Putin Beats Billionaires at Soccer
Will Russia's ruling elite splinter under Western pressure and push President Vladimir Putin toward de-escalation in Ukraine? The leaked transcript of a Moscow conversation about the nation's soccer league embracing Crimean teams suggests not.
Novaya Gazeta, a Moscow weekly, has published what it says is the transcript of a Russian Soccer Union executive committee meeting held on July 30. While the recording's authenticity is impossible to establish, sports reporters in the Russian capital are convinced it's genuine. While I tend to agree, it might be wise to treat the transcript as a play with characters based on actual personalities.
The cast includes: Nikolai Tolstykh, the soccer union's head; Putin's close friend Vladimir Yakunin, who runs Russia's state railroad monopoly; billionaires Sergei Galitsky, founder of the Magnit grocery store empire, and Suleiman Kerimov, with interests in gold and banking; Alexander Dyukov, chief executive of Gazprom Neft, the natural gas giant's oil subsidiary; and Ukraine-born businessman Yevgeny Giner, who runs CSKA, one of Russia's top soccer clubs.
Putin himself keeps an eye on soccer, Russia's most popular sport. He's saved a few insolvent clubs by foisting them on wealthy businessmen as part of their social responsibilities, and he was key to Russia winning the hosting rights for the 2018 World Cup, a decision U.K. Deputy Prime Minister Nick Clegg now says should be reversed as part of the sanctions package.
Russian soccer's governing body includes all those business VIPs because they or their organizations sponsor teams: Russian Railroads is the parent of Lokomotiv Moscow, Galitsky owns a team in his hometown of Krasnodar, Kerimov bankrolls Anji in his home region of Dagestan, and Gazprom Neft is responsible for Zenit St. Petersburg, the club with the seventh-biggest transfer budget in the world.
At the end of July, the executive committee assembled to decide whether three teams from Crimea should be allowed to play in Russia's second division, the lowest rung of the country's professional soccer ladder. The political dimensions of a sportingly insignificant matter warranted a heated discussion among the assembled money men.
In the Novaya Gazeta play, Tolstykh kicks off by telling participants to mark yes or no votes on a ballot. That provokes an emotional outburst from Giner, concerned a yes vote may land him on a sanctions list. Yakunin, who is already sanctioned, weighs in:
"What are you talking about? Our country is under sanctions. Our president stands alone on the rampart. And you're talking about making it worse for the country and setting it up for additional sanctions? They will impose them whatever you do. If you crawl before them on your bellies, they will. Do you understand? So, either you get out of this country or behave as its citizens."
Giner, who says he has business interests in Ukraine, is not silenced by this admonition, and Kerimov and Galitsky appear to side with him. Reticent Kerimov only utters one sentence during the entire conversation: "It's just that executive committee members could find themselves sanctioned." Expansive Galitsky, however, is clearly distraught:
"It took me 25 years to build my company, it has a $30 billion market cap now. I have no doubt that we will all be sanctioned and that my company's shares will lose three-quarters or four-fifths of its value, to $7 billion from $30 billion. It's understood that that's my private story. And it's understood that I'm willing to suffer. It's a huge number, though. I have 250,000 people working for me, it's the biggest private company in Russia. And I'd like to request a consultation with Number One. Only after that am I willing to bury what I've been doing for 25 years."
Dyukov, for his part, points out that accepting the Crimean teams could lead to Russia losing the World Cup, and "you know who did all the work" on pushing through the bid -- a clear reference to Putin. Dyukov seconds Galitsky's call for a "consultation," saying the big state companies such as the oil giant Rosneft, the savings bank Sberbank and Gazprom itself were hesitant to move into Crimea because the Kremlin had told them to hold off.
The recording, if genuine, is the best evidence so far that sanctions are making the Russian elite anxious -- though not enough to to rebel. Galitsky speaks for everyone in the room when he says, "If there is a direct order, there are no questions."
Even billionaires who aren't Putin's friends and thus not recipients of big government contracts are dependent on him. They know the rules: Rebelling openly may mean losing their Russia-based businesses, the backbones of their empires. They may resent the Kremlin machine's relentless attempts to bind them with a signature here and a vote there, but as long as the political will comes from Putin, they will acquiesce and suffer the consequences.
At the July meeting, the committee decided to wait a day -- officially to notify world soccer's governing body, FIFA, thought it wasn't clear what that would achieve. The following day, the panel voted to accept the Crimean teams. Clearly, the "consultation" Galitsky sought had taken place.
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