Russian football seeks business inspiration
The start of the Russian football season has again focused attention on the profitability of many clubs. Low ticket prices, old stadiums and sometimes outrageous player contracts mean a financial struggle for many clubs.
There are three types of ownership in Russian football. Some in the Russian Premier League are owned by regional authorities, while others by state industrial monopolies. Four clubs are privately owned.
The historic club Dynamo Moscow is one of the most dynamic.
“We are trying to establish our own commercial infrastructure here with Dynamo Moscow in order to make football profitable. The second source of income is the financial return from the sport as such. If we build modern comfortable arenas, with good infrastructure, more fans will come and they will spend more,” believes Dmitry Ivanov, General Director of Dynamo Moscow.
Today teams are mostly financed from the state budget and their room for manoeuvre is limited by their autocratic owners and sponsors.
Luckily for Dynamo, they’ve been given the freedom to reconstruct the football team’s old facility in north Moscow.
The stadium will be built to the latest European standards with comfortable seats, underground parking and a new metro station. It will also include business and shopping centres.
It’s hoped by broadening the club’s commercial activities more money will be freed up for core business – winning football games.
Dynamo has recently signed a sponsorship deal with Metalloinvest, a metallurgic company headed by Alisher Usmanov.
The club announced a budget for 2008 of $US 61 million. Financial figures are rarely revealed in Russian football but the club says its openness is part of its businesslike approach to sport.
“Revealing our budget will help to fight grey salary schemes. A club is like any other joint-stock company. As soon as we learn to see the football club as a business unit, the business climate in football will normalise and our revenues and expenditures will become transparent,” says Yury Isaev, Deputy Chairman of the Dynamo society.
Dynamo’s budget is relatively modest compared to many other teams. But it’s already proving an example of how business in sport should be done.