For years, Russia's Gazprom not only delivered energy to much of Europe but splurged millions on sports sponsorship deals, especially soccer, on the continent as well.
Its logo was featured at Europe's top club soccer tournament and adorned the jerseys of one of Germany's most storied clubs, FC Schalke 04.
It was all part of an effort not only to burnish the company's image but perhaps blur its ties to the government of Russian President Vladimir Putin.
But business largely dried up for the state-controlled firm after Putin ordered his troops into Ukraine on February 24, 2022. Sales in Europe have collapsed, and Gazprom just reported its first annual loss.
Besides balking at its energy, Europe has called a timeout on sponsorship deals with Gazprom amid a wider boycott of Russian sports teams and athletes.
But not all of Europe is on board.
Red Star Belgrade, a soccer powerhouse in Kremlin-friendly Serbia, has refused to cut its ties to Gazprom.
And now FC Ferencvaros, the top soccer team in Hungary, a country that also often sides with Putin's Russia, is reportedly on the verge of their own lucrative sponsorship deal with Gazprom.
Soccer And Geopolitics
As Russia finds itself facing growing international isolation, Hungarian Prime Minister Viktor Orban has done little to upset the Kremlin. The nationalist leader has refused to supply Ukraine with weapons and not allowed their transfer across the Hungarian-Ukrainian border. The Hungarian government has lobbied heavily in the EU to be exempted from any sanctions imposed on Russian gas, oil, or nuclear fuel, and has also threatened to veto proposed EU actions against Moscow.
"There is no doubt that Gazprom's potential sponsorship of Ferencvaros is a political move, probably intended to entice Hungary's government still closer to Moscow," said Simon Chadwick, professor of sport and geopolitical economy at France's Skema Business School.
"Gazprom sponsorship deals are rarely transactional. They are almost always geopolitical," Chadwick added in e-mailed remarks to RFE/RL. Blikk, a Hungarian tabloid that broke the story, reported that talks on such a deal between the two were an open secret.
Neither club has commented publicly on such speculation, which has been reported by other media.
Asked about the potential deal, the Hungarian Foreign Ministry told Bloomberg: "The more international companies that invest in Hungarian sports the better."
The Hungarian Foreign Ministry did not respond to calls or e-mail requests for comment by RFE/RL.
Contacted by RFE/RL, UEFA, the soccer governing body for Europe, deferred from directly commenting on the reports.
"UEFA decided to terminate its own partnership with Gazprom. Clubs remain responsible for their private contractual agreements with their sponsors," UEFA said in a statement to RFE/RL.
Gazprom, majority owned by the Russian government, is essential to the Russian economy as it is the largest company in the country and one of the globe's biggest producers of natural gas.
Gazprom has not only proved a cash cow for the Kremlin but a political cudgel as well. The Kremlin has enticed governments with the promise of pipeline contracts or wielded the threat of price hikes or turning off supplies to try to score political concessions.
Hungarian Champions
The report by Blikk was slim on details but filled with speculation about how the potential Gazprom gravy train could enrich the club.
"Knowing Gazprom's financial capabilities and previous sponsorship deals, the Russian company can provide support that will significantly increase Ferencvaros's budget," Gabor Szabados, a sports economist, told the tabloid, adding it could be a "game changer" for the club.
Gazprom deals are nothing like beer or burger sponsorships, Chadwick said.
"Gazprom typically pays above the prevailing market rate, which makes signing a deal with the corporation especially attractive for teams in need of money," he said.
Founded in 1899, Ferencvaros, the runaway leader in the Hungarian top-flight league this season, is set to win its sixth straight and 35th overall national soccer title. That success on the field has translated into profits, especially as the club has done well recently in UEFA club competitions. Ferencvaros made 3.4 million euros ($3.7 million) last season, Vilaggazdasag, a Hungarian business online newspaper, reported in August 2023.
Now in the black, the club was bleeding red not too long ago. In 2006, Ferencvaros was kicked out of the country's top league for the first time in its history just three days before the start of the new season. That came amid reports of mounting debt at the club, estimated at the time to be more than $10 million. The club's financial woes attracted the attention of outside investors sniffing an opportunity.
In 2008, Kevin McCabe, the owner of English club Sheffield United, won a tender to buy the team's real estate, including its stadium in central Budapest for the equivalent of $16.9 million based on exchange rates at that time. His ties to the team, however, ended in 2010, when he sold his majority stake in the club.
An association now controls Ferencvaros, the Ferncvarosi Torna Club, which is made up of 168 members of the club, many with ties to the ruling Fidesz party. The team president is Gabor Kubatov, a member of parliament for Fidesz since 2006 and also a former party campaign manager who was linked to controversial efforts by Fidesz to maintain a database on voters for several years, known as the "Kubatov list."
Given Kubatov's links to Fidesz and his close ties to Orban, it's perhaps not surprising that a lot of money linked to the state has made its way to Ferencvaros.
"Different ministries of Orban's government continuously provide state aid to the association, which opaquely transfers most of it to the football club," said Janos Kele, a Hungarian sports journalist, in comments to RFE/RL.
In the Blikk report, no figures were mentioned for a possible sponsorship deal, but it did mention such a deal could eclipse the one with Red Star Belgrade, which reportedly is now worth 5 million euros annually.
Saviors Of Red Star
Gazprom has been a sponsor of Red Star, one of the giants of southeast European soccer, since 2010.
At the time of the first sponsorship deal, worth an estimated $19 million over five years, Red Star was deeply in the red, reportedly having run up debts amounting to $25 million.
Red Star General Manager Zvezdan Terzic has said the club owes its continued survival to Gazprom.
"If it weren't for Gazprom, the question is whether there would be a Red Star. People who love Red Star will never forget what Gazprom did for the club," Terzic said in March 2022.
"We do not approve of what FIFA and UEFA have done to Russian clubs. There is no basis in international law. There is anti-Russian hysteria across Europe now," Terzic was quoted as saying by Britain's Daily Mail.
His comments came amid calls for the Serbian club to drop Gazprom as a sponsor. Instead of joining the ban on Russian teams and athletes, Red Star played an exhibition match against Zenit St. Petersburg, Russian league winners that year and financially backed by Gazprom, in the Black Sea resort of Sochi on July 3, 2023.
At the time the deal was being negotiated, Russia was also looking for partners for its now canceled South Stream natural gas pipeline project, Chadwick has noted.
Gazprom Gets The Red Card
In the immediate aftermath of Russia launching its war against Ukraine, its athletes quickly found themselves barred from major competitions. Athletes from Belarus, deemed to have assisted Russia with its war, also faced bans, but many of those have been lifted now. Russian athletes too have returned to competitions, but its teams largely remain excluded from international tournaments and cups.
UEFA ended its partnership with Gazprom on February 28, 2022, just days after Russia launched its full-scale invasion of Ukraine. Gazprom was a sponsor at the international Euro 2020 soccer tournament.
The Russian city of St. Petersburg was also prevented from hosting that year's Champions League final, which was due to be played at the Gazprom Arena. Built for the World Cup in Russia in 2018, the stadium was plagued by delays, corruption, and soaring costs. A deputy governor of St. Petersburg admitted his role in a 50 million ruble ($850,000 in 2017) scheme to siphon off the stadium's budget, although officials said the scope of the corruption was grimmer.
Gazprom started sponsoring the Champions League, Europe's -- and arguably the globe's -- premier club soccer event in 2012. The company's logo was splashed across the screen in every game broadcast on TV. The deal between UEFA and Gazprom was reportedly worth more than 40 million euros a year. The deal to sponsor Europe's club soccer showpiece competition had been renewed in May 2021 to run to 2024.
Gazprom may be out as a sponsor, but Aleksander Dyukov, head of the Russian soccer federation, is a member of UEFA's executive committee. Dyukov is also the head of Gazprom Neft, the oil branch of Gazprom, a post he has held for 17 years. He was also the president of Gazprom-funded Zenit St. Petersburg.
And while Britain sanctioned him almost immediately after Russia launched its war on Ukraine, neither the United States nor the EU has. Asked by RFE/RL whether it was proper for an executive of a company that helps fund Putin's war in Ukraine to sit on a UEFA committee, the European soccer governing body did not comment.
Schalke Says Auf Wiedersehen
At the same time as UEFA announced it was ending its deal with Gazprom, FC Schalke 04 also cut its ties with the company. Gazprom had been sponsoring Schalke's shirts since 2007, after a deal which former German Chancellor Gerhard Schroeder helped to facilitate. After leaving politics, Schroeder went on to work not only for Gazprom but other Russian energy firms, and as a result has faced fierce criticism.
As Gazprom courts Ferencvaros, the energy conglomerate is facing a sobering future and hemorrhaging money.
Gazprom announced on May 2 that it had lost the equivalent of $6.9 billion in 2023, its first annual loss in more than 20 years, as sales to Europe plummeted in the wake of Russia's war in Ukraine. According to EU data, the share of Russian pipeline gas that member states imported fell from 40 percent of the total in 2021 to about 8 percent in 2023.
While any potential deal with Ferencvaros would be a "tiny fraction of their revenues," said Jack Sharples, a senior research fellow at the U.K.-based Oxford Institute for Energy Studies, it would still prove useful, if just symbolically rather than practically.
"If this sponsorship deal goes ahead, the Russian motivation is to demonstrate that they have one friend in Europe, especially if we recall that their previous sponsorship deal with a football club in the EU -- FC Schalke 04 in Germany -- was terminated immediately following the Russian invasion of Ukraine."
