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Russian football chief urges cuts in FC sponsorship contracts with state monopolies

May 29, 2015, 20:31 UTC+3
Among the state monopolies financing professional football clubs in Russia are Gazprom (Zenit St. Petersburg FC), Russian Railways RZD (Lokomotiv Moscow FC), VTB Bank (Dinamo Moscow FC)
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Nikolai Tolstykh, president of Russian Football Union

Nikolai Tolstykh, president of Russian Football Union

© ITAR-TASS/Stanislav Krasilnikov

MOSCOW, May 29. /TASS/. The Russian Football Union (RFU) has initiated a reduction in national football clubs’ sponsorship contracts with government corporations, Nikolai Tolstykh, the RFU president, told TASS on Friday.

The proposed initiative has been included in a package of documents to be delivered at a session of the Russian Presidential Council on Physical Culture and Sports next month.

"We have drafted a report for the Presidential Council and it includes all our reference materials and proposals," Tolstykh said in an interview with TASS. "For instance some of the proposals stipulate cuts in financing of professional [football] clubs by state-owned corporations."

Among the state monopolies financing professional football clubs in Russia are energy giant Gazprom (Zenit St. Petersburg FC), rail monopoly Russian Railways RZD (Lokomotiv Moscow FC), major state lender VTB Bank (Dinamo Moscow FC) and other state mammoths.

"The report contains all the information over the recent years," Tolstykh said. "There is a section on financial and operational activities containing curious figures, which explicitly show that it is customary to spend huge funds in Russian professional football."

The RFU president said that in 2012 the Russian professional clubs spent a total of 8.2 billion rubles ($156.3 million) on international transfers plus 2.2 billion rubles ($42 million) on agency fees for concluded contracts.

"The sum will amount to $1 billion if one should add salaries of footballers [to the mentioned above figures]," Tolstykh said. "This is more than the budget of some Russian regions. This sum of $1 billion was spent on operations, which have nothing to do with the development of the Russian football."

After the record-high year of 2012, he said, spending on foreign recruits went on decline with professional clubs paying in 2013 the sums of 6.4 billion rubles ($122 million) for international transfers and 1.8 billion rubles ($34.3 million) for agency fees. The respective figures for 2014 amounted to 2.7 billion rubles ($51.4 million) and 624 million rubles ($11.9 million), Tolstykh said.

It is in doubt, whether Tolstykh will be personally delivering the report at the session of the Russian Presidential Council on Physical Culture and Sports in June, as the RFU Executive Committee brought up at its session in late April an issue of early termination of powers of the national football governing body’s President Tolstykh. The issue was agreed to be included in the agenda of the organization’s conference, scheduled for May 31.

The RFU finances have been strained lately and Tolstykh, who heads the organization since September of 2012, announced on Wednesday that the Russian football governing body’s debts totaled some 1.4 billion rubles (almost $27.4).

In an interview with TASS earlier in the day, Tolstykh said the major source of the current financial problems in Russia’s football governing body is the lack of a targeted source of funding for Russian national team’s Head Coach Fabio Capello’s contract, which makes up about 20% of the organization’s budget.

Capello’s contract, which he initially signed in 2012 and extended for another four years in early 2014, was in the media spotlight late last year over the issue of wage arrears.

"When I took over the RFU, the organization had a debt of 840 million rubles ($16 million) inherited from the previous leadership. The debt was promised to be written off but it was not," Tolstykh said. "The RFU would have had a positive balance sheet if there had been no contract with Capello and the current debt If there had been no contract with Capello and this debt."

Russia’s daily Novaya Gazeta published late last month a copy of a contract inked by the RFU with Italian manager Capello in January of 2014.

In line with the document, which was signed until July 2018 and stipulated an annual salary of 7 million euros ($7.6 million) for the Italian coach, the RFU practically had no rights of severing the contract unilaterally without paying a penalty, while Capello was granted such opportunity.

Tolstykh said on Friday that if the experienced Italian manager failed to bring the national team to successful results, the RFU would sever the contract with Capello.

"If the Russian team has no worthy sporting results, then in the framework of the labor legislation the contract will be severed," Tolstykh said. "There are terms of a labor contract. And under the certain terms of the Russian Labor Code all contracts, including with Capello, can be cancelled."

The Russian national football team moved five places up to the 27th position in monthly FIFA rankings on May 7.

 

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