From Bloomberg Businessweek, September 24:
Has Anyone Seen Roman Abramovich? The Last Days of Londongrad
The Russian billionaire has avoided Britain for months and is preparing his finances to skirt the threat of American sanctions.
Has Anyone Seen Roman Abramovich? The Last Days of Londongrad
The Russian billionaire has avoided Britain for months and is preparing his finances to skirt the threat of American sanctions.
In late August, as supporters of Chelsea Football Club assembled at Stamford Bridge stadium to watch their team beat London rival Arsenal, a group in the upper deck unfurled a 40-foot blue-and-red banner. “The Roman Empire,” it shouted, beside an image of the team’s owner, Russian billionaire Roman Abramovich. Just below, another banner trumpeted “15 Years, 15 Trophies.” Abramovich didn’t attend the game that day. In fact, he hasn’t been seen in London since the U.K. government failed to renew his visa in the spring, not long after it accused Russia of using a deadly nerve agent on British soil and relations between London and Moscow plunged into crisis.
Abramovich bought Chelsea out of near-bankruptcy in 2003 for £140 million (about $223 million at the time) and has since loaned the club more than £1.1 billion. Until he came along, Chelsea hadn’t won the top domestic trophy, the Premier League title, since 1955. His big spending changed all that and set off a kind of arms race in English football. In some ways, it was similar to the U.S. model: Buy talent, buy titles, and sell merchandise and media rights. But unlike owners of American sports teams, Abramovich didn’t seem bothered by racking up huge losses. (And he didn’t have to contend with caps on spending, until new rules came into force in 2010.) At the Arsenal game, Chelsea supporters taunted their rivals with the chant “We’ve won it all!” to which Arsenal fans sang in response, “You’ve bought it all!”
Chelsea fans still love their high-rolling owner, even as the U.K. government hits back at the Kremlin. Now Abramovich is mulling a sale of Chelsea, frustrated by his British visa problems and concerned about the potential fallout should the U.S. expand sanctions against wealthy Russians and target him. He’s already rejected bids for the club in excess of $2.3 billion—which would be a world-record price for a sports team—according to people familiar with the talks. Earlier this year, Abramovich hired Raine Group LLC, a merchant bank in New York, to advise on the possibility of a full or partial sale of the club. A person familiar with the discussions says Abramovich wants £3 billion. Abramovich’s representatives declined multiple requests for comment for this story and insisted all communication go through his lawyers, who also declined to comment.
With a $14.7 billion fortune derived from oil and metals, Abramovich holds his enormous wealth at the pleasure of Russian President Vladimir Putin, a status that’s put him in the crossfire of the Cold War 2.0 that’s been brewing. It’s not only his visa that’s been effectively stonewalled: In seeking ways to punish Putin, British officials appear to be slow-walking most Russian visa applications, according to immigration lawyers in London. At the same time, the government is scrutinizing the wealth of Russians using London as their base, and lawmakers have begun calling the influx of Russian cash a national security issue.
“We should have been asking tougher questions, and we’ve started to do that over the last 12 months,” says Ben Wallace, the U.K.’s minister of state for security and economic crime. “We always reserve the right to revoke any of these visas. We have the power to simply say, ‘No, thank you. You’re not welcome.’ ”
Arguably the most secretive Russian billionaire, Abramovich hasn’t given an interview in more than a decade. “To be exact, it’s been 12.5 years!” his spokesman, John Mann, wrote in an email. Having bought homes in Aspen, Colo., the south of France, Moscow, New York, St. Barts, and Tel Aviv, Abramovich is almost constantly on one of his jets. Nonetheless, he’s the very avatar of Londongrad, the nickname given to the British capital because of the high number of wealthy Russians there. He paid a reported £90 million for a mansion a few doors down from the Russian embassy in Kensington. In almost a caricature of over-the-top Russian spending, he won permission in 2016 to expand it to 20,000 square feet, filling in what he called a “miserable” pool and adding a new underground pool and “staff accommodation.” He’s educated five of his seven kids largely in the U.K.
Abramovich’s situation has sent a chill through the ranks of wealthy Russians in London. “It’s like a grenade has been dropped inside the government, and no one knows what the outcome will be,” says Dmitry Gololobov, a Russian lawyer living in London who worked for Yukos Oil Co. “Everyone is minimizing their U.K. risk. No one knows how they will be scrutinized.”
Faced with delays, Abramovich withdrew his visa application. On May 28, his Gulfstream G650 touched down in Tel Aviv, where he owns a home in the exclusive Neve Tzedek neighborhood. A major donor to Jewish causes in Russia and a funder of more than a dozen Israeli tech startups and venture capital companies, Abramovich left two days later with an Israeli passport in hand, allowing him to travel to the U.K. for up to six months visa-free. (It’s unclear when he applied for citizenship.) The move immediately made him Israel’s richest man. The day after he left Israel, Chelsea announced it had put on hold a £1 billion plan to expand the club’s stadium, citing the “current unfavorable investment climate.”
“Abramovich spent money to buy himself a certain entree or cachet into British society, but some of the social expectations about being big in British football have not quite played out,” says Mark Galeotti, a Russia expert and senior fellow at the Institute of International Relations in Prague. “He’s high-profile and Kremlin-connected enough to be a useful poster child for this new campaign against Putin. He may decide it’s not worth it to stay.”...MUCH MORE
