Ahead of World Cup, Russian gas giant Gazprom uses sponsorship empire for influence, not sales
{{#rendered}} {{/rendered}}As FIFA descends on St. Petersburg for the World Cup preliminary draw Saturday, it is entering the capital of a sponsorship empire.
Government-controlled Russian gas company Gazprom is a huge presence in St. Petersburg, where it owns Russian champion football club Zenit and bases many of its roughly 400,000 staff. Entire streets in the historic center are lined with boards on lampposts reading: "Gazprom for the city."
Gazprom, whose boss Alexei Miller is a close political ally of Russian President Vladimir Putin, is almost as omnipresent in world football.
{{#rendered}} {{/rendered}}It is a major FIFA sponsor ahead of Russia's 2018 World Cup, its logo prominent at the draw ceremony. With FIFA embroiled in scandal after the arrests of officials in May, some FIFA sponsors have criticized the organization and its president Sepp Blatter, but Gazprom has not. By sponsoring the Champions League, it has access to UEFA boss Michel Platini, the favorite to succeed Blatter.
Despite spending an estimated $100 million a year to display its brand in some of world soccer's most desirable competitions, Gazprom doesn't sell directly to fans. Instead it specializes in vast energy supply, selling billions of cubic meters of Russian gas.
As a result, some suspect Gazprom's sponsorship empire may be an attempt to influence European political decision-making, or even a vanity project grown out of control.
{{#rendered}} {{/rendered}}"What they're seeking to do is to influence countries," says Simon Chadwick, a professor of sports marketing at Britain's Coventry University. "They're seeking to influence the consumption of gas by countries, but they're also seeking to influence decisions around the distribution of gas." Sponsoring a club can give Gazprom public support in foreign countries while negotiating trade deals, as well as access to politicians, Chadwick argues.
The company holds a monopoly on all gas exports from Russia, giving it huge influence on world markets. However, it is often accused by European politicians of misusing that power to further the Russian government's political aims, including raising prices to put pressure on neighboring countries.
At World Cup and Champions League games, sponsors gain access to VIP hospitality areas which can contain major decision-makers such as the FIFA officials embroiled in disputes over Russia's right to host the 2018 World Cup, or club owners who may be major political players in their own right.
{{#rendered}} {{/rendered}}Using AC Milan's owner Silvio Berlusconi, a former Italian prime minister, as a hypothetical example, Chadwick outlined how he believes Gazprom's sponsorship could help the Russian government further political aims.
"Rather than have to go up through normal diplomatic channels to negotiate with the Italian prime minister or even meet with the Italian prime minister, what you do is you sign a Champions League deal," he said. "AC Milan plays in the Champions League and immediately you're in the corporate hospitality lounge of the club that's owned by Berlusconi. So I think it's about networking, it's about influence, it's about attempts to lobby."
Andrei Kolesnikov, a Russian political analyst at Moscow's Carnegie Center, is skeptical of suggestions Gazprom is furthering the Russian government's political goals.
{{#rendered}} {{/rendered}}Instead he believes Miller, Gazprom's president, is simply following the behavior of the many Russian businessmen who have bought top European clubs in recent years. Backing clubs in countries such as Russian ally Serbia or in Germany, where the Russian government and Gazprom have been negotiating gas deals, was simply a way to follow political trends, Kolesnikov believes.
"It was a fashion several years ago among Russian oligarchs to support sports clubs," he said in e-mailed comments. "Miller felt himself just like any other oligarch. And it was right for him to finance clubs from the countries which are close to Putin or his ideology."
Gazprom's football deals have sometimes come at significant times for Russian foreign policy.
{{#rendered}} {{/rendered}}It began sponsoring German club Schalke in 2006, when Gazprom was pushing to build the North Stream gas pipeline from Russia to Germany, a project that was later successful. Four years later, Gazprom began sponsoring Serbia's Red Star Belgrade at a time when Russia was pushing to develop the South Stream pipeline, which would have run across Serbia.
Sponsoring big events does not come cheap. Over a multi-year contract, "with the World Cup, you're talking of tens of millions of dollars, but potentially hundreds of millions of dollars," Chadwick says. Add in the Champions League and deals with clubs like Chelsea, Zenit, Schalke and Red Star, and Gazprom's whole football portfolio is "likely to be worth upwards of $100 million a year," Chadwick says.
Gazprom did not confirm whether Chadwick's estimate was accurate. Company representatives either declined to comment or had yet to reply to requests.
{{#rendered}} {{/rendered}}Gazprom's money has helped to transform Zenit, which is hugely popular in Putin's hometown of St. Petersburg, into a four-time national champion and perennial presence in the Champions League.
It has also helped to sign star players such as Brazilian striker Hulk, who became Russia's most expensive signing when Zenit bought him from Porto for over 40 million euros ($43 million) in 2012. Hulk says that, while the company's largesse has won the loyalty of Zenit's players, the club comes first.
"Gazprom gives us some support," Hulk said Monday through a translator. "It's very good ... but the most (important) part is to defend Zenit as a team."