Arising from the intersection of government and sport, the Premier League took the rare action to disqualify the owner of Chelsea Football Club, Roman Abramovich. The Premier League Board’s decision follows the U.K. government’s sanctions on Russian business interests in the U.K. amid Russia’s invasion of Ukraine. Abramovich’s alleged ties to Russian President Vladimir Putin are the basis for the government sanctions which involved a total of seven Russian oligarchs.
Although Chelsea FC’s assets were frozen and commercial partners suspended their relationships with the club as a result of the sanctions, the club was issued a special license to operate in order to continue fulfilling fixtures and paying staff and players but will have to rely on cash reserves to function as the club’s revenue streams have been halted as part of the U.K. government’s sanctions. The special license limits Chelsea FC’s spending which will include a cap on travel to away matches and staging of home matches.
Abramovich has signaled that he will put the club up for sale due to the imposition of the sanctions and a number of bids have already been tabled. The sale process should not be impacted by the Premier League’s disqualification of Abramovich as director as he is expected to apply for a special license from the U.K. government to complete that process which will require further involvement of the government. Furthermore, any sale of Chelsea FC will require the final approval by the U.K.’s Department of Culture, Media and Sport with Abramovich unable to receive any profits from the sale because of the sanctions.
These developments out of London are a clear reminder that sports organizations and clubs are legal entities that operate subject to the purview and reach of government regulation.
