Chelsea for sale as spotlight falls on Russian money trail

Russia's invasion of Ukraine has led to the country's general ostracization on the world stage. In addition to the political and economic sanctions imposed by national and supranational institutions, cultural and sporting bodies are also taking measures to distance themselves from Russia.

The International Olympic Committee (IOC) has recommended a ban on Russian and Belarusian athletes, world and European football governing bodies FIFA and UEFA have banned Russian teams from competitions, the Russian city of St. Petersburg has been stripped of this season's Champions League final, and German club Schalke have severed long-term ties with state-owned Russian energy company Gazprom.

In the United Kingdom, Manchester United canceled its sponsorship deal with Russian state airline Aeroflot while, perhaps most notably, Russian billionaire Roman Abramovich announced that he was putting Premier League club Chelsea up for sale on Wednesday.

"I have always taken decisions with the Club’s best interest at heart," Abramovich's statement read. "In the current situation, I have therefore taken the decision to sell the Club, as I believe this is in the best interest of the Club, the fans, the employees, as well as the Club’s sponsors and partners."

There are reportedly several interested parties, and Abramovich said he "will not be asking for any loans to be repaid." These loans are estimated to be worth £1.5 billion ($2 billion, €1.8 billion). He also added that "all net proceeds from the sale will be donated" to a charitable foundation he will set up "for the benefit of all victims of the war in Ukraine." 

But untangling all of Russia's connections to global sport is an almost impossible task given how deep the links go. Russia has long been accused by human rights campaigners of so called "sportswashing" — using investment in sports as way of deflecting from political or social problems at home.

The accusation is most commonly leveled at Middle Eastern states such as Qatar, Abu Dhabi and Saudi Arabia, who deny that their respective links to Paris Saint-Germain, Manchester City and, most recently, Newcastle United, have anything to do with laundering their international reputations. Nor, they claim, is the purpose of hosting major international sporting events such as the 2022 World Cup (Qatar), F1 Grands Prix (Abu Dhabi) or big boxing bouts (Saudi Arabia) to gloss over well-documented human rights abuses.

Sportswashing to distract from deficits at home?

Russian involvement in global sport, however, is more nuanced.

"The link to the state remains, it is just a different sort of link to the Arab nations," J. James Reade at the UK's University of Reading, who specializes in economics and sport, told DW. 

To a degree, Russian sportswashing does serve to distract from human rights and democratic deficits at home — as the 2018 World Cup in Russia achieved. Attempts by the Kremlin to manipulate opinions abroad are nothing new.

Allegations of Russian interference in both the 2016 Brexit referendum in the United Kingdom and the US presidential election later that year remain widespread while, according to the British anti-corruption organization Transparency International, quoted by the BBC this week, over £1.5bn ($2bn) of UK real estate is owned by Russians accused of financial crime or with links to the Kremlin.

The British home secretary has admitted: "For too long, London has been the place that people have come to wash dirty money."

While a court case in December 2021 ascertained that Abramovich's purchase of Chelsea Football Club in 2003 was not ordered or directed by Vladimir Putin or the Russian government, the billionaire's move to sell up just as the British government threatened sanctions against wealthy Russian individuals has prompted renewed scrutiny.

"Surely, Mr Abramovich should no longer be able to own a football club in this country," member of parliament Chris Bryant told the UK House of Commons last week, before Abramovich announced his intention to sell. "Surely we should be looking at seizing some of his assets, including his £150 million home, and making sure that other people who have had tier 1 visas like this are not engaged in malign activity in the UK?"

In making his claims, Bryant was making use of British parliamentary privilege to quote from a leaked 2019 Home Office report which, according to Bryant, stated:

"Abramovich remains of interest to [the British government] due to his links to the Russian state and his public association with corrupt activity and practices. An example of this is Abramovich admitting in court proceedings that he paid for political influence [A UK court heard in 2008 that Abramovich paid money for "protection" in Russia, a phenomenon known as krysha - editor].

"Therefore [the British government] is focused on ensuring individuals linked to illicit finance and malign activity are unable to base themselves in the UK, and will use the relevant tools at its disposal, including immigration powers, to prevent this."

Alisher Usmanov and Everton

The Russian billionaires who have invested heavily in European football are not trying to make money. 

"Football doesn't get you a return on investment," Reade explains. "It is some type of gratification, utility maximization."

Uzbekistan-born Alisher Usmanov was previously a shareholder in Arsenal and, until Wednesday, an investor at fellow English Premier League side Everton. His company USM Holdings sponsored Everton's training ground and Usmanov had an exclusive £30m ($40m) naming-rights option for Everton's new stadium, which is still under construction in Liverpool.

But Everton said in a statement on Wednesday: "The Club can confirm that it has suspended with immediate effect all commercial sponsorship arrangements with the Russian companies USM, Megafon and Yota."

Usmanov's assets have been frozen by the European Union following Russia's invasion of Ukraine, the EU statement explicitly linking him to Putin, saying: "Alisher Usmanov is a pro-Kremlin oligarch with particularly close ties to Russian president Vladimir Putin" and adding he that he helped "materially or financially Russian decision-makers responsible for the annexation of Crimea and the destabilization of Ukraine."

Usmanov defended himself on Tuesday, calling the EU decision "unfair" and adding that "the reasons employed to justify the sanctions are a set of false and defamatory allegations damaging my honor, dignity, and business reputation." 

He has since stepped down as president of the International Fencing Federation (FIE), while German authorities in Hamburg seized his $600m dollar yacht "Dilbar."

Despite the club's ties to Russia, Everton's players, including Ukrainian defender Vitalli Mykolenko, took to the field on Saturday in Ukranian colors, as did opponents Manchester City, including Ukraine international Oleksandr Zinchenko.

English champions City are, of course, owned by Sheikh Mansour bin Zayed Al Nahyan, the deputy prime minister and half-brother of the president of the United Arab Emirates, which on Saturday abstained from voting on a United Nations Security Council Resolution to punish Russia.

Money trail

And the European football links go on. Ivan Savvidis, with close ties to Putin, owns Greek club PAOK. Maxim Demin controls second-tier English side Bournemouth, Dmitry Rybolovlev bought AS Monaco of France and Cercle Brugge of Belgium and Valeriy Oyf owns Dutch side Vitesse Arnhem.

There are strict rules in some countries such as Germany preventing majority ownership of football clubs, but Russians have splashed their money in other sports - in essence sportswashing their own backgrounds as much as Russia as a nation, while also anchoring Russian money at the heart of Western cultural assets.

Mikhail Prokhorov formerly owned the Brooklyn Nets NBA team, while ice hockey's NHL in North America sealed deals with Russian betting firm Liga Stavok and search engine Yandex weeks before the Ukraine crisis.

In Formula One, September's Russian Grand Prix in Sochi, which has been run since 2014, has been canceled following the Ukraine crisis, while Haas F1 stripped their car of the company logo of Russian investor Dmitry Mazepin, an ally of Putin whose son Nikita owes his place on the grid to his father's influence. During a memorable 2021 season, races were held in Baharain, Qatar, Saudi Arabia and Abu Dhabi, with Lewis Hamilton among those to express misgivings.

The deep Russian money trail, which was meant to show how powerful Russia had become in global sports, is now threatening to unravel at double quick speed. 

Additional reporting by: Georg Braunschweig

Edited by: Matt Pearson