27th February 2022
Last night – at 6.45pm on Saturday – Chelsea Football Club unexpectedly published this statement:
Statement from Club Owner Roman Abramovich.
— Chelsea FC (@ChelseaFC) February 26, 2022
In terms of media coverage, the statement could not have been timed better.
It was early enough to be just about picked by the Sunday newspapers, but late enough to avoid lengthy scrutiny.
And it was at that time on a Saturday that those on Twitter are expecting ‘breaking’ stories.
Accordingly, the statement was quickly taken (and shared) by many in news and sports media as being significant.
This apparent significance also seemed warranted by the content of the statement, which I publish below (with sentences split out):
“Statement from Club Owner Roman Abramovich
“During my nearly 20-year ownership of Chelsea FC, I have always viewed my role as a custodian of the Club, whose job it is ensuring that we are as successful as we can be today, as well as build for the future, while also playing a positive role in our communities.
“I have always taken decisions with the Club’s best interest at heart.
“I remain committed to these values.
“That is why I am today giving trustees of Chelsea’s charitable Foundation the stewardship and care of Chelsea FC.
“I believe that currently they are in the best position to look after the interests of the Club, players, staff, and fans.”
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Let us look at what this actually says.
One phrase which stands out is “stewardship and care” – which Abramovich is “giving” to the “trustees of Chelsea’s charitable Foundation”.
Two sentences before that phrase – deftly – this is framed as a “decision”.
This looks solemn and legally meaningful.
But.
The statement has no legal meaning at all.
Indeed, it would seem that the statement was crafted deliberately so as to give the impression that something legally significant was happening – a “decision” to transfer a thing to “trustees” – when nothing legally significant was happening at all.
This is PR – and this is what you get when you can afford expensive and wily PRs.
And it had the desired effect:
Chelsea's Russian owner Roman Abramovich to hand over "stewardship and care" of club to its charitable foundation https://t.co/OUIQJCevwj
— BBC Breaking News (@BBCBreaking) February 26, 2022
And there were many excited tweets from those in news media who should have known better suggesting the statement said something important.
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The phrase “stewardship and care” looks like it should be a legal phrase.
It is similar to, say, “duty of care” (which is a legal term of art) – and “stewardship” has a nice legal-ish comforting ring to it.
But it is flapdoodle.
What one transfers to trustees is not “stewardship and care” but ownership of property.
The trustees then – literally – hold that property on trust on behalf of beneficiaries.
But if you look at the Chelsea FC statement there is no property been passed to trustees.
The word “trustees” is, in effect, a misdirection.
They may as well be assistant referees or physiotherapists, for their title is – strictly speaking – irrelevant to what is being described
It is very skilfully put-together statement for journalists and others in a hurry.
And only those with a background in commercial and trusts law would realise immediately that the statement did not actually say what it seemed to say.
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This does not mean that the fact of such a statement is not without its own significance.
There would be a purpose to such a statement at such a time: statements like this are not randomly put out at 6.45pm on a Saturday when Russia is invading Ukraine.
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Of course: there is nothing wrong about retaining ownership of Chelsea FC – even from my perspective as an Aston Villa supporter.
It is certainly not defamatory to say that Abramovich remains as much the owner of Chelsea FC after this statement as he was before.
(And we would especially like to welcome all the representatives of London’s defamation law enforcement community who have chosen to join us here on the law and policy blog at this time.)
Nothing on this blog should be taken to mean that one should think any worse of anyone involved – indeed, this post registers admiration at a such a perfectly deft exercise in PR.
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A very fair blog.
I would just take issue with the claim it requires someone with a background in “commercial and trust law” to understand it was flim flam.
I have neither – and it took me 10 seconds. But maybe I’m just an old cynic?
And the classic lawyers’ use of “currently”….
To be honest, I was already raising an eyebrow at ‘custodian’ rather than ‘owner’.
It’s all PR as DAG says – but it also seems to be effective PR.
What is interesting for me, however, is there does seem to be a bit of the turning of the tide.
Even people who had the rather bonkers idea that billionaires had earned their money fair and square are coming to the conclusion that there is something wrong.
Will it last? I don’t know but we can hope.
Neat nod to the Blues Brothers there. I’ll be watching it later
Orange Whip anybody?
An excellent ‘Blues Brothers’ reference in there as well, David.
Agreed!
Yes, so Roman’s mate will be looking after the Chels for a few days.
I came for the analysis. Stayed for the 80s pop culture references.
Bravo!
It will be interesting to see whether there are any changes to the PSC register of Chelsea FC plc or Fordstam Limited. That might give a clue
When I saw the announcement I did assume that it meant something, even if not exactly what. Thank you for your clarification.
I wonder how this compares to the situation where politicians put assets into blind trusts during a period of elected office so as to avoid conflicts of interest (or the illusion thereof).
Everything appears to change and yet everything stays the same – I am told Abramovich is worried that his assets in the UK may be frozen. I personally think we’re a long way from it being that cold. It is amazing what can be done with smoke and mirrors.
Interesting read as always, David, but I really think you’re giving Chelsea’s PR advisors far too much credit (“ this post registers admiration at a such a perfectly deft exercise in PR”). As someone who has advised major corporations on crisis communications, this statement has done the exact opposite of what was intended. The intention was to try and distance Chelsea from its owner and curtail questions about what sanctions on Abramovic would mean for the football club. But it hasn’t taken legal experts to see that the statement was meaningless. Micah Richard, Dave Jones and Karen Carney – renowned for many things but not for being the sharpest legal minds – picked it apart instantly on Sky last night.
There always would’ve been some discussion about Abramovic’s ties to Putin given Chelsea are playing in a cup final today. But by putting out a statement that raises more questions than it answers, Chelsea have just drawn yet more attention to the situation.
Yes, Newcastle and England legend Alan Shearer – no legal eagle – told MOTD that it was from clear and didn’t seem to make any sense.
What about the £150 million Chelsea FC owe Abramavitch? That alone made me unqualified IN law realise it was a clever PR job.
It is 1500 million, not 150 million.
150 million is probably just a couple of transfer windows at this point.
Which is bonkers. But we are where we are.
As well as this interesting piece, The Athletic published a pretty good explainer this morning (paywall): https://theathletic.com/3151831/2022/02/27/explained-why-roman-abramovich-has-handed-over-care-of-chelsea-and-what-it-really-means/?source=user_shared_article
I don’t have a legal background, so it could be that there are mistakes in it that I haven’t picked up on, but it seems to reiterate what you have said in a bit more detail, with quotes from experts who seem qualified to comment on it.
Worth a read for anyone with a subscription.
As well as this interesting post, The Athletic also published an interesting explainer which goes into the Abramovich statement in some detail (paywall): https://theathletic.com/3151831/2022/02/27/explained-why-roman-abramovich-has-handed-over-care-of-chelsea-and-what-it-really-means/?source=user_shared_article
Worth a read if you have a subscription.
Well, as I understand it from the records at Companies House, Chelsea Football Club Limited is wholly owned by Chelsea FC plc, and that company is wholly owned by Fordstam Limited, which has 601 shares. All of these companies are registered in England. All of the shares in Fordstam Limited were registered the name of Mr Roman Abramovich in the last full list of shareholders dated 22 May 2016. From what is published since then, there appears to be no change in ownership, and he is still a “person with significant control” owning 75% or more of the shares.
The group accounts to June 2020 show a turnover of around £400m, a substantial loss that year of over £100m, accumulated losses of over £800m, and a large deficit of net assets including a debt of nearly £1.4 billion owed to a related party, Camberley International Investments Limited, which appears to be based offshore, perhaps Jersey, perhaps BVI. As I understand it, the valuation of the business would be less than that, so arguably that company could take control if there was any question of the club’s solvency.
Chelsea FC Foundation is an English company, limited by guarantee, with charitable objects, and about £6m of cashflow each year from donations and charitable spending. One of its directors is also a director of the football club, but the others seem more closely involved with the charity.
As far as I am aware, nothing has changed about the ownership of the companies. Perhaps there will be some changes in governance structures, but the directors of the relevant companies will continue to have their statutory and common law responsibility for managing the affairs of each company.
So what does “stewardship and care” entail, exactly? And what makes a relatively small charitable company and its directors the best people to undertake that in relation to a business with a £400m turnover? I wonder if they understand what they have been asked to do.
I think all they’ve been asked to do is to provide a respectable front for a branch of his money laundering operation, for a short while.
They won’t have to do any important stuff.
Interesting read.
As a long-time Chelsea supporter with (a bit of) legal knowledge I was bemused by the statement for similar reasons. But two non-legal points jumped out at me.
Firstly, that Chelsea has a ‘charitable’ foundation. And as Andrew has observed, it’s not clear why its trustees are particularly qualified to run a football club. Still, ‘trustee’ has a warm, comforting ring to it.
Secondly, the inference from it that Mr A has had a hands-on role up till now. That has certainly been suspected in footballing matters and would explain a lot of the quixotic managerial appointments and sackings and some feeble big-name signings over the years. Even if he is merely distancing himself from his vanity project rather than ceding ownership, I for one welcome this development!
Very much hoping that you will be signing off your next blog with a live rendition of Everybody Needs Somebody to Love
Would have to put the band back together first
I hope that something can be meaningfully done to separate RA from the club. Until then I think that the club must be sanctioned. It must not be allowed to compete in any competitions or conduct any transactions.
Knowing there was something wrong with this statement, but legal training lacking, I am very grateful for this blog. And still surprised at my willingness to believe that the BBC would somehow have appraised this statement before breathlessly broadcasting it. Journalism’s kinda scary….
In fairness, this flimflam was called out by legal footy people on Twitter within minutes.
But, of course, such people don’t write headlines.
Interesting and astute article, but it does rather take us forward as far as Occam’s Razor and then leave us there.
Specifically, *why* would Mr. Abramovich feel the need to issue a statement like this? Previous comments suggest that he is bankrolling the company to the tune of £1.5 billion – hey, everyone needs a hobby – and that he retains complete ownership of the actual club.
So why say anything at all?
David correctly points out the fact that this statement was almost certainly crafted through the unholy matrimony of a marketing/PR person and a lawyer… so clearly Mr. Abramovich felt it important to say this at this particular moment in time.
Absent the facts and with the irresistible urge to speculate, I’ll offer a “starter for 10” and invite everyone to edit/challenge.
What if he felt that there was a good chance that the actions of the Russian government – the invasion of Ukraine – resulted in anger from fans and/or other individuals able to reach Chealsea’s stadium, who might be inclined to go there with the intent to cause criminal damage?
Obviously the stadium is going to have an exceptionally good insurance policy, but perhaps the potential PR spectacle of the stadium daubed in anti-Putin graffiti might have been enough?
I have the sense that the move was pre-emptive in nature and potentially assembled somewhat hastily, but it doesn’t follow that my suggested motive, above is valid.
Does anyone else have ideas on what the actual motive might be?
Curious…
Your thought is a good one, that this was a pre-emptive move to reduce the ‘russian-ness’ of the club or at the very least the appearance of russian-ness.
Earlier today, I read that a comparison website had temporarily suspended its ad campaign involving meerkats. The reason given was that they did not want to be seen to be on the ‘russian’ side and did not want their ads to be shown alongside news coverage of the conflict.
I would have thought that the public could have distinguished these fictional characters dressed up as animal puppets from the real-life government of Russia, but clearly the company did not want to take any chances.
Some people might just think that the way this particular football club has been financed over the years it would be just and equitable to close it down .
Pro bono ?
“Flapdoodle” and the Blues Brothers?
My cup runneth over.
Legal commentary and cultural references I understand in one easily assimilated blog.
Thank you.
The only persons legally allowed to direct the affairs of a company are the appointed directors of that company. The blog has established that no ownership of any assets has been transferred as a result of the carefully crafted statement and we must await what change of control (if any) has actually taken place.
I’m not sure how any company limited by guarantee and with charitable objects could run a premier league club.
Now that this story has taken a turn tonight, is it fair to say that Parliament has some teeth after all?