Sponsorship in Russian football and the looming crisis

Every week it seems a new pronouncement is handed down from the Kremlin or some loony faction in the parliament (Duma).

At a Federal level it is closer to a bunch of monkeys with time on their hands pressing buttons and throwing papers around than any actual forum for discussion and advancement.

Sure the Dail is as bad, Westminster cannot be claimed much better and the shenanigans in DC would put a circus to shame. However one recent pronouncement, given the green light by VVP, could destroy Russian sports and especially football within the year.

Sponsorship by energy companies of sports clubs is soon to be outlawed.

 

It is unclear as to exactly how it will work, though last week I managed to get an evening with one sports lawyer in Moscow who explained that from the outline plan the following will happen. Russian energy companies (from oil and gas to electricity networks) will not be allowed to sponsor sports clubs.

This ban will be nation and world wide. The law, currently being prepared, is supposed to be rushed through parliament for early Autumn. Any existing sponsorship contracts will have to be ended once the law is in force.

Given that only last November there were moves put in place to ban state monopolies from buying foreign players – this would include Mutko’s old club, Zenit, and would particularly cripple Lokomotiv Moscow.

While all clubs are state-funded (bar FC Krasnodar), sponsorship by those same companies was always seen as inviolable – soon it will be no longer.

Sponsorship is a tricky concept in Eastern Europe. I was surprised, for example, to find out in Croatia that “sponsor girls” were not those models who stand holding numbers at Formula 1 starts, instead sponsorship of a girl was more the domain of wealthy businessmen or gangsters.

These gentlemen made sure that the girls had an apartment, an expense account and a salary, of sorts. The former Irish Consul to Croatia laid it bare for me and I realised that sponsorship means ownership in Eastern Europe.

So where are we now? Russian energy companies will not be allowed to own or sponsor teams as an austerity measure. 2 years out from the World Cup it is patently ludicrous, unless they’re going all Spartan on us.

What odds that some ludraman in the Russian government watched “300” and figured – “If a bunch of Greeks can beat the Persian Empire after living like spartans, our boys will do the same and win the World Cup.”

Except, Igor, that’s not what happened. The child abusing, slave murdering, baby killing bunch of man-loving psychos from down south LOST!

And the pampered Russian stars who reap the fruits of energy company sponsorship (when they’re paid) are not going to suddenly go all Gerald Butler and wade into Spain, Ireland, Brazil or Burkina Faso wearing nothing but a leather thong and snarl – they’ll wimp, whinge and hide, putting in even less effort than normal while looking for a transfer to Kazakhstan.

Even if state-owned clubs are prevented from spending “hard currency” on foreign players so that the abundant Russian talent (yes, that’s sarcasm) can shine, this is not going to hit as hard and as deep – Europe-wide – as when energy companies are reigned in.

Let’s just have a short look at who is going to lose out in the Premier League alone (current league position in brackets):

(6) Zenit St. Petersburg – Gazprom (owner and chief sponsor)
(1) CSKA Moscow – Rossetti (main sponsor)
(2) FC Rostov – Energobyt Rostovenergo
(9) Rubin Kazan – TAIF-NK
(4) Spartak Moscow – Lukoil (owner and chief sponsor)

Outside of Russia bang will go Red Star Belgrade (especially when they no longer get handy cash for young players, in trouble will be Schalke 04 and Chelsea will be miffed. And these are only 3 of Gazprom’s highest profile foreign clubs, inside Russia it will be devastating in all professional leagues.

 

Of course other sports will suffer greatly, most notably ice hockey and KHL, which relies almost solely on Gazprom’s largesse. At a time when clubs in the 2nd tier of Russian hockey are crippled with debts, including my own Buran Voronezh, this idiocy from our lawmakers drives another nail into the coffin of Russian sports.

Yet through it all there remains some hope. A couple of weeks ago I met with my good friend Sergey Kuzmin from Ulyanovsk. We battled together for many years and his elevation to the top level of Russian sport was evidence that good will shine through.

We discussed football finances, especially sponsorship. His club, FC Volga Ulyanovsk, have one of the smallest budgets in the 2nd Division yet they ensure players and staff are paid and work hard to keep finances stable. They are very much a community club and a good news story in Russia, so what if sponsorship controls are put in place? “We’d survive in the First Division and even make the Premier League,” he said.

If clubs are forced to look at their own player development structures and get even closer to the community, different and dormant sponsorship channels are possible. It could mean a complete restructuring of Russian football and see the standard of player rise to a point where they are attractive to big league clubs.

Players will not be willing to struggle at home on small salaries and instead aspire to push themselves to higher levels. Quality foreign players like CSKA’s Ahmed Musa would disappear, though cheap talent can always be brought in and sold on.

And then I stop dreaming. It won’t happen. There will be a loophole, energy companies will continue to meander money through sports clubs and make sure they reduce their taxable income.

Sponsorship deals won’t die because a few lawmakers get a notion. It won’t be until other, more efficient ways of moving money are discovered, or until the head honchos fall for another pastime, that it will change. And it’s already started, with the biggest of them all.

Last week Zenit inked a deal with Heineken to become partners. Keep in mind that alcohol advertising in sports has been banned here for three years and big breweries are really struggling, especially St. Petersburg’s own Baltika.

The resurgence of local mini/micro-breweries in Russia that have gained shelf space in leading retail and off-licence chains have gotten the locals back into a proper love affair with better quality beer. Not the water and alcohol with chemicals mass produced and masquerading as beer.

With no ads allowed in print or on TV, football is the route back to more profit.

Just as one door for sponsorship threatens to close, the lobby group for alcohol race in to the gap. The dream of self-sufficient, revenue generating and community linked Russian clubs has to wait a little longer.