Chelsea facing severe sanctions: Here’s why fans should be worried

Chelsea is confronted with the impending deduction of points: Adam Clery of FourFourTwo is available to analyze the situation.

Just as Chelsea appeared to be experiencing a turnaround, a massive report published in the Guardian today reveals that they are in grave danger of having points deducted.

To begin with, it is crucial to clarify that the newspaper is not conducting an undercover operation against the football club. Cyprus Confidential is the name of a massive international investigation that this is a component of. Parts of the approximately 3.6 million offshore company documents that the International Consortium of Investigative Journalists has uncovered have been made available to dozens of news organizations worldwide.

This has led to numerous revelations, including the possibility that former Chelsea owner Roman Abramovic funded the club in a manner that not only disregarded profitability and sustainability regulations, but openly ridiculed them.

The headline for Chelsea supporters is that an investigation into all of this has begun, and if the club is found to have violated these regulations to the degree that it appears they have, a points deduction is highly probable.

Consequently, what have they purportedly done? Also, have they carried out that action?

Thus, a brief history instruction for those under the age of twenty: In 2003, Roman Abramovich acquired Chelsea for £140 million, an absolutely absurd quantity of money. Although people forget, this has never, ever occurred on this magnitude before at the time. It went from Petit and Gallas to Crespo, Veron, Duff, Makelele, Parker, Cole, Duff, Bridge, Glen Johnson, and Mutu in the course of one window. Practically immediately, the situation descended into chaos.

After Russia’s invasion of Ukraine rendered the financial sanctions imposed by the United Kingdom on the country untenable, he sold up last year. However, since the very day he announced his departure, a variety of opinions have circulated regarding the matter.

Indeed, the Premier League had already initiated an investigation into their financial situation. Todd Bohelly et al. reported voluntarily that they had discovered “incomplete financial information” spanning the years 2012 to 2019. I would like to offer a brief editorial observation: I am perplexed as to why you would betray yourself in such a manner, unless your intention was to later play the “look, we’ve been extremely cooperative; we’re not the bad guys” card.

However, that is all ancient news. The news is recent. Or simply “news,” as it is referred to.

As reported by the Guardian, these Cyprus Confidential documents document an investigation into concealed payments that are directly associated with the footballing activities of the club. In matters pertaining to transfers and managers, it is probable that they would not have achieved the level of success they have achieved if not for these payments.

A tax haven-based organization known as Conibair Holdings, incorporated in the British Virgin Islands, entered into a contractual arrangement with Italian football agent Federico Pastorello in July 2017. They paid him £10 million for a 75% stake in Excellence Investment Fund (EIF), a non-essential US financial enterprise that is merely an arbitrary entity.

The ownership of Conibair Holdings by Roman Abramovic is crucial. Moreover, it is well-known that this agent, Pastorello, maintained close ties with Antonio Conte, the manager of Chelsea at the time. Exactly what is the issue with that, one might inquire? On the very same day that Chelsea received the £10 million payment, Antonio Conte inked a new contract worth £9.6 million per year.

Furthermore, Eden Hazard exists. Unquestionably one of Chelsea’s all-time greatest performers, he led the club to the Premier League championship that secured Conte a lucrative new contract. However, upon his arrival at the club, it was alleged that his agent John Bico-Penaque was owed a substantial fee in addition to the roughly £30 million they paid Lille for him. According to reports at the time, he desired between £5 million and $6 million.

Eight months after Hazard’s arrival, in March 2013, documents indicate that another Virgin Islands-based company owned by Abramovic paid approximately £6 million to Gulf Value FZE of Dubai. Specifically designated for “advisory services pertaining to sport research and consulting.”

For whom was that contract signed by… anyone? Anyone interested? Bico-Penaque, John. It is possible that he did offer “advisory services […] pertaining to […] sports research and consultancy” via a Dubai-based financial firm that serves numerous clients, including Leiston Holdings. Investment firms headquartered in tax havens that are eager to receive advice on sports-related matters. Might be?

Alternatively, they may have redirected the funds necessary to compensate Hazard’s agent via these holding companies in order to a) evade taxation on the funds and b) circumvent the obligation to disclose the funds to football’s governing bodies, thereby preventing their inclusion in calculations pertaining to profitability and sustainability regulations. I have no idea; I am not a physician.

This contains a multitude of additional components as well. Approximately £7 million was paid to the Lemic brothers. Close associates of Abramocivc who were reportedly instrumental in the club’s acquisitions of Arjen Robben, Branislav Ivanovic, Nemanja Matic, and double-winning coach Carlo Ancelotti. It continues on in this manner.

Why then is this an issue? Financially speaking, football is essentially the most corrupt industry on the globe, and surely everyone is “at it” in some way or another. Undoubtedly, so. However, rules still remain. And I mean it when major organizations violate the major regulations. Almost always, a significant reaction ensues.

The aforementioned quote was included in the Guardian article. The aspect that ought to cause concern for Chelsea supporters.

According to football finance expert and author of The Price of Football, Kieran Maguire, sanctions would consist of a points deduction or monetary penalty if there is evidence that the club circumvented the profitability and sustainability regulations through third-party transactions. “The latter is more probable, given that a commission examining the club’s operations will seek to establish a deterrent that discourages similar conduct in the future.”

Assuming substantiated evidence implicating the institution in third-party transactions. All other entities and individuals that I have referenced here as having paid Chelsea-affiliated individuals or organizations money, whether directly or indirectly, constitute a third party. Their ownership by Abramocivh does not imply that they are club members. It is against the regulations for them to expend their personal funds on behalf of a football club.

Now, for extremely apparent legal reasons, we cannot say whether or not that has occurred. It will be the responsibility of the game’s governing bodies to conduct an investigation and ascertain the truth. Although I have not yet reviewed this report, it does not appear to be a positive sign.