ability to do so is normally part of the administration process but they may need to be granted this authority by the Government. This may be subject to legal challenge.
“Also the Government would wish to be in the loop to ensure no proceeds of sale find their way to Mr Abramovich. This sale may be eased by the fact Mr Abramovich had already said he was not looking to profit from the sale and wished the monies to go to philanthropic purposes connected with the war. This may reduce the possibility of a legal intervention in any possible sale on behalf of Mr Abramovich.
“A further quirk is that normally the seller chooses the buyer and would usually do so based on the most attractive bid. Here if a sale proceeds, the question would be who is chosen and on what criteria?
“A further possibility is the club is not sold and then if sanctions are lifted Mr Abramovich may resume control of the club and decide not to sell after all. The difference is though that as matters currently stand he has no control over that.”