Roman Abramovich must decide whether new Chelsea stadium is worth the hassle

James Olley5 June 2018

Sometimes politics and sport really don’t mix. While Roman Abramovich’s visa issues are inextricably linked to his decision to delay the redevelopment of Stamford Bridge, the “unfavourable investment climate” cited in Chelsea’s statement yesterday alludes to a more complex picture.

Russian money was welcomed into London with open arms when Abramovich bought Chelsea 15 years ago. There was a sizeable influx of oligarch cash which came flooding into the capital to the extent then-Mayor of London Boris Johnson welcomed them in their mother tongue: Dobro pozhalovat!

Yet today, relations between the Kremlin and the West are at their worst since the Cold War, economic sanctions on some of Russia’s biggest companies have strangled overseas investment and fluctuations in the rouble’s value only heighten the risk of making a big play.

Abramovich’s visa is one aspect of this. Since 2015, the tier one investment visa he has so far not renewed has come under particular scrutiny when, according to the Financial Times, “extra checks on whether funds had been obtained lawfully saw the number of applications drop by 84 per cent”.

That is not to imply any impropriety on Abramovich’s part, but he may just not consider it worth the hassle given other factors involved.

The general ability to ratchet up the level of Russian investment in the current climate has diminished and they are not alone. Sources who have worked on finance deals for clubs in the past few months describe a picture in which certain Chinese investors have been squeezed in a similar way.

And then there’s Brexit. The terms of the UK’s departure from the European Union are yet to be clarified and the uncertainty that creates has displayed itself in a variety of ways, not least the Bank of England keeping interest rates lower than expected.

Even before the visa issues, Abramovich was considering multiple offers to borrow up to three-quarters of the proposed £1.2billion cost - a figure which is already considerably higher than original estimates.

Tottenham have encountered similar issues, with the club’s executive director Donna Cullen confirming in March that “Brexit has added a straight 20 per cent on costs for foreign goods due to the exchange rate, overtime working and increased construction costs”.

Chelsea's new £500m stadium located at their current home Stamford Bridge has been approved
Hussain Nazrul/Herzog and de Meuron/Hammersmith and Fulham Council

Abramovich’s personal wealth - estimated at £8.5billion - is clearly sufficient to insulate him from the worst of these market forces but Chelsea’s drive towards self-sustainability and financial prudence would be compromised by a gamble of this size, at this time on a new stadium.

The visa issue is clearly a factor but Chelsea have been mulling over their options for several months. Abramovich has concluded the time isn’t right. Plenty has to be clarified before that will change.

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