Roman Abramovich watches from the sidelines: The empire he built is on the way to collapse
The empire created by the Russian oligarch is on the way to total chaos. New regulations in England prohibiting owners from injecting money freely, a blocked accounting trick, and a visceral conflict between billionaires are freezing an investment worth 5 billion pounds.
Just four years after Roman Abramovich was forced to sell Chelsea for 2.5 billion pounds following British sanctions, the former owner can only stand by and watch as the empire he built sinks into total chaos.
The club, which was identified with unlimited financial backing, an excellent youth academy, and a competitive senior team, has now fallen into a deadly trap that combines new rules, heavy financial turmoil, and a visceral power struggle.
The rules of the game have changed: the owner can no longer pay. The root of the crisis lies in the Premier League's new "Squad Cost Rules". According to the regulations, a team is not allowed to spend more than 85% of its own revenues on the squad (salaries, agent commissions, and acquisition costs), and the threshold drops to only 70% for teams in Europe.
This simple rule ended the "open check" era: the owner can no longer cover losses from his private pocket, and the club must generate revenues itself in order to buy stars.
The accounting trick that was blocked
To bypass the law, the American ownership group - led by Todd Boehly and Behdad Eghbali's Clearlake Capital fund - has spent an astronomical sum of 1.2 billion pounds on players since 2022, including Enzo Fernandez (106.8 million pounds) and Moises Caicedo (115 million pounds).
In order not to exceed the spending threshold, they signed them to unprecedented 8 and 9-year contracts, with the goal of spreading the cost in the books into small portions. However, FIFA and the Premier League were quick to close the loophole and limited the spreading to only 5 years - which put Chelsea into immediate financial turmoil.
Sacrificing symbols for the sake of the reports
To avoid heavy penalties, the club turned to a cynical step: selling home-grown players. Since the registration cost in the books of a young player from the academy is zero, his sale is recorded in the reports as 100% net profit.
Thus, the captain and fan favorite Conor Gallagher was sacrificed and sold to Atletico Madrid for 40 million pounds, alongside the sale of players like Mason Mount and Lewis Hall, just to cover the acquisition costs of expensive foreigners.
The war of the billionaires and an investment of 5 billion pounds
If all this is not enough: while coach Xabi Alonso is trying to stabilize the team on the grass, a world war is taking place in the boardroom. The rift between the Clearlake fund (which holds 62% of the shares) and Boehly and his partner Mark Walter (13% each) is paralyzing the club.
Although Clearlake has a majority, Boehly retains a strategic veto right, and the talks between the parties to buy the shares are stuck due to financial gaps and financial audits of the involved parties.
The most destructive result is the freezing of the plans for a new stadium - the most critical economic engine for increasing revenues under the new law. The project to build a modern stadium in Earl's Court, at an estimated cost of 5 billion pounds, is completely stuck. No billionaire is willing to sign such a huge check as long as his rival partner has a veto right, and the empire that Abramovich built continues to fall apart from within.
