Gazprom: between football and geopolitcs
Will Vladimir Putin again use football to reestablish relationships with Europe?
28 February 2022.
Four days have passed since Russia's aggression against Ukraine.
UEFA and FIFA issued a statement announcing the suspension of Russian teams from their competitions.
UEFA terminated its sponsorship contract with Gazprom, Russia's largest energy company, the majority of whose shares are owned by the Russian government. Gazprom became a sponsor of the Champions League in 2012 and was to remain so until 2024.
UEFA decided today to end the partnership with Gazprom in all competitions. The decision immediately affects all existing agreements, including the UEFA Champions League, UEFA national team competitions and UEFA EURO 2024.
UEFA official declaration
That year's Champions League final was to be played in St. Petersburg. A match that would also take on the celebratory role of the relationship between UEFA and Gazprom. This partnership had grown so much over the years that it became a source of more than $40 million for UEFA. And the Gazprom logo had become a constant presence during Champions League matches. A brand that ensured more than 40 percent of gas supplies were supplied to the European Union.
But that was not all. On that day, Schalke 04 also announced the end of its sponsorship deal with Gazprom. The relationship between the German club and the Russian company started in 2007.
But how had it come to this point?
How did Gazprom become one of the main sponsors of the elite’s world football?
But more importantly, why did they decide to do it?
Gazprom
Gazprom was founded in 1989. It is a company that extracts, produces, transports, and sells natural gas. One fundamental aspect of this company is that the Russian state owns more than 50% of it. So, when we talk about Gazprom, we also refer to Vladimir Putin.
Like any listed company, Gazprom should seek to maximise shareholder profits. These should be the company's favourites. In reality, for Gazprom, first comes the Russian state, namely Vladimir Putin. His interest was in using Gazprom as a foreign policy tool, and that is what he did.
Jurgen Roth described it as ‘the Kremlin's political, economic and intelligence weapon’.
As soon as he came to power, Vladimir Putin threw out the people who were in charge of the company and replaced them with his trusted people. People such as Aleksej Miller, the company's current CEO and former deputy economics minister.
Dmitry Medvedev also served as chairman of the Gazprom board of directors until 2008. However, he became known to the world as the one who replaced Putin as president after his first eight years at the helm, only to leave his chair again.
But why did Gazprom bet so heavily on football and sponsorship deals?
Theoretically, if we compare the Russian company with other companies that sponsor football clubs, their tactics would not make sense.
The main difference between the sponsors we were used to seeing and Gazprom was that there were usually only companies selling products on the jerseys of the teams. Like cars, credit cards, and phones. These companies were owned by private individuals.
Gazprom, on the other hand, sells gas and belongs to the Russian government.
However, the European football public could not afford to buy Russian gas. So why spend money to have their company appear on both jerseys and billboards, even to become the official sponsor of UEFA and FIFA?
The aim was not to increase its customer base. Gazprom was not interested in increasing its sales. Rather, it was to increase its influence, to give a more appealing image of Russia. To be associated by European football public with what they love most: football.
‘In 1969, on TVE, the president of Atletico [ The author refers to Vicente Calderon, president of Atletico Madrid ] was asked if football drove people batty, and Calderon answered: Yes. But the problem lies in those other things for which the forces spent on this ‘dumbing down’ could be regretted. Let people concentrate on football. Ideally, Spaniards should think about the match from three days before and for the three days afterwards.'
Cristobal Villalobos Sabas - Football and Fascism
To drive the European football public batty and to ensure that the company majority-owned by a totalitarian state - which over the years would annex parts of the territories of sovereign states - became synonymous with something positive, the journey was long and by no means obvious.
Geography helps us to understand how football and geopolitics have intertwined perfectly in this process.
Zenit St Petersburg
Gazprom's journey into football started at home. The company's first purchase was Zenit St. Petersburg in 2005. A club with which it had been linked by a sponsorship contract since 1999.
The massive injection of money immediately brought the desired effects. The club won the Russian championship in 2007, which was followed by many more. But it also triumphed outside the borders. Winning the UEFA Cup in the 2007/08 season.
In those years, Zenit was much talked about, both for the results, but especially for the huge amounts spent on the football market. The Russians signed players such as Hulk and Axel Witsel. Spending a total of 95 million.
Then came a brand new stadium. The Krestovsky Stadium (or Gazprom Arena) was built for the 2018 World Cup and cost around 600 million.
But the choice to bet on Zenit St. Petersburg was by no means casual. We have to take a look at the map. St. Petersburg is located 137 kilometres from Vyborg. A town of 80,000 inhabitants, known because it is the starting point of the Nord Stream gas pipeline. Which was, for years, the pipeline that transported Russian gas to Germany.
1,224 kilometres of pipes were laid in the Baltic Sea, which connected Vyborg to Greifswald, a German town and the pipeline's arrival point.
Now, from the map, let’s delve into the bilateral relations between Germany and Russia.
Schalke 04
After Zenit, Gazprom decided to go shopping in Europe, too, specifically in Germany. Again, the choice was not random. During Gerhard Schröder's government, Germany announced its intention to do without coal and nuclear power. This meant that Berlin would need gas, lots of gas.
Indeed, in 2005, a few months before losing the election to Angela Merkel, Schröder signed the agreement to build the Nord Stream gas pipeline. A commercial but, above all, geopolitical operation. Through this pipeline, relations between the two countries were considerably strengthened. Russian gas could reach Germany without having to pass through other countries.
In this way, Moscow got out of the way of a major problem: having to pay for its gas to pass through pipelines on the territories of other states. For instance, in Ukraine.
For Germany, this set the stage for economic growth that would come to a halt with the Russian invasion of Ukraine. The German economy in recent years has been based on the cheap acquisition of Russian gas and the high-priced export of its goods all over the world, but especially to China. Made in Germany allowed huge profits, thanks to low energy prices and high prices at which products were sold.
Money that Berlin used to maintain a very high level of welfare within its borders. This was a fundamental condition to keep its people happy and peaceful and to try to narrow the differences between East and West. Angela Merkel managed to govern for a good 16 years in a row. By doing practically nothing.
The Nord Stream project, however, became tainted almost immediately. Various stories of corruption and bribes, in which the former chancellor also ended up. In such a situation, it is necessary to shift the focus elsewhere. Try to give the project a different image. More beautiful. And what better way to do this than to invest in football?
And so Gazprom shifted the focus to football, signing a sponsorship deal with Shalke 04 in 2006. A team that was in extreme financial difficulty at the time, with a 100 million euro hole.
But even here, geography helps us to go beyond the simple sponsorship contract. Schalke 04 is the team from Gelsenkirchen. The city is located in the Ruhr region, famous for being the centre of Germany's energy industry. It is 200 kilometres away from Rehden, a town where the Astora natural gas storage facility, one of the largest in Western Europe, is located.
‘Wir geben gas auf Shalke’ was the Gazprom slogan.
‘We give gas to Shalke’, a phrase that plays with the German-language saying ‘Gas geben’, meaning ‘to press the accelerator’.
The German magazine 11Freunde described the deal as follows: ‘Shalke has sex without a condom’.
Also, for Shalke, Gazprom's money helped to get a considerable increase in victories on the pitch. A Bundesliga, the DFB Pokal and a German national cup. And reaching the semi-final of the Champions League, lost to Manchester United.
Of that team, the talent that went the furthest was Manuel Neuer. After great performances at Shalke 04, he moved to Bayern Munich. A transfer in which Vladimir Putin also tried to get in the way. According to media reports, Putin even went so far as to try to convince the goalkeeper to stay at the club.
Criticism of both the Nord Stream project and the agreement between the club and the Russian company was not long in coming. Many (correctly) pointed out that all this dangerously increased Germany's dependence on Russian gas.
On the one hand, there was the German government, which seemed not to understand and pretended not to see the criticality of this plan. On the other hand, many described the sponsorship contract between Gazprom and Shalke 04 as a means to influence German public opinion.
Interestingly, the Nord Stream AG company was based in Zug, Switzerland. The same location as the headquarters of FIFA, of which Gazprom would become a partner.
The Russian tactic used in Germany would perfectly work. Over the years, Germany would become Gazprom's main market. The Germans received as much as 35% of the gas they imported from Gazprom alone.
Red Star Belgrade
Let’s move further east, to the part of Europe that has become the most impoverished in recent years: the Balkans. Historical clubs such as Red Star Belgrade have paid the price. The Red Whites were in a critical financial condition in 2010. With a 20 million euro hole.
Once again, Gazprom's money came in to fix the situation. A five-year sponsorship deal for EUR 3 million per year. But again, football and debt settlement are only part of the story.
There was another gas pipeline involved, the South Stream. A project that had been announced a good three years earlier, in 2007, in Italy. Paolo Scaroni, CEO of Eni, and Alexander Medvedev signed the first Memorandum of Understanding. The pipeline aimed to transport Russian gas through the Black Sea, passing through Bulgaria and Serbia and then arriving in Europe. Once again, the intention was to bypass Ukraine.
However, the South Stream was never completed. The project was deemed non-compliant by the European Union. The Russian government cancelled the project on 1 December 2014, seven years after its start.
Russia's need to be present on Serbian territory goes beyond gas. Belgrade is the closest capital to the European Union, over which Moscow still has a crucial influence. Ideally, a buffer state to be used for its interests.
In this case, culture and religion come to Putin's help. Pan-Slavic rhetoric and the Orthodox religion are two tools to advance the narrative needed to keep the two peoples close and allow the Russians to have strong leverage over the Serbs.
Over the years, Russia has always supported Serbia in international affairs, especially Kosovo. Supporting the Serbs during the war and even once the conflict was over, Moscow did not recognise the independence of Prishtina.
Nothing has changed between Belgrade and Moscow after the Russian invasion of Ukraine. Belgrade has continued to support Moscow. Even Gazprom's sponsorship contract with Red Star Belgrade has not lapsed, but the contrary. It has continued and continues to this day.
All this sparked critics last year when the red and whites returned to the Champions League. Therefore allowing Gazprom to be back to the most important stage of European football.
Gazprom's intervention also had an impact on the psychology of the club's fans. Red Star Belgrade is the most famous and most supported club in the country. The only one capable of winning the Champions League. A historic club whose failure would have been much more than the collapse of a football team. Intervening and saving it from the end, it did nothing but improve the image of the Russians.
Crème de la Crème
And now, we come to the final part of Gazprom's journey into the world of football. The Russian company has managed to become an official sponsor of both UEFA and FIFA. It joined the list of main sponsors of the Champions League, the most important club football competition in the world.
But there is only one other competition that surpasses the Champions League: the World Cup. Gazprom began its relationship with FIFA in 2015.
Money, but above all, enormous visibility.
Linking up with FIFA and UEFA represented a quality upgrade for Gazprom. Concluding a long process of positioning and branding. The Russian company thus became synonymous with Champions League and World Cup matches. Combined with a stable presence in countries such as Germany, Serbia and England (where it was a sponsor of Chelsea). The last piece, undoubtedly the most important, was hosting the World Cup in Russia in 2018. A real proof of strength.
Gazprom managed to create a global brand, to clean up a tarnished image, creating an entity separate from the Russian state. By participating in the reality of a strong cultural tool like a football team, the Russian company managed to insert itself into the soul of that city and to associate itself with the ideals of the clubs. Having had - and still having - football fans who go around wearing jerseys with Gazprom’s logo represents a very powerful tool.
Gazprom was the first company owned by a country to make its way into the world of football. Then came the United Arab Emirates and Qatar - with their airlines - acquiring Manchester City and PSG, respectively. Giving life to the same type of bond aimed more at increasing one's influence abroad than at making money.
It is legitimate to wonder about the criticisms aimed at operations like these and the reaction of the fans. In this sense, the example of Newcastle United is a lesson. The fans exploded with joy at the news that the Arab sovereign fund had acquired their club with an 80% stake. At that moment, the fans did not think about the critical issues of a country like Saudi Arabia. Because they are interested in the good of the team, the money that the new ownership or a new sponsor makes available and the victories that these can cause.
Will football bring Russia and Europe closer?
The least diplomatic clash in history - the one between Zelensky, Trump and Vance - has shown us something very clear. The United States wants to reopen relations with Russia. Moscow is not winning the war and is in enormous difficulty, as George Friedman pointed out in this video.
But while it might be a little easier for the United States to convince its population of the need to re-establish relations with Russia, for European states, it would be much more complicated.
After three years spent (rightly) criticizing Putin's actions and supporting the Ukrainian people. After having ended all commercial relations with Moscow, from the closure of gas pipelines to the termination of sponsorship contracts with Russian companies to the boycott of Russia in sports.
What narrative could the European politicians use to convince their people that they can now go back to dealing with Putin?
And do business with Russia?
Perhaps sport could be the tool to use again. Putin, through Gazprom, had succeeded in his intent. Adopting football as a tool to strengthen relations with Europe, increasing his influence in the old continent, and above all creating a better image of Russia in the European community. Focusing on the events that European citizens love the most: football matches.
Gazprom, over the years, managed to become synonymous with the Champions League and the World Cup. Consequently, something very positive in the minds of the football public. Distorting the image of Gazprom and Russia.
After everything that has happened in recent years and what I have written in this piece.
If I asked you to tell me the first image that comes to your mind when I mention Gazprom, what would you answer?
An advertising board for a Champions League match in which the logo and name of the company appear?
Or the victims of the war in Ukraine?
Sources:
https://www.nss-sports.com/en/lifestyle/29085/il-problema-del-calcio-europeo-con-gazprom
https://thesefootballtimes.co/2015/01/15/the-gazprom-empire/
https://theconversation.com/how-russia-has-devoted-its-energy-to-the-beautiful-game-46174
https://www.nytimes.com/athletic/4878050/2023/09/20/champions-league-gazprom-sponsor-red-star-belgrade/
https://www.11freunde.de/bundesliga/schalke-hat-sex-ohne-kondom-a-caaed467-0004-0001-0000-000000354828