Abramovich losing millions because of oil

English Premier League giants Chelsea FC are enduring their worst season since Russian oligarch Roman Abramovich took over the club. But sitting in 14th place, just four points above the relegation zone, may not be the main thing troubling the billionaire right now. According to Britain’s The Telegraph, the record collapse in oil prices has reduced Abramovich’s wealth by about $820 million since the start of the year. The commodity’s price has hit a twelve-year low, with midday trading yesterday showing $28.97 per barrel (159 liters). Between 2011 and 2015, oil prices had averaged over $100 per barrel. Jaroslav Brychta, chief analyst at X-Trade Brokers, says this dramatic drop will also affect football. “When oil companies pour tens of millions a year into football, low oil prices will inevitably have some kind of impact on the sport,” Brychta told the Economic Daily.

Another Blow for Russia
The fall in oil prices will hit Russia particularly hard, as most of its football clubs are funded by companies involved in oil extraction, processing, and trade. Following EU sanctions against Russia and a constantly weakening ruble against the dollar, tumbling oil prices deliver yet another blow to the country’s economy. “It’s clear the country faces a very tough year. Their problems could also affect football in Western Europe,” said sports analyst and football agent Jozef Tokos, referring especially to the sponsorship activities of oil and gas giant Gazprom. The company is one of the biggest sponsors of the UEFA Champions League and German Bundesliga club Schalke 04. “In times of economic trouble, sponsorship expenses are among the first to be cut,” noted Finlord analyst Boris Tomciak. According to him, Gazprom and some Russian banks supporting European football might react similarly to Oleg Tinkov, owner of the cycling team for which Peter Sagan rides, who decided that 2016 would be the last year he finances his successful Tinkoff-Saxo squad. Moreover, Russia is set to host the next FIFA World Cup in 2018. Last year, organizers were already forced to cut the planned budget, and further reductions could follow if the Russian economy continues to decline.

Winners and Losers
On the other hand, cheap oil could have a positive side. “The main beneficiaries could be airlines, which are among the biggest shirt sponsors of Europe’s top clubs,” Tokos said, referring to Etihad Airways (Manchester City) and Fly Emirates, whose name appears on the kits of Real Madrid, Arsenal, and Paris Saint-Germain. Tokos also pointed out that lower oil prices leave more money in people’s pockets. “If I exaggerate a little, a positive effect could be higher attendance at football matches or more football tourism. More fans could afford to travel to watch their favorite clubs in England, Germany, or Spain,” Tokos added.