Abramovich Lacks Credit for Chelsea’s Soccer Upswing, CEO Says
The Russian billionaire, who bought the Premier League team in 2003, “doesn’t get as much credit as he should” for shaking up the sport’s established order, Chelsea CEO Ron Gourlay said in an interview in Brazil, where he was attending the FT/IFA Business of Football Summit.
“I don’t think that worries him, it probably worries one or two more of us,” Gourlay said. “It would be nice for him to get more feedback on that, but at the end of the day I think he just wants us to be pushing the football club forward.”
Since buying the west London team for 140 million pounds ($208.6 million) including debt, Abramovich has overseen the most-successful period in Chelsea’s 108-year history. The Blues secured three English league championships and in 2012 won the Champions League to claim their first European Cup, the trophy that Abramovich, 46, craved the most. They added the Europa League title in May, lifting the tally of major prizes in the 10 years under Abramovich to 11.
“He put Chelsea back on the global map and we went from strength to strength,” Gourlay added.
Abramovich’s arrival in soccer heralded an influx of billionaire team investors prepared to absorb million-dollar losses in pursuit of success. He used his fortune to challenge teams including Real Madrid, Barcelona and Manchester United, spending more than 150 million pounds on acquiring top players within a year of buying Chelsea.
‘Parked His Tanks’
David Dein, the former vice-chairman of 13-time English champion Arsenal, said at the time that Abramovich had “parked his tanks on our lawn and started firing 50-pound notes.”
Following his initial spree, Abramovich has spent about 700 million pounds more on talent and covered the same amount in losses, according to club accounts.
Abu Dhabi’s Sheikh Mansour bin Zayed Al Nahyan has matched the Russian’s outlay since acquiring Manchester City in 2008, while billionaires including Qatari Emir Tamim bin Hamad Al Thani more recently invested in French clubs. Monaco, owned by Russia’s Dmitry Rybolovlev, already spent more than 120 million euros ($157 million) on players including Colombian striker Radamel Falcao this offseason.
“Nothing has changed except that it’s not 50-pound notes now, but 500-euro notes,” Dein, the former vice-chairman of England’s Football Association, said in a July 9 telephone interview. “The genie is out of the bottle now and it will be impossible to put it back in.”
The presence of such investors has had an inflationary effect on transfer fees and player salaries, prompting European soccer’s governing body UEFA to introduce fiscal controls aimed at stopping teams spending more than their income.
UEFA’s analysis of the finances of about 700 clubs released in February showed sales of 13.2 billion euros in 2011 were eroded by 9.4 billion euros worth of spending on players and salaries, a 43 percent increase over five years.
Those that fail to meet the criteria may be barred from European competition next season. The legislation has spurred clubs including Chelsea, which in November announced its first profit under Abramovich, to seek new revenue.
Although the current regulatory environment means Chelsea may not be able to spend as lavishly as in the past, Abramovich is ready to pay for top players who can help mount a sustained challenge for honors, according to Gourlay.
“Our whole business model is building on the success of the football team,” he said. “It’s not everybody that likes our model, but at the end of the day when people sit down they can say we have delivered trophies and we’ve taken our football club to an extraordinary level.”
Chelsea’s success has come even as Abramovich, ranked 77th in the latest Bloomberg Billionaires Index, changed the club’s manager 10 times, an average of one coach per year.
Last month’s re-hiring of Jose Mourinho, a popular coach with fans after guiding the Blues to their first English title in half a century during his first spell, will probably end that pattern, said Gourlay, who was promoted to CEO from chief operating officer in 2009.
“It’s never been our intention to make as many changes as we have, but love us or hate us, our model has worked,” he said. “It’s the first time we’ve given any manager a four-year contract. That’s a real statement to say we’ve gone through this period and we want the continuity and we believe in Jose we have the man to do that.”
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