The rise of sportwashing
Commercial sponsorships in football have existed for decades as a pivotal revenue stream for clubs. Shirt sponsors, sleeve sponsors and naming rights are normally owned by private companies which sell commodities that the general public can benefit from and, for the most part, the contracts are valued fairly. For example, Manchester United’s kit sponsor is Chevrolet (worth £47m per year), Juventus’ kit is sponsored by Jeep (worth £38m per year) and Chelsea have recently signed a 5-year deal with telecommunications and internet service provider 3 (worth £40m per year). However, in some instances, sponsorships have been used by state-owned companies with the sole purpose of glossing over their global image, such as concealing corruption and human rights abuses.
One such instance is the involvement of Gazprom, a Russian state-owned natural gas company that sources, produces, transports and sells gas to a plethora of countries in Europe. The company was founded in August 1989 by Viktor Chernomyrdin and later operated under the leadership of Rem Viakhirev until Vladimir Putin came to power in 2000, who subsequently gained control over Russian oligarchs and their companies. Since 2001, Gazprom has been run by Alexey Miller, a close friend and confidante of Putin, which instantly aroused suspicions in both the sporting and non-sporting world. Jurgen Roth summarised the situation perfectly in his book ‘Gazprom: The Eerie Empire’, stating that “Gazprom is the political, economic and intelligence arm of the Kremlin”.
Russia is an energy powerhouse, being the world’s leading natural gas exporter and second largest oil exporter. Many European countries such as Poland, Serbia and Germany rely on Russian gas and as of 2017, 39% of the EU’s total gas import came from Russia. Back in 1999, Germany provided Russia with the largest investment opportunity for Gazprom, with then Chancellor Gerhard Schroder announcing the phasing out of coal and nuclear power and replacing the energy source with natural gas. However, with many of Russia’s gas pipelines having to go through other European countries, Gazprom had to pay billions in transport tax. As a way to bypass these costs, Gazprom introduced Nord Stream, a pipeline that transported gas directly from Russia to Germany. Due to alleged corruption and backlash from environmental groups, Russia sought to sportswash their reputation by sponsoring a number of football clubs that were struggling financially, thus appeasing a large section of the population.
In 2005, Gazprom signed a shirt sponsorship deal with Russian side Zenit St. Petersburg, a club that was conveniently situated at one end of the Nord Stream pipeline. In the years that followed, Zenit became a powerhouse in Russian football, winning the Russian Premier League 7 times, the Russian Cup 5 times and the UEFA Cup in 2007/08, thus boosting the appearance of Gazprom. Moreover in 2006, Gazprom announced a partnership with German giants FC Schalke 04 who were subject to debt totalling $143.7m. This amount was subsequently underwritten by the forthcoming sponsorship, meaning the club could benefit from financial stability and compete at the highest level, which led to Die Knappen winning the DFB-Pokal in 2010/2011 and the DFL-Supercup in 2011. They also reached the Champions League semi-final that year, beating the likes of Valencia and Inter Millan on the way. Additionally, Gazprom has provided energy partnerships for the 2018 FIFA World Cup, Chelsea (2012-2016) and the UEFA Champions League (2012-2016).
In September 2017, the European Commission launched an Anti-Trust investigation into Gazprom’s activities, claiming the company was abusing their influential position to consolidate their position in possible geographic supply markets. However, in May 2018 a settlement was reached between the European Commission and Gazprom, with the latter accepting a number of new terms and conditions without facing any financial penalties. Due to the failure to regulate commercial sponsorship, it is clear to see an increase in the ever-growing presence of state-owned organisations within football and the malignant motive behind their involvement.
To the footballing worlds dismay, the involvement of state-owned sponsorships within the beautiful game did not stop there. In 2008, Sheikh Mansour, who is the Deputy Prime Minister of the UAE and a prominent member of the Abu Dhabi royal family, purchased a controlling stake in Manchester City for £210m. The Citizens have since been accused by former President of UEFA, Michel Platini, of financial doping, a method used to bypass Financial Fair Play (FFP) and inject cash into the club to wield an unfair advantage.
In 2011, Manchester City recorded a loss of £197m, the largest ever loss in football history. This instigated a scheme to bypass the new rules dictated by FFP by signing sponsorship contracts with subsidiary companies from the UAE, which were often owned by Sheikh Mansour’s distant relatives. For example, deals were signed with the airline Etihad Airways, service provider Etisalat, and financial investment company Aabar. Fundamentally, the value of these contracts were artificially inflated in order to hide the cash injections from the owners of said companies, who were linked to Manchester City’s owners in one way or another. The deal with Aabar was alleged to have been valued at £15m per annum, however the true value was said to be around £3m per year, with the Abu Dhabi royal family contributing the remaining amount. Documents released by Football Leaks claimed that the total sum of money that was hidden off the books amounted to £127.5m.
However, corruption is not the only reason for the existence of state-owned sponsorship deals, as sovereign states have also looked to polish their international reputation and subsequently cover up human rights abuses. A notable perpetrator is Qatar and their sponsorship of French side Paris Saint Germain (PSG), who has been the beneficiary of lucrative investment since the takeover of the Emir of Qatar, Tamim bin Hamad Al Thani, in 2011.
For years Qatar has relied on migrant workers from Egypt, Bahrain, the UAE and Saudi Arabia to build vast infrastructure within the country, such as stadia for the forthcoming 2022 FIFA World Cup, which is due to be the first hosted in the Middle East. Human rights abuses have continued to be a problem in Qatar and as such, the International Organisation for Labour committed to a three-year agreement to introduce measures to protect migrant workers. However due to a weak implementation of these new rules, exploitation and abuse continues to plague migrant workers within Qatar.
As a way of concealing the horrifying human rights abuse, Qatar has attempted to boost their reputation on the international stage by investing significant amounts of money into European businesses, in this case PSG, thus persuading the public to turn a blind eye to the mistreatment of the aforementioned workers. The corruption does not cease there, as PSG’s owners have also been indicated in inflating sponsorship contracts to balance the books. The Parisien club signed a 5-year contract with Qatar’s tourism authority which was alleged to be valued at £190m per year, however after thorough investigation into the contract, the value was believed to be in the region of £2.5m per year.
The dance between sport and corruption is not a new phenomenon, however the magnitude and intricateness of the culprits as well as the suffering of the victims have reached alarming levels. Whilst on the pitch there is a battle to consolidate silverware and dominate commercial deals, in the shadows lies another power struggle to take centre spot on the world stage.
Written by Charlie Adey