Russia’s Billionaire Sports Owners Feel Fallout From Invasion Sanctions

Asli Pelit
·4 min read
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A week ago, Russian billionaire Alisher Usmanov was a master of the sports universe. The former Arsenal F.C. owner, who sold his stake to Los Angeles Rams owner Stan Kroenke in 2018 for $700 million, still had a foot in the Premier League, with two of his companies sponsoring Everton. He was president of the International Fencing Federation, running an Olympic sport. And people presumed he owned a giant yacht.

That’s all changed, as the backlash against the Russian invasion of Ukraine has expanded into a worldwide financial freeze-out. From UEFA to top oil companies and Hollywood to sportswear manufacturers, institutions and countries are cutting or suspending their dealings with Russia and sanctioning Russian billionaires—with sports providing prominent examples.

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Usmanov, a close ally of Russian president Vladimir Putin, stepped down as president of the fencing federation upon receiving sanctions from the United Kingdom and European Union. Everton suspended its deal with Usmanov’s companies after the billionaire’s EU assets were frozen. The 512-foot mega-yacht Dilbar, said to belong to Usmanov, is stuck in Hamburg, amid reports that it had been seized.

This was all happening at the same time that fellow Russian billionaire Roman Abramovich announced he would sell EPL powerhouse Chelsea.

The rapid escalation of pressure on the sports moguls is unprecedented, and reveals the world’s shock at the Russian invasion. “This isn’t 1956 Hungary,” Derick Hulme, a political science professor at Alma College and an expert on the politics of global sports, told Sportico in an interview. He referred to the Soviet Union’s invasion of Hungary in the 1950s.

The Ukraine invasion “is now in everybody’s face 24 hours a day,” Hulme said. “We have seen very surprising moves by companies that have enormous assets, like BP and Shell. Those won’t have immediate impacts right now. But others will. Russia is effectively severing itself from the rest of the world. Russia is becoming North Korea, effectively became North Korea almost overnight.”

Schalke 04 was the first sports team to cut ties with its Russian sponsors by replacing the Gazprom logo on its jerseys hours after the start of the invasion. The next day UEFA, European soccer’s governing body, announced that the 2022 Champions League final, one of the most lucrative sports events in the world, would no longer take place in St. Petersburg. In the following days, UEFA ended its partnership with Gazprom across all competitions, including the Champions League and Euro 2024. The deal is said to be worth $45 million a year.

Headquartered in St. Petersburg, Gazprom holds the world’s largest natural-gas reserves, and before the invasion, the state-owned company provided $1 billion in sponsorships across many sports.

“I think Putin understands the power of sport,” said Simon Chadwick, director of the Centre for Eurasian Sport at the EM Lyon Business School. “When he started to invest in sports, everybody thought, ‘Great, he has a lot of money!’ But he wasn’t giving away free money as most people thought; he was building a geopolitical empire.”

Gazprom has been Russia’s biggest spending sponsor in Europe, but it’s not the only one. Formula One team Haas has been supported by Uralkali, but the team removed the company’s branding—which features the colors of the Russian flag—and ran a plain white car for the final day of preseason testing last week. Manchester United ended its longtime agreement with Russian airline Aeroflot.

While sports teams have ended their ties with Russian sponsors, sports brands like Nike, Adidas and Puma have suspended their current deals with Russian teams, including the Russian national team. “I think Putin has created his own worst nightmare,” Hulme said. “He has solidified the entire democratic world in a way that arguably would not have been possible without what he had done.”

Outside sports, the United States and most European countries have imposed sanctions on Russia, which could cause the country’s economy to shrink by 7%. The ruble lost 26% against the dollar in the past week. While Russia’s oil and natural gas-based economy is the fifth-largest in Europe, in terms of nominal GDP, New York City’s economy is larger.

“I think Putin thought he could squeeze Europe. And I think he also was counting on having his $630 billion in foreign reserves at his disposal,” Hulme said. “But the U.S., the EU and the Japanese have very effectively targeted the vast majority of those foreign reserves. I think he underestimated the will of the West to act in a unified way.”

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