Looking at the present Russian economic woes, I was wondering if someone had a better understanding of our club finances and what happens on our end if Roman’s wealth hits a major hurdle? We’ve seem to have steady shipped since the early spending days and I believe we presently generate revenue instead of a deficit. So does Roman still invest in the club directly or we can be considered self-sustainable?

I'd say we've reached the point of self-sustainability. 

 

We've won a lot ever since we were bought by Roman and that counts for a lot in today's game.

In terms of his business profile the Rouble downturn will hardly affect his net wealth since he tends to invest in European markets and the Swiss banks. The only worry is that Putin could inflict some draconian measures upon the Oligarchs, effectively forcing them to give up large sums of money or companies to the state in return for assurances that they will not be prosecuted for past dealings.

Even the post passive investor diversifies their portfolio to ensure that they get a wide range of risk and security.

 

There is absolutely no way that Roman, with all of his advisors, accountants and lawyers, would have a fortune dependent amount of wealth sitting in a country riddled by corruption and political backstabbing.

As Zola said, he's diversified well beyond being dependent on the ruble.

Just to give you an idea of how extensively major banks and wealthy people secure their wealth through foreign markets, the majority of U.S. dollars are actually held outside of the USA.

some clubs wish they had a real wealthy football fan owner like him who is not on the make! 

If there's one Russian who will actually make money from the ruble debacle it's Roman Abramovich.

Well if FFP is to be properly enforced, I fail to see how this would additionally impact the club other than youth/stadium investments which I think the club would be able to secure funding through external means, such as issuing debt though I doubt Roman would issue equity unless he is selling the whole kit and kaboodle which, despite the fantasy's of other sets of supporters, really doesnt look likely in the near future and even if it did, it would have to be another multi-billionaire with an urge to splash who can afford CFC and not some barely liquid millionaire who would see us spiral down the divisions.  Dont forget that  we have, over the last half decade or so, had the second best revenue generation in the BPL behind Man U.  In that context, its not unrealistic to expect that even if Roman walked and we saw no more external investment into the team, we would be cemented as a team fighting for CL spots for the foreseeale future and not immediately return to the yo-yo status we commonly experienced before Roman.

 

Baring the unforeseen, Roman has ensured that the darkest days of this club are in the rear view mirror even if he went bankrupt today.

 

On another note, these are great times to invest for the wealthy(or the savvy).  My major concern, were I to have one, is that Roman will be investing so heavily that he has little liquidity to dedicate to the club.  Yet again, under FFP, he cant pour out his coffers even if he wants to so whether he can becomes nearly redundant. 

I wouldnt be so sure just yet, no doubt Roman has his fingers in a lot of pies, but he made his fortune of his money in the Oil and Gas industry.

With the embargoes in place, companies like Gazprom (where he has invested heavily recently) is based in Moscow and they will be losing a lot of money right now.

Its not good for anyone, especially the Russian people. Putin needs to stop being an asshole.

[Apologies to mods. I tried to the edit the above post and I seemingly do not have permission to do so.]

 

I have to make my first post at some time, so what the hell.

 

I have no special knowledge of Chelsea finances, I took the liberty of asking a friend who works in the financial markets (not as a bank manager, either) what he thought and his response was basically, and I'm paraphrasing here: "Abramovich is very secretive but from the little I do know I'd be very surprised if he has much money denominated in roubles beyond that which he needs to tithe the Russian state and keep the Kremlin off his back... He [Abramovich] started in the game as Yeltsin's bagman and lived through the last Russian default (1998) do you think he doesn't know how to move money? What century are you living in? He's laundered most of it through London a long time ago."

 

He's a Spurs fan so we have to forgive him what he does for he knows not what he says...

 

He made a very interesting point that the collapse in the rouble isn't all about Russia, it's much bigger than that. Russia is a double whammy as its susceptible to sanctions as well as the collapse in the oil price. The example he gave me was Saudi Arabia's stock market that has suffered a twenty per cent hit recently. This could hit the Qataris too eventually.

 

FFP is almost an irrelevance considering the amount of money in play. He pointed me here, amongst other places, and I think it's a good read: http://weaintgotnohistory.sbnation.com/2014/11/13/7214597/chelsea-finances-future-ffp-fair-play

 

He went on to mention some stuff I find very interesting but probably isn't relevant here, though I'm more than happy to post if you like.

 

TL;DR (and I don't blame you): Will it effect Abramovich's ability to fund Chelsea? Short term: no chance. Longer term, unlikely but who the f**k knows?

Edited December 17, 201411 yr by worstkid

Well if FFP is to be properly enforced, I fail to see how this would additionally impact the club other than youth/stadium investments which I think the club would be able to secure funding through external means, such as issuing debt though I doubt Roman would issue equity unless he is selling the whole kit and kaboodle which, despite the fantasy's of other sets of supporters, really doesnt look likely in the near future and even if it did, it would have to be another multi-billionaire with an urge to splash who can afford CFC and not some barely liquid millionaire who would see us spiral down the divisions. Dont forget that we have, over the last half decade or so, had the second best revenue generation in the BPL behind Man U. In that context, its not unrealistic to expect that even if Roman walked and we saw no more external investment into the team, we would be cemented as a team fighting for CL spots for the foreseeale future and not immediately return to the yo-yo status we commonly experienced before Roman.

Baring the unforeseen, Roman has ensured that the darkest days of this club are in the rear view mirror even if he went bankrupt today.

On another note, these are great times to invest for the wealthy(or the savvy). My major concern, were I to have one, is that Roman will be investing so heavily that he has little liquidity to dedicate to the club. Yet again, under FFP, he cant pour out his coffers even if he wants to so whether he can becomes nearly redundant.

I doubt very much Roman holds any roubles. The writing on the wall with the Rouble was long before the sanctions and oil futures dropping worldwide. I would think he fled the Rouble after the debacle in Cyprus. Only the Chinese recently agreed with Russia over a currency swap and that surely is biting them in the ass now. They both want the US dollar off the standard but that will never happen. I am sure the currency exchange was inline with the massive gas deal China swindled.

I may be wrong and Roman made have made a huge miscalculation but I doubt that. I sit here in the US trading futures and derivatives for a living and I saw the writing on the wall. I am sure Roman and his many and more educated advisors have seen the same. Many reasons why the Saudi led OPEC has kept up production. one being they see the US no longer importing their oil so they want to find others to export their oil to. Russia was a threat with China, Korea, and Japan. They and the other main OPEC nations (Qatar, USA, Kuwait) are willing to maintain production at cheap prices to maintain markets share.

Personally I am more worried over a global economical slowdown (as the price of oil, inflation on EM's, and macroeconomic data than Roman losing his money.

What businesses does Roman own nowadays?

what business doesn't he own? :p

I am not 100%, but I think he is mostly in renewable energy, emerging tech companies and telecommunications

http://www.theguardian.com/football/2014/dec/18/alisher-usmanov-arsenal-roman-abramovich-chelsea-ruble-russia

clearly those figures are projected from their business interests because it goes on to say the top how ever many only lost $10M of actual worth.

 

This wont effect roman at all, like people have said hes too rich too powerful and too clever to get caught up in all russias bs

If money is being lost at that rate, then I wouldnt be so sure just yet.

But if it's share values of a company then its only lost money if he sells those shares, right?

But if it's share values of a company then its only lost money if he sells those shares, right?

Shares are highly liquid assets, if those drop in value it's as good as losing cash.

Shares are highly liquid assets, if those drop in value it's as good as losing cash.

Hmm not really. Warren Buffett would say you only get permanent capital destruction when you sell at a loss.

Technically, according to accouting principles, when you record the gain/losst depends wether the shares were bought as a strategic investment or as a trading investment.  Strategic assets would be determine gain/loss when the stocks are sold, trading carries their market value though I think firms only have a legal obligation to correct valuation when doing their annual financial reports.

Shares are highly liquid assets, if those drop in value it's as good as losing cash.

Not necessarily true. If the $450M loss the article suggest has not been realized than its merely a decrease in his portfolio's valuation. He has to sell off to truly capture a loss. No way oil will stay this low for an extended period of time and the Rouble will rebound regardless of sanctions. It may not bounce back entirely but it surely will retrace it's decline in a significant way. Also what the article fails to recognize is Roman's other assets. Surely he is well diversified with USD derived investments and those are only getting stronger along with the dollar. I find it funny that other clubs supporters mock Roman about him losing his money, as if all of his fortune is in oil. Oil may have jump-started his empire but I am willing to wage it is now less than half.

Like I said before, he is shrewd and has an army of intelligent people surrounding him. No doubt his oil stake is hedged with futures contracts and as for his other investments, I am sure they too are well protected. One doesn't have a net worth North of $10B by accident.