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Business and Football: Common Features
September 15, 2006 17:00


Every time when another football championship is over, fans all over the world reflect on highlights of matches and look forward to new sport events. But sometimes they don’t have to wait at all longing to see their favorites: since business companies and football clubs work together we are able to enjoy friendly matches any time of the year.

Russian company Renova, which belongs to Victor Vekselberg, accrued a right to conduct 24 friendly matches of Argentine national team during five years. Renova Group owns the stock of metallurgical companies, petrochemical plants, TV companies, etc. Vekselberg’ company contests sparring partners, determines the place of the game, sells broadcasting rights, sponsor contracts and tickets. Every new match brings the national team 750 thousand dollars.

The first match took place on September 3 in London at the Emirates stadium, new Arsenal Stadium opened in July, which seats 60 thousand people. Argentina played with Brazilian national team, five-time World Champion, and that were Brazilians who celebrated a confident 3:0 win. This match attracted fans from all parts of the planet.

The director of Sportima sports agency Maxim Belitsky noted that Argentina and Brazil are strong opponents and that’s why this game was such an enchanting sight. According to Global Sponsors commercial director Michael Sterling the broadcasting of Brazil-Argentina match must be the most interesting sport event after the end of the World Championship. It’s a classical football duel, and a striking start for new Renova project.

Generally speaking, this is the first contract Russian company tied up in a complicated show-business field, to be more precise – in football. Many people denounced this contract to be risky and unprofitable, but even now it is clear that there will be no loss. Taking the first match as an example one can see what the average income is. Renova shares this finance with the Brazilian national team sponsor and control games promoter, a Swiss company. The money obtained from selling broadcasting rights alone amount to 6 million dollars. That makes about 3 million for each company. But there also exists profit share from tickets and advertisements at the stadium. Thus, on the whole, the game brought about $10-12 million on a conservative estimate. So if one divides the profit into two parts, it will make up $5-6 million for each partner. Keeping in mind $750 thousand promised to Argentine national team one may come to six fold excess of return over investments. The first game showed how entertaining, thrilling and keen Renova’s new project is. Brazilian and Argentine national teams are masters of football. They couldn’t show their worth at the world championship and are longing for justification in fans’ and specialists’ eyes. According to a football observer “these teams swarm with celebrities like a tropical river with alligators”.

Turkish national football team will probably play with Argentineans next time, the negotiations are at the closing stage. Besides, Vekselberg’s company can bring Argentine team to Russia for a game or organize a friendly match in a neutral territory.

So now we see that a Russian businessman, a Russian company found an opportunity and funds, took a gamble on the money and signed a contract with Argentine national team. Hopefully, Russian players will rise to eminence in football (and here we shouldn’t forget our new football coach Hiddink) so that Russian businessmen would find it gainful to pay them $750 thousand for game as a share of profit from control games.

Sources:

    www.renova.ru
    www.svobodanews.ru
 

Olga Pletneva


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