HOW IS SPORT WASHING IS AFFECTING SOCCER?
Updated: Feb 12, 2021
This article was originally published on February 19th, 2020.
Manchester City one of the biggest and richest soccer clubs in the world has been banned from the UEFA Champions League, Europe's most prestigious and lucrative club tournament.
This punishment is in response to the investment that the club has received from Sheikh Mansour and the United Arab Emirates. Which many have claimed is part of a "sport washing campaign."
Manchester City's issues are more complicated than just investment received through their owner and the deals with UAE based businesses, such as jersey sponsor Etihad Airways.
Jersey sponsorships in soccer are nothing new, with English non-league side Kettering Town pioneering the idea in 1976, after signing a deal with Kettering Tyres when its players turned out in a game against Bath City.
Ever since soccer teams have been making money by offering jersey space to sponsors selling things like credit cards, cars, alcohol, and much more.
However, unlike most sponsors, which are promoting products that soccer fans can use or purchase, there are sponsors such as Gazprom.
Gazprom's logo can be seen on the soccer jerseys of teams in Germany, Russia, and Serbia as well as seen on the sidelines of soccer games in other European countries.
Gazprom is a company that is owned by the Russian government, which makes money selling natural gas to foreign countries.
So if soccer fans can't buy what Gazprom is selling, why are they spending millions of dollars to sponsor soccer games?
The answer is "sport washing," foreign counties using companies they own to improve their reputations abroad.
Simply put, sports washing is “egregious human rights abusers using sports to scrub their awful human rights abuses,” says Minky Worden (@MinkysHighjinks), director of global initiatives at Human Rights Watch.
Amnesty International UK’s director Kate Allen describes ‘sports-washing,’ as how “wealthy regimes and cash-rich individuals often see sport as a means to polish up their own tarnished images”.
Sport washing is nothing new to the world, it can be seen in the Berlin Olympics in 1936, the FIFA World Cup in Argentina’s military junta regime in 1978, and with apartheid South Africa’s relentless attempts to persuade foreign sports teams to tour the country.
However, sport washing has received somewhat of a renaissance in recent years. Laundering the reputation of sports properties is helping many countries to develop close political and economic links with very important people.
“It’s the acquiring of power and influence on the world stage,” says Dr. Paul Brannagan (@PMBrannagan) “It’s what we call soft power – getting what you want through attraction rather than coercion.
“The reason sport is one of the most political tools around is that it attracts more of us than anything else. What is more global than a World Cup or the Summer Olympic games? There’s nothing that grabs an international audience like it, and involves the same passion.
“These are great vehicles for long-term financial investment but what they also do alongside that is provide access to huge international audiences to get your message across.”
Gazprom as a company oversees most of the natural gas fields in Russia. Since 2005, the Russian government has owned a majority stake in the company, which means that the company's profits are under the direct control of Russian President Vladimir Putin.
The oil and gas industry accounts for around 40% of the country's annual budget. With Russia's dependence on revenue from oil and gas, it has been looking to open up new markets in Western Europe. Russia would identify Germany as the best opportunity for Gazprom to grow.
In 2005, Gazprom and the Russian government would strike a deal with then German Chancellor Gerhard Schröder, to create the Nord Stream pipeline. This would see gas being piped from Russia through the Baltic Sea, directly to Germany.
After leaving the Chancellor's office Schröder would find a job overseeing the Nord Stream pipeline for Gazprom, causing much concern in the German media. It would also come out that before leaving office Schröder had agreed to a secret Gazprom loan, that would provide over €1 billion to finance the Nord Stream project.
Soon after Schröder's appointment and information about the secret loan had been leaked, the Nord Stream project had become a story of scandal, corruption, and creeping Russian influence in Germany.
In a bid to change fortunes, Gazprom would sign a sponsorship deal with German Bundesliga side Schalke 04, in 2006. At the time, Schalke was looking at debts of as much as €120million, worrying the team's higher-ups about the club's future.
The new Gazprom sponsorship was set to provide the club with much-needed funds, up to as much as $127 million, making it, at the time, the biggest sponsorship deal in the history of the German Bundesliga. Eclipsing the €20 million received by Bayern Munich from Deutsche Telekom.
During the press conference announcing the sponsorship between the two organizations, Sergey Fursenko chairman of a Gazprom subsidiary said: "Schalke has a lot of connections with the energy sector and has a lot of supporters, that is why we decided to be the sponsor."
Schalke as a club was strategically chosen by Gazprom, due to the Gelsenkirchen-based club being in close proximity to Germany's energy industry and Western Europes largest natural gas storage facilities.
After the sponsorship deal with Schalke was completed and Gazprom logos were revealed around Schalke's Veltins-Arena, the German press began to change their tune when writing about the Russian gas giant. The German media moved away from being super critical of their business practices to hailing Gazprom as a savior of German soccer, by pumping millions of Euros into the Gelsenkirchen-based club.
However, Gazprom's deal with Schalke was their second move into the world of soccer. In 2005, Gazprom would purchase a controlling stake in a team on the other side of the Nord Stream pipeline, Russian team Zenit Saint Petersburg.
Gazprom would invest over $100 million in Zenit making them a major force in European soccer. Two years after taking control Zenit would win their first-ever Russian Premier League title. In 2008, Zenit would defeat Rangers in the Uefa Cup final to win their first-ever European trophy, later that year they would defeat Champions League winners Manchester United to lift the European Super Cup.
The Russian gas giant would utilize Zenit for marketing stunts, such as having the team's players play on a makeshift field on the side of one of their oil platforms.
Over the next few years, the Gazprom logo would become a team symbol of both Schalke and Zenit. As well as the logo overtaking the stadium, the Gazprom logo would find its way on to the clubs' official merchandise, with things such as scarfs and keyrings emblazoned with it.
Gazprom would expand its soccer empire in 2010 by becoming the new jersey sponsor of Serbian club Crvena Zvezda (also known as Red Star Belgrade). This deal would see the Russian gas giant help the club manage its debts. Crvena Zvezda was strategically chosen due to its proximity to the proposed South Stream pipeline. Furthermore, the soccer empire expanded with energy sponsorships with clubs such as Chelsea, the UEFA Champions League and the sports most famous tournament, the FIFA World Cup.
The Gazprom logo can be seen in commercials before games and on jerseys and sidelines once the games have started. This has made the Gazprom logo recognizable not just in Europe but across the world.
Gazprom has continued to receive criticism and protests from climate activists groups, such as Greenpeace, focusing on the gas giant's threats to Arctic resources. Despite this, Gazprom has not had any problem in renewing their sponsorships with any of their soccer partners.
Russia now controls almost half of all the gas consumed by Europe, thanks to the efforts made by Gazprom. This success by the gas giant did not go unnoticed by other nations.
Not long after Gazprom's entry into the soccer world logos from companies such as Etihad Airways, Emirates, and Qatar Airways began to make an appearance in the sport.
All three companies are owned by sovereign states in the Middle East and all three have interests that go beyond selling airline tickets.
All three companies have have significant strides into the world of soccer, the Fly Emirates logo can be seen on the shirts of teams such as Arsenal, Real Madrid, A.C. Milan along with others. However, the most famous so far has to be the connection between Etihad and Manchester City.
In September 2008, Sheikh Mansour would acquire Manchester City football club from former Thai prime minister Thaksin Shinawatra.
Sheikh Mansour would transform Manchester City, initially with a scattergun spending policy on marque signings, transfer fees, and players' salaries became an irrelevance.
Between 2006 and 2011, Manchester City would move from a profit of $23 million per year to a loss of $263 million per year, thanks to Sheikh Mansour willingness to underwrite the losses, through interest-free losses and shares. A total of $1.6 billion was pumped into Manchester City, by Sheikh Mansour and the other Abu Dhabi owners.
Financial Fair Play
The elite in European soccer would become concerned by the influx of new money clubs, such as the Abu Dhabi-owned Manchester City and the Qatari-owned PSG, seeing them as a threat to their cartel at the top of European soccer.
The teams would put pressure on the then president of UEFA, Michel Platini, to reduce the rise of the new money clubs. For the 2011/12 season, UEFA would introduce Financial Fair Play Rules (FFP).
The rules focus on the club's income minus their expenses. Soccer clubs have three sources of income, matchday income, broadcasting, and commercial.
Matchday and broadcasting income are difficult but not impossible to manipulate, however, teams have been able to find ways to manipulate commercial deals. The commercial deals are open to negotiation.
Since Sheikh Mansour's takeover in 2008 Manchester City's commercial deals has vastly increased. Most notably their partnership with the national airline of Abu Dhabi, Etihad Airways, replaced Thomas Cook as the team's shirt sponsor in 2009. This deal had an immediate impact on Manchester City's commercial revenues, which brought in $513 million.
These bloated commercial deals have been used to reduce the club's losses, therefore helping Manchester City satisfy FFP rules.
If Sheikh Mansour and the other Abu Dhabi owners can continue to satisfy FFP, while seeing success on the field with Manchester City, the club will continue to act as a way to gain approval from the media and the general public across the world.
For the nations pumping money into sports such as soccer, there is generally something that they do not want you to pay attention to, in the case of many of the Middle Eastern countries it is human rights for workers.
After Manchester City's Abu Dhabi owners were accused of human rights violations, manager Pep Guardiola refused to speak out.
“Every country decides the way they want to live for themselves,” he began. “If he decides to live in that [country], it is what it is. I am in a country with democracy installed since years ago, and try to protect that situation.”
Guardiola's response was nothing short of a babble, as he understands that soccer has entered an era where the top level of the sport is now directly influenced by geopolitics.
“They’re not making money out of these clubs,” human rights researcher Nick McGeehan (@NcGeehan) says. “They latch themselves on to prestigious, high-value brands, whether it's football clubs or universities or museums, and these associations enable them to present themselves as progressive and tolerant, when the opposite is true.”
Christoper Davidson, a Fellow at Durham University, explains the deeper strategy of Sport Washing.
“You have to put yourself in the mind of these states. Their nightmare scenario is Kuwait 1990, a situation that could have become an Iraq, without an international coalition. There’s no surprise they’re putting money into football clubs, art galleries, the London Eye… these aren’t necessarily things that are going to turn a profit, but they are going to generate a lot of good will.
“You can’t separate them out, it’s all part of a package, a strategy to ensure survival. This survival includes economic diversification so they have a functioning economy for when the world stops using oil.”
There are a number of questions that need to be asked during this time in modern soccer.
How ethically insulated can anyone in football claim to be? Where is this going next? How insulated will the game be from ripples in geopolitics? What will the ultimate effect be?
Gazprom and Etihad are great examples of sport washing currently within the sport of soccer, offering their nations a way around bad publicity, by winning approval on the field.
However, if you are a fan of one of these teams it can feel like a big opportunity, as the money is helping your team achieve success. Although it is starting to change the sport of soccer itself.
“It’s artificially manipulating the markets so they come out on top, and with no regard whatsoever for the health of the game as a whole,” says McGeehan.
Soccer has become a global mega-industry and therefore it has become impossible for the sport to escape external interests. However, it has become common place to see a Serbian team advertising a Russian gas giant facing off against a French side owned by the state of Qatar. The sport is starting to feel like is fielding two separate competitions at once. The game on the field and the larger play for the foreign influence that continues long after the final whistle.
Therefore, there are a number of questions that need to be asked during this time in modern soccer. How ethically insulated can anyone in football claim to be? Where is this going next? How insulated will the game be from ripples in geopolitics? What will the ultimate effect be?
In terms of the potential effect on the game, too, there is an instructive example from the summer. The signing of Neymar could be a landmark in more significant ways than expected. Sources close to PSG say that one plan discussed at the club is to effectively “short-squeeze” the football market, and so inflate wages and transfer fees because they know in the medium term that maybe only City and United will be able to match that kind of financial power.
“This is exactly the type of thing we’re talking about,” McGeehan says. “It’s artificially manipulating the markets so they come out on top, and with no regard whatsoever for the health of the game as a whole.”