The Business World of Russian Football

THESIS – BACHELOR'S DEGREE PROGRAMME SOCIAL SCIENCES, BUSINESS AND ADMINISTRATION THE BUSINESS WORLD OF RUSSIAN FOOTBALL Issues and Prospects AUTHOR : Roman Andreev LI17SP SAVONIA UNIVERSITY OF APPLIED SCIENCES THESIS Abstract Field of Study Social Sciences, Business and Administration Degree Programme Degree Programme in Business and Administration Author Roman Andreev Title of Thesis The Business World of Russian Football. Issues and Prospects Date 10.12.2020 Pages/Appendices 70/0 Client Organisation /Partners Abstract Beyond any doubt, football, known as soccer in North America, remains to be one of the most influential sport games in the history of humanity. Up to this day, soccer continues to captivate billions of sports enthusiasts all over the globe. Football has achieved great recognition, and it is now considered the most popular sport in the world. Nowadays it is appropriate and entirely justified to talk about the emergence of the football industry. Basically, modern soccer can be viewed as an international business, since global player trans- fers are made on a regular basis and international professional tournaments are organized. Moreover, soccer leagues may be now rightfully classified as separate commercialized industries. Certain football tournaments perform much better than their competitors in a business sense. In this work, the Russian Premier League in particular is discussed. The aim of the study is to investigate the historic and current issues of Russian soccer, the reasons for their emergence, and the present state. Furthermore, the commercial prospects and possibilities for local football’s business development are inspected. Potential solutions to the outlined problems are demonstrated as well. Finally, the investment climate for the clubs and the league as a whole is briefly examined. The research is based on secondary data collected from public sources. Specifically, sport articles, scientific papers, journals, interviews, databases and financial statements are used. Overall, the thesis is set up on the grounds of profound desk research. It is concluded that in Russia, the national championship is far from profitable. Local soccer is plagued with specific issues that have hindered its economic development for a considerable time. The appearance of em- blematic problems can be traced to the Soviet times. Among the existing problems, the most striking one is the weight of government ownership and general political interference in Russian football. In addition, there is an issue of incompetent management of the league and questionable decision-making process. The in- come gained from the sale of broadcasting rights is also unacceptable for the sixth most powerful European league. Eventually, it is stated that whilst the actual business position of Russian football is extremely trou- bling, there is undeniably an open room for growth. Despite all the issues, a clear path for improvement can be seen, but the government and soccer organizations must take decisive actions to save the situation ur- gently. Keywords Football, soccer, sport, football industry, business, investment, management, Russia, Russian Premier League 3 (70) CONTENTS 1 INTRODUCTION ................................................................................................................ 4 2 THEORETICAL FRAMEWORK .............................................................................................. 5 3 BREAKDOWN OF RUSSIAN FOOTBALL CHAMPIONSHIP ...................................................... 15 3.1 History of Russian football ....................................................................................................... 15 3.2 Football in Russian Federation ................................................................................................. 20 3.2.1 The structure of Russian championship ........................................................................ 21 3.2.2 Athletic and financial perspective of the Russian Premier League ................................... 23 3.2.3 Main issues of Russian football ..................................................................................... 30 3.2.4 Main perspectives of Russian football ........................................................................... 54 3.2.5 Investment (sponsorship) climate ................................................................................ 57 4 CONCLUSION .................................................................................................................. 61 5 DISCUSSION ................................................................................................................... 63 REFERENCES ........................................................................................................................ 65 4 (70) 1 INTRODUCTION Without a doubt, football, known as soccer in North America, remains to be one of the most influential sport games in the history of humanity. Arguably appearing in historical records thousands of years ago, it has managed to evolve considerably and withstand the challenge of time. Football in its modern variation originated in the nineteenth century in the British Empire. Since then, the game has promptly spread through the international borders and secured its rightful place as a mass phenomenon. Up to this day, soccer continues to captivate billions of sports enthusiasts all over the globe. Football has achieved great recognition, and it is now considered the most popular sport in the world (Dvorak, Graff-Baumann, Junge & Peterson 2004). Logically, as the game evolved, so did the businesses capitalize on football’s gigantic fanbase. Soccer has changed drastically over the recent years, and present-day professional football clubs might now be described as complex businesses concerned with financial matters (Morrow & Howieson 2014). Due to clubs’ rapid economic progress and grow- ing public interest in the sport, numerous football federations have built their regular championships to become sustainable business projects. Basically, soccer leagues may be rightfully classified as separate commercialized industries. However, certain football tournaments perform much better than their competitors in a business sense. In this work, the Russian Premier League in particular is discussed. The aim of the study is to investigate the historic and current issues of Russian soccer, the reasons for their emergence, and the present state. Furthermore, the commercial prospects and possibilities for local football’s business development are inspected. Potential solutions to the outlined problems are demonstrated as well. Finally, the investment climate for the clubs and the league as a whole is briefly discussed. The research is based on secondary data collected from public sources. Specifically, sport articles, scientific papers, journals, interviews, databases and financial statements are used. Overall, the thesis is set up on the grounds of profound desk research. 5 (70) 2 THEORETICAL FRAMEWORK To start with, it is essential to present an overview of the academic theory involved in the selected topic. The established theoretical framework begins with broader concepts, but it is then narrowed down to more specific knowledge the research is supported with. Before football in particular can be discussed, it is necessary to provide the insight on sports in general. Firstly, the meaning of the term “sport” must be addressed. The outcome of the examination of the thematic papers in which the conception of sport is analyzed shows that there are notable differences in how the terminology is described in the academic world (Sutula 2018). At the present time, several definitions of the word can be quoted. Shilling (2005, 101) stated that the expression “sport” must be used to characterize the activities and games that have become a competitive race between teams and individuals. However, numerous scholars agree that modern sport is a significantly more complicated item, and a uniform definition cannot be offered. As such, other researchers like Lev Mat- veev proposed that the contemporary sport should be identified “in the narrow and in the broad scopes” both. According to his book “The general theory of sport and its applied as- pects,” sport in the narrow sense means the athletic competition activities exclusively. In deeper implication, on the other hand, sport should be viewed not only as a competitive activity, but as the entire process of preparation for sporting achievements, and its inter- specific influence on society as a whole. Therefore, the latter argument suggests that sport has diverse functions not necessarily related to pure athletic performance. (Matveev 2005, 384.) Both approaches have the right to exist from academic perspective. Consequently, it is considered that the precise wording of the definition has not found universal acceptance (Dreher 2005, 257). Nevertheless, as the thesis investigates into the business side of football and sports, the second concept is acknowledged by the author. In this context, the roles of sports should be introduced. Following the classification pro- vided by Alapartanen and Kelly (2016, 11-13), sport plays various functions in several ar- eas. The figure below illustrates the roles attributed to sports by the cited researchers. Given the direction of the research, the emphasis should be put on the economic function of sports. The authors believe that sport now has a substantial impact on such

Load more