Russian clubs learn to live within their means
The summer soccer transfer window has ended. The world community has had time to see many impressive trades, including the most expensive transfer in the history of soccer: Welsh midfielder Gareth Bale now represents the colors of Madrid Real. His former employer, London’s Tottenham, has received € 100 million ($131.1 million) (the previous record belonged to Cristiano Ronaldo, at € 94 million/$123.3 million). Russian clubs have also strengthened their teams substantially. Moscow’s Dynamo has spent € 68 million ($89.4 million) on transfers, while Spartak has spent € 32 million ($42 million), and Lokomotiv has put in € 31 million ($40 million).
It all looks rather comical, considering of the introduction of the UEFA’s Fair Play rules: Clubs do not spend less, the soccer players’ salaries are still growing, and the number of transfers is only increasing. Thus, the English Premier League clubs have spent a record 630 million pounds ($982.2 million) on strengthening their teams during the summer transfer window; the earlier record was set in 2008 and amounted to 502 million ($782.5 million).
The Fair Play rules boil down to the fact that clubs do not have to spend more money per year than they have earned, but there are a number of limitations. If the club has a rich owner, he is allowed to cover the losses of no more than $60 million using his own funds. This option, however, will only be available in the earlier years. Later on, the amount covered by the owner will be reduced to $40 million. By the end of the decade, such clubs will have to be self-sufficient.
St. Petersburg’s Zenit club earned $ 81 million in 2012—a decent enough sum, but the club was spending much more. Only the transfers of the Brazilian Hulk and the Belgian Axel Witsel amount to $131.1 million.
“Since 2012, the financial Fair Play rules have taken full effect for the Russian clubs,” said Dmitry Manki, Zenit’s commercial director. “It’s no secret that the problem criterion of Zenith is the break-even criterion. We are seriously concerned about this situation, since the commercial success of the Russian soccer league is a lot worse than that of the leading countries of European soccer, due to the influence of a number of uncontrollable external factors. These are both the population’s low incomes and the state of sports infrastructure, the scale of piracy, as well as various regulatory constraints.”
The Zenit representative, who earns big money on merchandising for Russia, expressed his concerns about the stadium, the ongoing participation in European competitions, and having such a rich sponsor like Gazprom.
What can one say about the clubs from the second part of the table, which are dependent on regional budgets and earn around € 30 thousand per year ($39,500) (insignificant sums of money for a club in the top division) by selling merchandise? A Russian club’s income from television rights ranges between $3.9 million and $6.5 million, while, in England, even a club that got kicked out of the EPL gets $52.4 million, which is 10 times more. The figure is $20.9 million in Italy, $15.7 million in Spain, and $9.2 million in Germany.
In Russia, there is definite progress in the area of television rights, but they are so minor that they are unlikely to affect the UEFA’s strict rules. The only way to avoid sanctions from the UEFA, in this case, is to reduce transfer expenses, or to place bets on their own trainees.
Russia’s current champion, Moscow CSKA, took the first path. The army club has made some very successful transfers for five or six seasons and makes a profit at the end of almost every transfer window. This summer, CSKA received three promising players: the Bulgarian Georgi Milanov ($4.4 million), the Swiss Steven Zuber ($4.4) and the Brazilian Vitino ($11.8 million). In turn, the club managed to sell the aging Wagner Love to the Chinese Shandong Luneng ($15.7 million) and lucratively rent out Pavel Mamaev, Sekou Oliseh and Tomas Necid ($4.5 million each).
Makhachkala’s Anji–European soccer’s high-profile project—has decided to place bets on rookies. The club changed its club politics completely and turned loose of all of its high-priced stars. As a result, this summer, Anji became the world’s leader in income from the sale of players, earning $178.4 million.
“The RFPL club leaders, together with the league and UEFA, are developing a concept to comply with the Fair Play rules,” the vice president of the Russian Football League, Sergei Cheban, told RBTH. “Many clubs have already minimized their costs. This is progressive work. We understand that we are going to play in Europe and do so according to the UEFA rules, so we are trying to develop an optimal Fair Play model suitable for our country."
Cheban also noted that Russian clubs cannot afford expenditures like those of Madrid Real. “Real can make multi-million dollar transfers. This is one of the most popular clubs in the world; it has one of the world’s largest army of fans,” he said. “The Madrid players already have a successful business model. Cristiano Ronaldo’s transfer paid off in three years.”
“Russian clubs are far from this,” said Cheban. “We have just started to develop. After the difficult ‘90s and early 2000s, some serious money started to come into our soccer. If, previously, we had second-rate legionaries arriving, today, no one is surprised by the arrival of Brazil’s main striker, the Hulk. Russian soccer is on the right track. If we do not slow down, in 5–6 years we will be able to fight as equals with the world’s leading leagues, in financial parameters as well.”