Abramovich by Hutchins Chris Midgley Dominic & Chris Hutchins

Author:Hutchins, Chris, Midgley, Dominic & Chris Hutchins [Midgely, Dominic]
Language: eng
Format: epub
ISBN: 9780957020764
Publisher: BookBaby

CHAPTER TEN

MISTER CHELSKI

In late June 2003, Ken Bates was a worried man. With his banks expecting him to make a loan repayment of £23 million in a matter of days, the chairman of Chelsea Football Club was facing a financial crisis. He had bought the club for £1 in 1982 after agreeing to take on its debt and had carefully nursed it back to health. In 1996, it was fit enough to be floated on the Alternative Investment Market (AIM) and Bates added millions to his growing fortune. Then hubris took over. In order to buy the freehold of Chelsea's ground, Stamford Bridge, and fund his vision of an entertainment complex complete with hotels, restaurants and health club alongside it, Bates took out a Eurobond for £75 million at what was to become a punitive interest rate of nine per cent.

He did indeed build two hotels, Chelsea Village and the Court, two restaurants, Fishnets and Arkles, and a health club, World of Sport. But the project looked misconceived from the start. While Stamford Bridge lies in a fashionable part of west London, it is close to neither an airport nor the West End and on match days the bars are packed with football fans rather than tourists and businessmen. As a result, the hotels were always going to have trouble filling their rooms and rates have been forced down over the last few years to around £100. Meanwhile, the restaurants failed to attract enough custom on days when no match was being played and the health club faced fierce competition from other gyms in the area, such as the David Lloyd Fitness Centre and Holmes Place.

Bates's other speculative money-spinner was proving no more successful. Trade in the Millennium suites built into the West Stand was sluggish to say the least. Ten-year leases on these corporate boxes, which could seat twenty-four people apiece, were initially offered for £10 million. Sky Television, which in addition to having the rights to screen Premiership football was a shareholder in Chelsea, took one of the suites, as did club sponsors Umbro and Siemens. Other customers proved elusive, however, and again Bates was forced to cut his rates and offer shorter leases. The price fell from £1 million a year to £650,000. It's not hard to see why companies were unwilling to pay the asking price. Even at £650,000 a year, the rate per head per home league game works out at around £1,400, a high price even by corporate hospitality standards. The same group of people could lunch magnificently at Claridges for £200 each.

These financial pressures were not helped by a wage bill of £1.5 million a week and a number of eccentric transfer deals. Take the case of Winston Bogarde. Bought in August 2000, just two weeks before manager Gianluca Vialli left the club, Bogarde - who earned £40,000 a week - played in just four games under Vialli's replacement, Claudio Ranieri. By the time his contract ran out at the end of the 2003/04 season, Bogarde alone had cost £7.

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