[Archived] Roman's Ruin?

[doctorryan]

Report from NBC in US on Russia's billionaires

[philipl]

Report from NBC in US on Russia's billionaires

Abramovich will be down a few billion and Chelsea will no longer be in the category of "fun money" paid for by interest on the interest but Chelsea's owner is not in trouble.

The Russians who are in trouble are the ones who borrowed- particularly to finance business expansions within Russia. The war in Georgia plus the squeeze on BP completely spooked western investors in Russia BEFORE the credit crunch so the guys who have loans to refinance are effectively being reversed out of their businesses by the Kremlin now.

Abramovich has the advantage of having exited with cash and diversified his portfolio and risks long before all this blew up.

The collapse in oil and commodity prices though could well mean the queue of billionaires waiting to buy Prem football clubs will have already shortened dramatically and the price of clubs will be dropping faster than Mike Ashley can down a pint.

[CrazyIvan]

That article says Abramovich has lost about $20 billion in paper value of his holdings. How much was he worth and how much is he worth now?

[philipl]

That article says Abramovich has lost about $20 billion in paper value of his holdings. How much was he worth and how much is he worth now?

The answers are a huge amount and a huge amount.

The issue for his interest in Chelsea is how his cash flows are affected. If dividends and interest rates collapse then he might ease back.

But these things are relative- the halving in the price of oil since ADUG first got interested in Man City doesn't mean that all their massive investment projects have halved in cost and it jas not been unknown for the Saudis and the Gulf to suddenly reign back all their spending in the face of oil prices falling- in the short term it seems likely they will cut production and the price stay relatively low giving them a double whammy. Whilst Abramovich is poorer, so are all the other super rich people who are current and potential owners of football clubs. Abramovich might have less to spend on Chelsea but the same will go for all the other owners and their clubs.

And unlike the Icelanders at West Ham and possibly the owners of Pompey and Newcastle, Abramovic is hardly facing wipe-out.

[doctorryan]

Nothing like a facetious topic title.

Still, as I'm sure our man in Malta would attest, it is a subject worthy of discussion.