Russia’s downturn and U.K. soccer
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The stock market story of today is the OMX Iceland 15 index. After being closed for the better part of last week as the Icelandic banking industry darn near went bust the index fell 70 at the open before bouncing back to close. Government officials are in Moscow today trying to nail down a five and half billion dollar loan to tide them over.
But Russia’s got its own problems. Some of that country’s richest men have lost a fortune over the past couple of weeks. The oligarchs, as they’re known, have gone from mega-billionaires to just well, just multi-billionaires. Not really cause for pity. Unless you’re a soccer fan in England.
From London, Marketplace’s Stephen Beard explains.
Stephen Beard: As we ordinary mortals survey the wreckage of our own finances, we do have one small consolation: the fun of totting up what Russia’s oligarchs have lost.
David Roberston: One estimate has put it at about $230 billion, which is obviously going to hurt even the richest men in the world.
David Roberston of the Times, has been monitoring the shrinking fortunes of men like Roman Abramovic who’s seen the shares in his steel company collapse.
Robertson: That has effectively wiped $20 billion off Roman Abramovic’s paper wealth.
Watching the oligarchs wealth evaporate isn’t just a spectator sport in Britain. In fact it involves the business of British sport. Roman Abramovic owns this English soccer club — Chelsea. And he’s not the only oligarch whose sunk a fortune into football.
Alex Fynn: Hundreds of millions of dollars have come from Russia into English football. English football will certainly be affected by what happens in Russia.
Sports analyst Alex Fynn. Russians now own two of the U.K.’s top soccer clubs outright: Chelsea and Portsmouth. And another oligarch has bought a major stake in one of the biggest and best-known clubs in the world–Arsenal.
Some of these Russians could now be forced to liquidate these trophy assets. Alex Fynn, however, says Abramovic will probably stick with Chelsea.
Fynn: It is most unlikely for someone who loves football so much and loves his club even more that he will cut and run unless he’s down to his last few billion dollars.
The Moscow stock market has recovered some poise. Abramovic has clawed back some of his $20 billion paper losses. But says Ariel Cohen, of the Heritage Foundation, all the oligarchs may well face a marginally less opulent future.
Ariel Cohen: They’ve made their fortunes primarily in oil, gas, metals and other raw materials. If the recession globally is protracted and severe they are not coming back anytime soon to the heights of wealth they experienced before.
That could mean slightly less conspicuous consumption as they play away from home and a little less Russian cash for English soccer to kick around.
In London, this is Stephen Beard for Marketplace.
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