Chelsea FC: The hammer has dropped

The GIST: The U.K. government finally sanctioned Russian oligarch and Chelsea owner Roman Abramovich yesterday in response to Russia’s war on Ukraine. The move, which froze all of Abramovich’s U.K. assets, dramatically impacts club operations and raises questions about Chelsea’s cash flow.

The details: Chelsea will still play, broadcasters will still air matches and players and staff will still be paid, but that’s about it for normalcy. Moving forward, Chelsea will be limited to a $655K budget for each home game, and $26K for travel to each away game. Home crowds will only consist of fans who already bought tickets.

• The limitations don’t end there — the club can no longer sell tickets or merchandise, transfer players or offer new contracts.

• The freeze means Abramovich cannot sell Chelsea without special licensure from the government, despite courting offers since last week. The government will eventually oversee the sale, which will require assurances that Abramovich won’t profit from it.

The sponsors: In response, British telecommunications company Three suspended its sponsorship with Chelsea. Three has been the shirt sponsor for both the men’s and women’s teams since 2020, when the parties signed a reported $52.4 million annual deal.

• Sleeve sponsor Hyundai may follow suit. The automotive company, which has been an official partner since inking a $13 million annual deal in 2018, said it’s “assessing the situation.”

Zooming out: Balancing Chelsea’s budget is going to be an incredibly messy task. The club is down to one guaranteed source of income — broadcast deals.

• Questions remain about whether Chelsea is liquid enough to run without Abramovich’s money. The club had a post-tax loss of $196.4 million for the year ending June 30th, 2021. Major yikes.