Good Bad Billionaire: Roman Abramovich – Premier League Oligarch

Episode Release Date: November 11, 2024
Hosts: Simon Jack (BBC Business Editor) & Zing Tsjeng (Journalist)

Introduction

In this gripping episode of Good Bad Billionaire from the BBC World Service, hosts Simon Jack and Zing Tsjeng explore the multifaceted life of Roman Abramovich, one of Russia’s most prominent and controversial oligarchs. With a staggering net worth of $9.7 billion, Abramovich's journey from humble beginnings to billionaire status is a tale intertwined with power, politics, and luxury.

Early Life and Rise to Wealth

Orphaned Beginnings
Roman Abramovich was born in 1966 in Saratov, then part of the Soviet Union. Tragically orphaned at the age of three, he was adopted by his paternal uncle Leeb, moving over a thousand miles north to live with him. Despite the hardships, including living frugally by reselling goods on the black market, Abramovich exhibited an entrepreneurial spirit from a young age. By eight, he was already a popular figure in his neighborhood for owning a Western-style cassette player, a rarity in Soviet Russia (Transcript: [05:06]).

Entrepreneurial Ventures
After leaving school at 17 to study highway engineering, Abramovich was drafted into the Red Army. Even there, his knack for business shone through as he orchestrated a fuel siphoning scheme, selling fuel at reduced prices to make a profit (Transcript: [07:14]). Upon leaving the army at 20, he worked as a mechanic in Moscow before dropping out of his studies to pursue various business endeavors during Russia's chaotic transition from communism to capitalism.

Relationship with Boris Berezhovsky

Mentorship and Influence
A significant turning point in Abramovich's rise was his relationship with Boris Berezhovsky, a powerful oligarch and close associate of President Boris Yeltsin. Introduced in 1994 at a Caribbean yacht party (Transcript: [13:32]), Berezhovsky became Abramovich's mentor, facilitating his acquisition of the oil company Sibneft. Abramovich later revealed in court that he paid Berezhovsky between $50-80 million annually to secure political patronage and influence (Transcript: [16:51]-[17:16]).

Sibneft Acquisition
With Berezhovsky's backing, Abramovich purchased 88% of Sibneft for approximately $240 million, funding the deal largely through bank loans (Transcript: [18:34]). Under his leadership, Sibneft transformed from a loss-making entity into a profitable powerhouse, generating around $40 million annually by the mid-1990s (Transcript: [12:47]-[13:07]).

Diversification into Aluminum

The Aluminum Wars
Seeking to consolidate his wealth, Abramovich ventured into Russia’s aluminum industry, a sector mired in violence and competition known as the "aluminum wars." Initially reluctant due to the high levels of organized crime violence, he eventually merged with Oleg Deripaska to form Rusal, one of the world’s largest aluminum producers (Transcript: [19:45]-[21:12]).

Establishing Rusal
This strategic merger not only minimized competition but also ended much of the associated violence. By controlling 75% of Russia's aluminum output, Rusal became a global industrial titan, solidifying Abramovich’s position as a leading oligarch.

Political Connections and Governorship

Rise of Vladimir Putin
With Vladimir Putin’s ascent to power in 2000, Abramovich solidified his political ties, becoming an influential figure within the Kremlin. Introduced in late 1990s and attending Putin's birthday party in 1999 (Transcript: [22:23]-[22:56]), Abramovich was appointed governor of Chukotka, a resource-rich region in Russia's Arctic Far East (Transcript: [22:53]-[23:16]).

Governor of Chukotka
During his governorship, Abramovich invested over $1 billion in regional development, significantly improving living standards and ensuring political immunity from monopoly investigations. His tenure in Chukotka not only bolstered his philanthropic image but also reinforced his indispensable status within Russia’s elite.

Acquisition and Sale of Chelsea FC

Purchase of Chelsea
In 2003, Abramovich made headlines by purchasing Chelsea Football Club for approximately $233 million, marking the largest takeover in British football history at the time (Transcript: [26:04]). His investment transformed Chelsea into a globally competitive team, attracting top talent and securing multiple Premier League and Champions League titles (Transcript: [26:50]-[27:40]).

Impact and Legacy
Abramovich’s ownership set a precedent for wealthy foreign investors acquiring European football clubs, thereby elevating the sport’s global appeal and financial stature. This trend led to increased foreign investment in British football, with other oligarchs following suit (Transcript: [27:40]-[28:16]).

Forced Sale Due to Sanctions
Following Russia's invasion of Ukraine in 2022, Abramovich faced intense scrutiny and sanctions from the EU and UK. In 2020, amid tightening regulations and asset freezes, he was compelled to sell Chelsea for nearly $5 billion to Todd Boehly's consortium. Though he owned the club for less than two decades, Abramovich didn’t personally benefit from the sale proceeds due to government-imposed restrictions (Transcript: [31:09]-[31:46]).

Sanctions and Recent Developments

Asset Freezes and Residency Changes
In response to Russia's geopolitical maneuvers, Abramovich's assets were frozen by the British Crown Dependency of Jersey, leading him to renounce his British investor visa in 2018 and acquire Israeli and later Portuguese citizenship (Transcript: [29:40]-[30:10]).

Suspected Poisoning
In 2023, while participating in peace talks between Russia and Ukraine, Abramovich, along with two Ukrainian negotiators, experienced symptoms of suspected poisoning. Chemical weapons experts concluded it was likely an intentional use of a chemical agent, raising suspicions of involvement by Russia’s military intelligence (Transcript: [32:16]-[33:19]).

Current Status
Despite the sanctions, Abramovich remains a wealthy figure with a net worth of nearly $10 billion, though his power and influence appear to be waning amid shifting political tides and ongoing investigations into his financial dealings (Transcript: [32:24]-[33:07]).

Scoring and Evaluation

1. Absolute Wealth

• Simon Jack: 8/10
• Zing Tsjeng: 9/10
  Abramovich's substantial wealth places him high among global billionaires, although not at the very pinnacle.

2. Rags to Riches

• Simon Jack: 8/10
• Zing Tsjeng: 8/10
  From an orphaned child to a billionaire, Abramovich's rise exemplifies the classic rags-to-riches narrative, especially in the challenging context of post-Soviet Russia.

3. Villainy

• Simon Jack: 7/10
• Zing Tsjeng: 8/10
  Despite no convictions, allegations of corruption, connections to Putin, and his role in the turbulent privatization era contribute to a dubious reputation.

4. Philanthropy

• Simon Jack: 6/10
• Zing Tsjeng: 6/10
  Abramovich has made significant charitable contributions, notably $500 million to Jewish causes and $1 billion to Chukotka. However, the motivations and sincerity of these acts are often questioned.

5. Power

• Simon Jack: 4/10
• Zing Tsjeng: 5/10
  While influential within Russian and UK circles, Abramovich's power is heavily reliant on his Kremlin connections and appears to diminish under current geopolitical pressures.

6. Legacy

• Simon Jack: 7/10
• Zing Tsjeng: 8/10
  Abramovich’s legacy is twofold: revolutionizing football club ownership and significantly impacting regional development in Chukotka. However, his controversial business practices temper his legacy.

Final Verdict: Bad Billionaire

Despite his philanthropic efforts and significant achievements, Abramovich's deep entanglement with political corruption, his opportunistic accumulation of wealth during a tumultuous era, and his controversial actions overshadow his positive contributions. Simon Jack and Zing Tsjeng ultimately categorize Roman Abramovich as a "Bad Billionaire," highlighting the ethical complexities surrounding his empire.

Conclusion

Roman Abramovich's life encapsulates the volatile intersection of wealth, power, and politics in post-Soviet Russia. From his strategic business maneuvers in the oil and aluminum sectors to his flamboyant ownership of Chelsea FC, Abramovich's journey reflects both the opportunities and dangers inherent in the oligarchic rise. This episode leaves listeners contemplating the moral implications of such vast fortunes and the true nature of Abramovich's impact on global capitalism.

Next Episode Preview: The hosts tease their upcoming discussion on Carlos Slim, the richest man in Latin America, promising another deep dive into the life of a prominent billionaire.

Notable Quotes:

• Zing Tsjeng: "Roman Abramovich threw himself into work, so much so that Olga said it was a reason for their divorce." [Transcript: [08:03]]

• Simon Jack: "It was romantic. Abramovich." [Transcript: [01:27]]

• Zing Tsjeng: "A yacht with its own missile detection system and escape submarine. I mean, come on, that gets you pretty high in a billionaire stakes." [Transcript: [34:43]]

• Simon Jack: "I'm so sorry, because you did great things for Chelsea, but you are a bad billionaire." [Transcript: [40:35]]

Good Bad Billionaire is produced by Hannah Hufford and Louise Morris, with additional production support from Tamsin Curry. Edited by James Cook, the podcast is a BBC Studios production for BBC World Service. New episodes are released every Monday.