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Chelsea in danger of running out of money

Lavish spending, sustained only by Roman Abramovich’s investment, funded Chelsea’s 21 trophies during his 19 years as owner.

Now there are fears the Premier League club could run out of money after the British government sanctioned the Russian oligarch and froze his assets.

A team that won the Champions League last year and was crowned world champions by FIFA a month ago has now had some banking facilities frozen with officials unable to use corporate credit cards, while Barclaycard assesses what is permitted under government rules.

Chelsea are only allowed to continue operating and playing games under conditions set out by the government through a special licence, with caps on spending and a prohibition on selling tickets that will impair the cash flow for a club with a last published wage bill of almost STG28 million pounds ($A50 million) a month.

Chelsea officials spent Friday in talks with the government to discuss how the club can continue to pay staff, operate Stamford Bridge on matchdays and ensure the club can be sold.

Abramovich had already announced plans to sell his trophy asset last week before he was sanctioned on Thursday over links to Russian President Vladimir Putin following the invasion of Ukraine.

The Raine Group, an investment bank, is working on the sale process on behalf of Abramovich, who remains owner of Chelsea.

He originally hoped to divert the proceeds into a new foundation for the victims of the war in Ukraine, which he is yet to condemn Putin for launching. The government, however, will only sanction a sale that does not see Abramovich benefit or being influential to Putin’s regime.

There are potential buyers waiting in the wings, including British property investor Nick Candy and Todd Boehly, a part owner of the MLB’s Los Angeles Dodgers.

The only bright spots for Chelsea on its second day as a sanctioned entity were no more sponsors suspended deals after the jersey backer, communications firm Three, asked for their logo to be removed.

Jersey maker Nike was yet to halt their sponsorship. Another sponsor, hotel search website Trivago, said they would remain sponsor of the training kits.

“We are looking forward to a transition of ownership as soon as possible and want to support the club in this process,” Trivago said. “We will provide any update to our business relationship if and when appropriate.”

The statement condemned the “unprovoked and catastrophic invasion of Ukraine” without naming Russia. Hotels on their website could still be booked in Russia on Friday night.

Booking travel is a looming challenge for Chelsea. The trip to France to play Lille in the Champions League next week has already been bought, but the spending on travel to future games has been capped at STG20,000 ($A38,000) by the government.

Chelsea can also only spend STG500,000 ($A895,000) on matchdays, starting Sunday at home to Newcastle in the Premier League, won five times under Abramovich. The league title had been won only once in the 98 years before Abramovich bought the club in 2003.

Only five times during his ownership has Chelsea made a profit, according to the respected Swiss Ramble account on Twitter that analyses club accounts.

There have been cumulative losses of around STG900 million pounds ($A1.6 billion) in almost two decades of Abramovich’s ownership, while annual revenue has grown from STG110 million pounds in 2003 to STG435 million pounds in the last financial year.

Chelsea has been reliant on the STG1.5 billion pounds ($A2.7 billion) of loans that Abramovich has pumped into the club which he has said he will not ask to be repaid.

The club can no longer even sell merchandise with the club shop closing within hours of the sanctioning announcement on Thursday.

There is also a prohibition from the government on selling new tickets to generate revenue. Only season ticket holders can go to Premier League matches.

There is the prospect of the stadium being empty for a potential Champions League quarter-final as tickets for those games would not be included for fans who bought season passes.

Chelsea are also unable to sell tickets for next week’s FA Cup match at Middlesbrough, hitting the second division club as well.

The impact could be felt hardest by temporary staff no longer being required to work at Chelsea matches.

The priority now is to avoid having to go into administration – bankruptcy protection.

History, though, could be repeating itself. Chelsea were sold for one pound in 1982 to Ken Bates due to financial trouble and then Abramovich stepped in with his 2003 takeover when there were further cash problems.

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