October 2, 2022

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Barclays froze Chelsea credit cards after Abramovich sanctions

Barclays froze Chelsea credit cards after Abramovich sanctions

Sources told ESPN that Chelsea’s ability to operate on a daily basis became more complex on Friday after Barclays temporarily froze the club’s credit cards.

The news that was First reported by The TimesIt comes after the club’s assets were frozen on Thursday following British government sanctions against club owner Roman Abramovich.

The Blues have been given license to continue meeting fixtures and paying employees, but they are dependent on cash reserves to operate, with various revenue streams halted as part of government actions on Abramovich due to his alleged ties to Russian President Vladimir Putin.

Sources told ESPN that spending limits – which include a cap of around £20,000 ($26,000) for travel to outdoor matches and a £500,000 cap on the cost of organizing home games – have pushed Barclays to do so. Suspending the club’s credit cards for fear of violating government rules.

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The club is still in dialogue with the government about easing some restrictions and senior Chelsea figures hope their corporate credit card bans will be unblocked in the coming days to allow more financial freedom.

Talks are continuing about allowing the club greater access to generate revenue as there are concerns that Chelsea will not be able to generate enough funds to continue to meet their obligations if sanctions persist for an extended period.

The club’s latest accounts, published in December for the year ending June 30, 2021, showed a cash balance of just 17 million pounds ($22.2 million), much lower than many of their rivals.

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It is still possible that if the government decides not to make certain financial concessions, the club could technically become insolvent in the coming weeks which could result in a nine-point deduction under Premier League rules.

However, Abramovich is expected to seek a separate license to sell the club, with interested parties requesting to be briefed on how to proceed with the bid with the government’s participation.

As the club is an asset frozen by the government, bidders will need approval from the Ministry of Culture, Media and Sports for any sale to take place.

It is now almost certain that Abramovich will not find a buyer willing to pay his asking price of 3 billion pounds ($3.9 billion) given the current situation, but a quick sale at a discount appears increasingly the most viable option for all parties.

Chelsea’s immediate photo underscores the gravity of the situation. There will be no sales for the match day program for Sunday’s Premier League game against Newcastle United.

The club still has to decide what to wear in the front of their kit after the third-shirt sponsor temporarily suspended its 40 million pound ($52.4 million) agreement with the club on Thursday.

The club store remains closed, the hotel in Stamford Bridge can no longer make reservations until further notice and Chelsea cannot sell tickets for matches other than those already sold to season ticket holders and single match ticket holders.

There is still hope that the club can find a way to fill Stamford Bridge by donating the proceeds to the Ukraine victims, but this will not help the club’s cash flow problems.

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Chelsea will not have to change the itinerary of the Champions League round of 16 second leg to next week’s night as the trip was already paid for before the government intervened on Thursday.