Master of the Field
Roman Abramovich has never been able to explain why he wanted the Chelsea Football Club. Since we are talking about a serious businessman, an explanation such as “I really like football” cannot be considered. Mr. Abramovich would say only that he had been thinking about the possibility of this kind of acquisition for more than a year, while looking closely at various options.
History of the Purchase
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| Photo: AP |
| Governor of Chukotka Roman Abramovich regularly appears at his team’s games and invariably joins in the applause of the spectators |
While Mr. Abramovich was considering his options, his agents were scouting for suitable teams in Spain, Italy, and England. In the first case, it turned out that Spanish teams were simply not for sale, because they are not commercial enterprises but rather clubs that actually belong to their fans. The Italian option fell through because Mr. Abramovich did not like the playing style of Italian teams. The English option turned out to be the best one. English clubs without exception are corporations and they play a more entertaining game. What is more, there was even a pretty good option in London’s Chelsea club. Founded in 1855, it is one of England’s oldest football clubs, whose fans have traditionally included a large part of the country’s political elite. One of the club’s present-day fans is British Prime Minister Tony Blair. In number of fans, Chelsea is behind only England’s greatest teams, Manchester United, Liverpool, and Arsenal. However, Chelsea has some of the world’s wildest, most uninhibited fans.
Until last year, Chelsea was regarded as one of the most financially successful Premier League clubs. As it turned out, however, former owner Ken Bates had simply passed off wishful thinking as reality. He had managed to do quite a lot in the 21 years that he had owned the club (he bought it in 1982 for £1). The team somehow got itself out of debt, recruited decent players (players from teams in France, Holland, Denmark, Nigeria, and England played for Chelsea last year), and placed fourth in the national championships last year, earning it the right to play in the Champions League. Everything would have been fine, except that reconstruction of the Stamford Bridge Stadium, which after Wembley Stadium was demolished, became the largest in London (capacity of 42 000 people), spending on non-football-related projects, plus large-scale acquisitions of stars for the team brought the club to its knees. Its debts climbed to $80 million and continued to increase. This is not surprising, given that the club’s annual budget was more than $86 million, but between June and December 2002 alone, it recorded net losses of $19 million. Players’ salary expenses amounted to more than 70% of all revenues. This was despite the fact that specialists in the sports business, e.g., experts from the auditing company Deloitte & Touche, maintained that the share of such expenses should not exceed 50%.
A Stadium and Restaurants as Extras
You might say that Ken Bates and Roman Abramovich found one another at the right time. After failing to find new investors, Bates was ready to sell Chelsea at reduced price, while Abramovich just happened to be looking for a club for himself. As a result, the sale of the club to Roman Abramovich for $99.5 million was announced in early June. Given the debts hanging over Chelsea, it turns out that Roman Abramovich had to, or will have to fork out about $180 million when it comes time to pay off the old debts. An impressive sum, but Chelsea was worth it. After all, Abramovich did not buy just a “bare” club, but the Chelsea Village company, which besides owning the team itself, also owned Stamford Bridge Stadium, several buildings in the area, and a chain of restaurants and recreation centers. Plus all of this is in one of London’s most expensive districts. Abramovich did not limit himself to buying a controlling share in Chelsea Village. Preferring not have any more to do with outside shareholders, he turned his London holdings into a private company, which he organized under the name Chelsea Limited. The owners of the remaining shares received offers to part with their stocks at a good price, and by the end of August, Chelsea Limited became sole owner of the assets formerly belonging to Chelsea Village.
Offers That Were Difficult to Refuse
Along with buying up the remaining shares in free circulation, Roman Abramovich’s agents looked for players for the new Chelsea. It would be no exaggeration to say that the European football transfer market was saved from total collapse by the Russian businessman’s efforts. Moneywise, things are not going well in football today compared to two or three years ago, when transfers of average players for $20–25 million were no surprise to anyone. Prices rose by leaps and bounds, and even the cheapest players, i.e., goalkeepers were going for $7 million or more. Fabien Bartez set a goalkeeper’s record in 2000 when he moved from Monaco to Manchester United for $11.7 million. Field players of the superstar category went for many times more. Luis Figu, for example, cost Real $56 million, while Zinedine Zidane cost $65 million.
By contrast, during the summer bidding slump of 2003, all the German clubs combined spent a little more than $50 million on reinforcements; and half of that amount was for the transfer of Roy McKay from the Spanish team Deportivo to Bayern of Munich. Madrid’s Real paid a “measly” $32 million for David Beckham, who is probably the world’s most popular player.
Unlike the owners of other clubs, Roman Abramovich was no miser. At times it even seemed as though he did not count money when acquiring players. As a rule, a transfer is a long, drawn-out process, where the parties wrangle for a long time. Even so, if the team does not want to give up the player, the deal usually falls through. However, Roman Abramovich’s offers were hard to resist. Actually, he started small. In the first three weeks after Chelsea changed owners, the team acquired Glen Johnson from West Ham United and Wayne Bridge from Southampton for $10.5 million and $11 million, respectively, and Geremi from Real for $11 million. In addition, the club’s management renewed its contract with Eidur Gudjohnsen. Three fairly well known players, Jody Morris, Gabriele Ambrosetti, and Greame Le Saux, left the team. All of them were released to other teams with the consent of coach Claudio Ranieri. The British press endlessly predicted that the Italian would be fired and replaced by none other than Sven-Goran Eriksson, head coach of the English combined team. The English are convinced that Eriksson’s move to Chelsea is a foregone conclusion and that the most likely time is after the next European Championship.
Chelsea’s first really big football transfer under Roman Abramovich was the acquisition of 24-year-old Irish midfielder Damien Duff from Blackburn. This was just the sort of case where a team did not want to release a player. However, it turned out that in Duff’s contract with Blackburn, there was a clause stating that if someone offered $27 million for him, the club did not have the right to block the deal. When Blackburn’s bosses wrote this amount into the contract, they were sure that no one would ever want to pay that much for someone who was not the strongest midfielder. However, Roman Abramovich paid the required amount without haggling and even doubled Duff’s salary to $3.4 million per year. Naturally, for that kind of money, Duff was ready to go to London at a moment’s notice.
Shortly afterwards, Chelsea gained a real star player, Juan Sebastian Veron, a winning player from Argentina’s combined team. Manchester United, where he had played before, was less than enthusiastic about parting with him, since after David Beckham’s departure, the team was short of “creative” midfielders. However, Abramovich’s agents pressed Manchester’s CEO, Peter Kenyon, and got the Argentine for $23.6 million. At the end of August, Kenyon himself left Manchester for London to become Chelsea’s new CEO. “We not only need the best football players, we also need the best managers if we want to turn Chelsea into a real international brand name. Kenyon is just the one we need,” Roman Abramovich commented.
The Buying Spree Isn’t Over Yet
Mr. Abramovich’s activity eventually frightened the heads of football clubs. Peter Hillwood, the head of Arsenal, declared that his players were not for sale, even though no one had made any offers for them. Despite this announcement, some time later, he was offered $75 million for Thierry Henry, or so the British media claimed. Mr. Hillwood’s angry response was, “If this guy thinks he can buy up everything, he’s mistaken. Henry isn’t for sale, even for £70 million. Although I don’t believe anyone can pay that much for one player.”
Massimo Moratti, president of Milan’s Inter team, expressed much the same thought. “Yes, we’ve seen Roman Abramovich. We discussed everything, including the transfer market. He suggested we give him Christian Vieri, but we need him ourselves. Just like we need Alvaro Recoba and Hernan Crespo. None of these three will leave the team,” Mr. Moratti declared. Only a week later, he was forced to backtrack and explain to the fans that he had sold Crespo, because it would have been stupid to refuse. You don’t lightly reject an offer of $26.5 million. Another well-known player in Italy, Romanian forward Adrian Mutu, was bought from Parma for only a little less. Chelsea’s most recent acquisition was Claude Makelele, sold by Real for $26.3 million. Abramovich succeeded in shaking up the whole team; and this was only with football players.
The club’s 11th addition, leader of the Russian combined team, Aleksei Smertin, deserves special mention. He ended up with Chelsea because another leading Russian businessman, Aleksandr Mamut, failed to buy Moscow’s Torpedo team. He had offered $30 million for it, the deal seemed all but clinched, Smertin had been bought back from Bordeaux for the new Torpedo, and the rights to Ognen Koroman had been bought from Dinamo. However, at the last minute, everything fell through. According to Aleksandr Mamut, he and Vladimir Aleshin, the head of OAO Luzhniki, had disagreed on the payment schedule. Mamut was prepared to pay in three installments of $10 million each, but Aleshin wanted the entire amount all at once. As a result, both Smertin and Koroman were left without a team in the middle of the season. So as not to spoil their lives altogether, Smertin went to Chelsea, which promptly leased him to the much more modest Portsmouth, and Koroman went to Samara’s Kryliya Sovetov.
We will digress for a moment and recall other Russian businessmen who were mentioned this year as potential buyers of football clubs. First, there were reports that a certain Russian oligarch was looking closely at Manchester United and was prepared to pay up to $1billion for control of the club. The potential investor was never named. Then, the British newspaper The Independent named Vladimir Potanin, the head of Interros, as a potential buyer of Arsenal. It was alleged that he was prepared to invest more than $200 million in the club, but the matter never went beyond talk.
So far, Roman Abramovich’s investment has paid off, if only on the purely sporting side. Chelsea and its new players got off to a great start in the English Championship, coming in second only slightly behind Arsenal. Things are going quite well for the team in the Champions League too: Chelsea has effectively guaranteed itself a place in the 1/8 finals of Europe’s most prestigious club tournament. It is difficult to say what will happen next. “I’m not sure we’ll win anything in the current season,” Roman Abramovich predicts. “The team still has to learn how to play well together. As far as new purchases are concerned, that depends on the purse—it’s not bottomless. But if I see that we really need a certain player in order to win, I’ll buy him.”
Afsati Dzhusoiti
All the Article in Russian as of Jan. 12, 2004
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