Ukraine war-Day 16: Telco cuts Chelsea FC kit sponsorship, as Russia threatens to nationalise Western firms exiting country

Mobile phone company, Three, Thursday, suspended its sponsorship of Chelsea and asked the club to remove the logo from their shirts with immediate effect.

The news came after Chelsea’s owner, Roman Abramovich, was placed under sanctions by the UK government for being “associated with a person who is or has been involved in destabilising Ukraine and and undermining and threatening the territorial integrity, sovereignty and independence of Ukraine, namely Vladimir Putin, with whom Abramovich has had a close relationship for decades”.

Three said in a statement on Thursday afternoon: “In light of the government’s recently announced sanctions, we have requested Chelsea Football Club temporarily suspend our sponsorship of the club, including the removal of our brand from shirts and around the stadium until further notice.”

The club has been granted a special licence that will allow them to fulfil their fixtures. Broadcast and prize money will be frozen and the licence is limited to “football-related activity”, leading to the ban on signing players and new contracts – and other commercial restrictions. It means Abramovich will need approval from the UK government before selling the Stamford Bridge club.

Three added: “We recognise that this decision will impact the many Chelsea fans who follow their team passionately. However, we feel that given the circumstances, and the government sanction that is in place, it is the right thing to do.”

It is believed that the Three deal was worth around £40m a year to Chelsea and another sponsor, the shirt sleeve sponsor, Hyundai, said it was looking into their deal with the club.

“Hyundai has become one of the strongest partners in football over the years and the company supports the sport to be a force for good.

“We are currently assessing the situation with Chelsea,” the car manufacturer said in a statement.

The Hyundai deal is reportedly worth £10m a year.

Nike, which agreed a 15-year-deal worth £900m to provide Chelsea’s kit in 2016, said it was not commenting on the day’s Abramovich news, or where it might leave the deal.

Meanwhile, Russia, Thursday,  said it could seize the assets of Western companies that have suspended operations in the country.

Dozens of American, European and Japanese companies from almost every sector of the economy have abandoned joint ventures, factories, stores and offices in the last two weeks in response to Russia’s invasion of Ukraine and the ensuring sanctions.

The sanctions have hit most of Russia’s financial sector, including its central bank, trashed the Russian currency and are likely to trigger a sovereign debt default and deep recession. And there may be more to come: US Treasury Secretary Janet Yellen said Thursday that Russia’s economy will be “devastated” as a consequence of existing Western sanctions, “but we … continue to consider further steps we can take.”

President Vladimir Putin had promised a response.

Speaking Thursday at a meeting with government officials, he backed a plan to introduce “external management” of foreign companies leaving Russia.

“We need to act decisively with those [companies] who are going to close their production,” Putin said according to a video posted by the Kremlin and aired on state media. “It is necessary, then … to introduce external management and then transfer these enterprises to those who want to work,” he added.

The exodus of companies includes iconic consumer and tech brands such as McDonalds, Coca-Cola and Apple, as well as leading Big Oil groups such as BP and Shell. They were joined Thursday by Goldman Sachs, the first major bank since the war started to say it was winding down its activities in the country entirely. Other banks are likely to follow, leaving billions in outstanding debts behind them.

Russia’s consumer rights organization has drawn up a list of companies that have decided to leave and could be nationalized, according to a report in Russian newspaper Izvestiya later cited by state news agency TASS.

The document that was reportedly sent to the Russian government and the Prosecutor General’s Office, includes 59 companies, including Volkswagen, Apple, IKEA, IBM, Porsche, Toyota, H&M and can be updated with more brands, Izvestiya said.

The Russian government earlier Thursday issued a list of goods and equipment previously imported Russia that companies would be banned from transferring out of the country.

According to a statement published on the government’s website, the list includes over 200 items, including “technological, telecommunications, medical equipment, vehicles, agricultural machinery, electrical equipment” as well as “railway cars and locomotives, containers, turbines, metal and stone processing machines, monitors, projectors, consoles and panels.”

Those restrictions will remain in effect until the end of 2022.