Roman Abramovich: The financial engineer who changed the face of world football

Peter Kenyon moved from Manchester United to Chelsea and helped the club to formulate a profitable economic model

Chelsea – The brand

The quintessential need for success set by Roman had a rationale which was two-fold.

Firstly, for any company to hire the best talent pool, it has to offer the best provisions and opportunities of the highest grade. On similar lines, Chelsea had to compete regularly at the highest level to lure the best players and keep hold of the ones already at the club.

Secondly, unlike the other giants of European football, Chelsea was not a global brand in the initial years of Roman era. This, combined with the fact that Stamford Bridge was not even among the 30 biggest stadiums in the country, made it impossible to compete with the revenues of Chelsea’s competitors. Common sense would suggest that no owner would want to see the account books forever in red.

When Roman bought the club, the rules and economy of the football market constituted uncharted territory for him. As any business man would (should) do, he hired the best professionals and had some of the most experienced men from the sport as his advisors.

He understood the game through the words of Piet de Visser – a manager and a scout credited with discovering the likes of Ronaldo when at PSV – and ex-Chelsea player Bobby Campbell.

Roman acquainted himself to the club and the harsh realities of the transfer market through super-agent Pini Zahavi, and gradually assimilated his key personnel like Eugene Tenenbaum, Bruce Buck, German Tkachenko and some others.

His financial muscle and the management team prudently put together placed Chelsea in the hands of the most experienced and talented professionals from US and Europe.

Right at the outset Roman was aware of the brand building required to turn Chelsea into a big-name club. Soon, he hired Peter Kenyon to expand Chelsea’s commercial horizons. Peter Kenyon served as the chief executive of Manchester United, where he, alongside finance man David Gill, transformed United’s global reach with a stable financial structure. Peter was also accustomed to high profile transfers which were the sign of things to come at Chelsea.

Chelsea were among the first clubs to touch new arenas for marketing football, such as Asia, Africa and USA. As a reward for the rightly planned and executed strategies, Chelsea now had a dedicated fan following from different corners of the world like Malaysia, Russia, Nigeria, Ivory Coast and USA.

Within ten years, the management at Chelsea has reportedly taken the club from a following of a few millions to upwards of 90 million. In 2004, Chelsea had their first pre-season tour to USA after many years, and the first of many to follow. Only a few thousands attended those matches.

Ten years hence, the friendly match between Chelsea and Manchester City at the NY Yankee stadium was a near sell-out. The club’s revenue has increased from 134m Euros to 322m Euros. The commercial revenue has seen close to 90% jump from 47m Euros to 89m Euros.

A deal with Umbro was broken five years before the end of the contract, only for the club to strike a deal worth a whopping £100m with Adidas in 2006.

The club took a flight from a £6m-per-year deal with Fly Emirates to around £16m-per-year with Samsung in 2013.

Chelsea has overtaken Arsenal in terms of revenue generated despite Arsenal having around 15,000 seats more than Chelsea to sell per match day. Alliances are ventured in different verticals of business, such as deals with Sauber, Gasprom, Delta, Audi and Singha. In just 10 years, Chelsea FC is no longer just a football club, but a worldwide brand.

Another vision of Roman was to eventually turn Chelsea into a self-sustaining model, a model in which steady success would be achieved by players produced by the club itself, thus maintaining the identity of the club. Roman wanted Chelsea to follow the footprints of Barcelona and create his own version of La Masia.

Chelsea’s academy had already provided the captain for the Roman Era – John Terry. But as soon as Roman took over, the academy, which had produced the likes of Carlton Cole, Robert Huth, John Terry, Graeme Le Saux and many first team players before, found itself miles below the quality required to be in the first team.

The gap was duly noted by Jose Mourinho, and acting on his advice, Roman decided to invest heavily into the academy. Millions were spent to create world-class training facilities at the academy to entice the wonder-kids from around the world into joining Chelsea.

Millions were spent on coaches to manage the academy.The academy was expected to start rolling out at least one player per year for the first team in ten years. By 2013, the biggest leagues in European football are populated by a plethora of current and ex-Chelsea academy players.

Over the years, people have claimed that Roman treats the club as a business and not as a football club. Well, sometimes I am thankful for that, because a true business man would never run away from the entity in times of troubles and secondly, he would do everything in his reach to achieve success.

Obviously, the world of football gradually introduced restrictions like FFP rules, so that owners like Roman do not cross practical limits. Roman promptly supported the restrictions, with prevention of further such Roman-like stories reportedly his ulterior motive behind his decision to support the FFP.

As opposed to what the media has always suggested though, Roman has tried his best to balance the business and emotional sides of this football club. He turned all the debt that the club owed him into equity. Which means that if tomorrow someone buys all of Roman’s shares, he would have bought a totally debt-free Chelsea FC. Roman has spent nearly £2 billion in a span of 10 years on this club, which is roughly 10% of his entire wealth at its peak.

For some seasons, even the ticket prices were frozen despite the economic crises. He has set the tone for billionaires from around the world to invest in England, and for more and more clubs to dream of success and trophies.

Because of its competitive nature now, the EPL is the most watched league in the world. For the same reason it has been able to earn for itself a £3bn contract for television rights. Even without Roman, European football was always drifting towards success-through-debt, following the likes of Real Madrid and Inter Milan. But by ‘spoiling’ the club and the football world in his own different style, Roman has, in some ways, protected football by preparing it for the eventualities and side-effects of the modern world economics.

As the Academy team coach Arnesen said recently:

“He enjoys very much to go to the FA Youth Cup – he’d go to the quarter-finals, the semi-finals and the finals. He was always there and would always congratulate us and the staff. He was very, very aware about those things and never forgot it. That is something people maybe don’t know, but for me that showed he has a big heart for the club.”

I do not know what an owner can possibly do more than all the things mentioned to demand respect from the footballing world. All that matters to Roman is Chelsea, as he’s been silently driving the club to glory.