CHELSEA GRIPPED BY FEAR OF GOING BUST
Club officials battling to avoid administration Hyundai joins shirt sponsors in pulling out Premier League finally ban Roman as a director
CHELSEA fear they might not be able to pay their bills despite the refining of Government sanctions intended to help them complete the season and are now worried that they could end up in administration and incur a nine-point penalty if further changes are not made.
Payday for players and staff is on April 1, with Chelsea’s monthly wage bill approximately £28million. While there are reserves to pay players next month, at present the only cash-flow Chelsea have are their broadcasting revenues from the Premier League and prize money from UEFA and the FA for progressing through their respective cup tournaments, the latter being allowed by yesterday’s clarifications.
Hyundai became the latest sponsor to suspend their marketing activities with Chelsea yesterday, while the Premier League disqualified owner Roman Abramovich as a club director as the turmoil engulfing the club continued.
Manager Thomas Tuchel is continually emphasising to the players the need to focus on what they can control, on the pitch, but there remains a degree of shock in the dressing room, with players unsure about their own future and the trajectory of the club under new owners. Lawyers have been consulted by most agents representing Chelsea players to see under what circumstances the club would be in breach of contract.
Despite some easing of Government sanctions yesterday, Chelsea still cannot sell unsold tickets for forthcoming games, which is said to be crucial for generating sufficient cash flow, with sources close to the club indicating that they will go into the red very quickly and that the club would be in grave danger unless the Government relent.
It is understood that the Government will look again at the request early next week and insist they have no desire to run the club into administration. Both parties are focused on a speedy sale, with merchant bank the Raine Group taking bids for prospective buyers. The Government will issue another amendment to the licence conditions to allow a sale and are happy to work with Raine Group and accept their preferred bidder.
Abramovich will not stand in the way of a sale, with sources close to the owner insisting that he had already accepted that he would not benefit from the sale by pledging proceeds to war victims. Under the terms of the sanctions, the Government will ultimately decide where the funds end up.
The front runners are all North American sports franchise owners:
Todd Boehly, part owner of the LA Dodgers, who has teamed up with
Swiss billionaire Hansjorg Wyss and, according to Sky, London property developer Jonathan Goldstein; the Ricketts family, owners of the Chicago Cubs; and
New York Jets owner Woody Johnson. The Daily Mail also revealed that London property developer Nick Candy is still keen to put together a consortium.
Government sanctions on Abramovich had previously allowed the club only to pay staff and imposed a limit of £500,000 on putting on a game at Stamford Bridge, an amount which is about half the necessary expenditure for a home game. That limit has now been raised to £900,000.
Contractors and temporary workers were also added to the list of staff who can be paid, which will make it easier for Chelsea to organise home games and pay expenses to academy players, parents and rent to host families with whom young players lodge.
Previously that had been unclear, leaving the club in a state of paralysis over who could legally be paid, and not knowing whether they could order taxis for casual staff or have matchday hosts in the press room. Crucially though there is no rise in the amount the club are allowed to spend on travelling to games, which remains at £20,000. That will not be an issue for Lille on Wednesday, which is prepaid, but £20,000 would not cover the cost of a plane to Middlesbrough in the FA Cup next Saturday.
While the Government appear to be flexible on travel costs for future Champions League games if Chelsea progress, there is no indication that the limit will be raised for domestic games, meaning Chelsea players will have to get used to train and coach travel for away games.
Chelsea’s corporate credit card account was suspended by Barclaycard last week, who wanted to assess whether they were in breach of sanctions by providing a service, but Chelsea are confident that will soon be restored. Chelsea’s sponsors are distancing themselves for the club but it is expected that the players will continue to wear the Three logo today, even though the telecommunications company have requested they do not, because patching over the logo has proved impractical and chemical sprays to remove it leave the shirt a mess. Nike cannot provide new sponsorfree shirts for fear of breaking the terms of the sanctions.
A spokesperson for the Department for Digital, Culture, Media and Sport said: ‘We have said all along that we would engage with Chelsea to understand what is needed to allow games to be played to minimise the impact on leagues, football pyramid and fans.
‘Following extensive engagement with the club on the details of their structures, we have made some operational amendments to the licence to do so. We are open to a sale of the club and would consider an application for a licence to allow that to happen.’