From Perm to the Petrovskiy Ostrov: Club Ownership in Russia

RPL
The new RPL branding set to debote a “new era”? | Russian Football News

After an extraordinarily successful World Cup, Russia is settling down to what could be a new norm in terms of the status of the long-popular sport within the country. Behind the smiles, however, disregarded problems may be resurfacing and uncomfortable debates forcing their way through to bite the proverbial party balloons.

I believe its worth highlighting the two recent examples of club bankruptcy in Russia. First, Amkar Perm, owned by the Permsky krai, a very average Russian region economically-speaking, and not one particularly stressed fiscally, made the (not entirely dubious) choice to fund other sports and public sports amenities, rather than bankroll a struggling professional club.

Historically this is because (as we investigated in a?Round Table discussion on Reform earlier this year) Soviet-era clubs were integrated into broader, often-regionally concentrated societies, however such a structure has become largely incompatible with both modern sport and the modern Russian economy. Exposure to local government instability, together with a general lack of TV revenue, can prove detrimental to smaller clubs, and this is what seems to have killed off Amkar, who folded after a lack of cash in June.

Amkar’s Zvezda Stadium in Perm | Photo: Дима Шевченко

The second example is much more interesting. FC Tosno had somewhat of a whirlwind existence, starting from pretty much nothing in 2013 and having to fight for the right to play at the Petrovsky Stadium in St. Petersburg, assemble a team and operate without undue influence from their big neighbours then recently relocated to Krestovsky Island.

Last season was suitably erratic; the “woodsmen” (named so in jest at their fleeting and troubled life) made their RPL debut and, despite struggling with a generally substandard squad, managed several famous results, including a draw against the champions Spartak and a win against Lokomotiv. Pavel Pogrebnyak managed three goals in six appearances and Anton Zabolotnyy earned an international call-up for Russia. Things were not going great, but nothing seemed systemically wrong.

Tosno then managed only one win after the winter break and finished in 15th place, sealing relegation. This was contrasted however by a quite remarkable Russian Cup run that saw the St. Petersburg side reach the final and beat FC Avangard Kursk 2-1. All this was underpinned by player “strikes” and internal strife that culminated with the squad apparently writing to Vladimir Putin in order to help settle the financial situation.

Tosno players at the Petrovsky last season before the club folded | Photo: SovSport

Kommersant reports that the club had effectively drowned in debts exceeding €400 million after its founder and owner FORTGROUP slowly lost interest and eventually ceased all funding by the end of 2017. The fallout of the club not receiving a license to play in the FNL for 2018/19 included regional governor Alexandr Drosdenko promising fans that he wouldn’t let FC Tosno dissapear?and that he would find new investors.

This was achieved with the creation of FC Leningradets that (according to its website)?has a rather unique mix of investors including LCR Group, Piter Avto, Agriholding?Vyborgec, and several other construction companies, as well as the Leningrad Oblast. It is anyone’s guess as to whether this new venture will be more successful than the last, but such diversification may prove useful.

On top of this, evidence has emerged that FC Tosno’s owner FORTGROUP may have colluded with Gazprom over ditching VTB as a partner for a notable real-estate contract as well as forcing the VTB-funded Dinamo St. Petersburg out of the city. All of this from a club being praised as one of the success stories of privatisation merely a year prior to its insolvency.

It is unclear exactly what blanket privatisation would achieve, or even how a cohesive vision of this would be organised. It is of course easy to ridicule the various regional governments’ inadequacy at running clubs for the long-term, but surely some attention must be focused toward the Russian Football Union (headed by Vitaly Mutko, who was banned for life by the ICC and has had corruption allegations thrown his way) and the very nature of the Russian Federation’s mixed economy.

The failure of the Rotenbergs at Dinamo Moscow was highlighted brilliantly in a recent two-piece investigation by Vitaly Leonov. Even in June, when plans were unveiled for the historic Dinamo St. Petersburg to be renamed and moved to Sochi, many were keen to claim this as a victory; a ‘triumph’ for ‘serious’ privatisation. Yet the Financial Times were quick to point out that Mr Rotenberg’s investment carries clear hallmarks of the state.’

Oligarchic state involvement in the economy and the lack of coordination or general quality of the football authorities, ignoring corruption, is a serious problem for creating a suitable atmosphere for the positive development of the sport. Similarly, the distinction between a “private” and “state” endeavour is just as troublesome. The Rotenberg brothers are private investors, yet are seen to be close confidants of President Putin. Rubin Kazan’s new owners, the TAIF group, control substantial petrochemical holdings in the Republic of Tatarstan and have links to the region’s administration. Suleyman Kerimov‘s little adventure with Anzhi has lain waste to the club.? Where does, or should, the line necessarily cross?

The state of club ownership in 2017/18, before the two clubs folded | Russian Football News

What could possibly be done to improve the current state of Russian football, manage public engagement, improve continental competitiveness, and empower fans across the country? The answer may lie in somewhat replicating the remarkable success of FC Krasnodar. Sergey Galitsky’s, sometimes troubling but generally well-meaning determination to create a self-sufficient footballing superpower has proven mostly succesful as the club has come out of nowhere to challenge the hegemony of the Moscow-St. Petersburg clubs.

The so-called “Krasnodar Model” of community integration, massive investment in facilities and the academy in particular may be a path for emulation, but there are several clubs that are investing into youth development with different philosophies. Galitsky has obviously had to walk the delicate tight-rope of Russian state politics, and his heavy involvement in the club and, according to rumour, political pressure, forced him to sell his discount chain Magnit itself for a steep discount in a state-backed private equity deal to, ironically enough, VTB.

Another vital element for the sustainability of Russian football is creating membership structures that give fans a say in the running of essential club operations and help them succeed while being more financially independent and resilient, and this has been suggested on multiple occasions.

Additionally, there is a need for urgent reform in the FNL, where travel and other logistical costs are astronomical and clubs can be bullied by larger entities such as Gazprom.

Whatever reforms are chosen by associations, clubs and legislators (and they must be wide-reaching, meticulously planned and multi-faceted), it is likely to lead to the dissolution of many clubs and most likely a period of instability, but to be sure there can be no easy fix for a problem effectively embedded into Russian society.

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Author: Daniel Keighobadi

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