Basketball Boom Sees Rising Payouts in Superleague
Published: April 1, 2005 (Issue # 1057)
A decade ago professional basketball players in Russia were about as confident as striking miners that they would receive their salaries.
But thanks to backing from big business, regional politicians and the Federal Security Service, top Russian clubs this season are awash in cash and readily paying top dollar to some of the best players in Europe.
"Ten years ago, players in Russia were just praying they would get paid by their clubs," said Reed Salwen, whose U.S.-based sports agency, Entersport, has represented more than 10 athletes playing professional basketball in Russia. "Some clubs would not pay their players at all, some would pay them late. You had players fighting with the management and agents filing lawsuits. Players were afraid to sign contracts. Now many of the best contracts in Europe are available in Russia."
As a result the Russian first division, a 14-team competition known as the Superleague, has become one of the strongest leagues in Europe and joined the Italian and Spanish leagues as perhaps the most lucrative options in the world for professional players outside of North America.
Just how much money is floating around the Russian Superleague is difficult to say. The details of players' contracts are as a rule not disclosed in Europe. Furthermore, Superleague clubs are notorious for keeping the size of their budgets under wraps.
But sports magazine ProSport estimated ahead of the 2004-05 season that the Russian teams would spend a total of $71 million this season.
In an informal survey conducted by The Moscow Times of 10 of the 14 Superleague clubs, including last year's top four finishers - CSKA, UNICS, Dynamo Moscow and Ural-Great - only one, BC Samara, would discuss its budget openly. A club spokeswoman said she hoped Samara could muster up a paltry $1 million budget for the season.
The top clubs spend far more. ProSport estimated CSKA Moscow's budget at around $20 million this season, likely making it the richest basketball club in all of Europe. CSKA has a major supporter in Mikhail Prokhorov, a basketball fanatic and controlling owner of Norilsk Nickel with Vladimir Potanin, with whom he is tied for the honors of Russia's seventh-richest man with an estimated fortune of $4.4 billion, according to Forbes. Prokhorov satisfies his basketball passion as the owner of a controlling stake in the club.
Even $20 million could be a conservative estimate, given that sources close to CSKA management said the club's budget last season totaled around $23 million and a CSKA executive said this year's budget is larger than last year's.
To put these numbers in perspective, the average budget for clubs in the Spanish first division, one of Europe's richest leagues, is around $7 million this season, according to a league spokesman. The league's smallest is around $3.5 million, while the largest is between $14 million and $18 million.
The CSKA executive, who spoke on condition of anonymity because of the sensitivity of the issue in a nontransparent industry, declined to give the size of the club's budget for last season or this season. But he said this year's budget is larger than last year's due to several factors, including CSKA's hosting of the Euroleague Final Four at Olimpiisky Stadium in Moscow on May 6-8.
The club is in the final year of a three-year project under general manager Sergei Kushchenko to win the Euroleague championship, the basketball equivalent of European soccer's Champions League.
CSKA, the two-time defending Russian champion and one of Europe's best clubs, has lost narrowly each of the past two years in the Euroleague Final Four. It has already made the European playoffs this year, and a glance at the club's roster shows it is sparing no expense to capture the championship in front of its hometown fans in May.
According to ProSport, CSKA has put up about $5.5 million for its six highest-paid players, with last year's Euroleague MVP, American guard Marcus Brown, topping the list with a $1.5 million contract.
The expensive talent has paid off so far. CSKA started off the season with 42 straight wins in Euroleague and Russian Superleague play. Its 18-game winning string in the Euroleague, going back to a victory in the third-place game at the Final Four last year, set a record for consecutive wins in European Cup games. The streak was snapped with a home loss to Barcelona on March 16, CSKA's only loss of the season so far.
Dynamo Moscow and Dynamo St. Petersburg, two clubs backed by the Federal Security Service, also are spending more freely this season.
Dynamo Moscow's budget is estimated at between $13 million and $15 million this year, ProSport reported, with American guard Lynn Greer and Turkish forward Mirsad Turkcan each earning more than $1 million.
The club made waves last year with a surprise third-place finish thanks to the financial backing of the Dynamo sports society's Moscow branch, headed up by FSB deputy director Viktor Zakharov.
Dynamo Moscow is currently in second place in the Superleague behind CSKA with three games left to play before the playoffs begin in late April. But the club crashed out of the ULEB Cup, basketball's equivalent of soccer's UEFA cup, in humiliating fashion to the Serbian club Hemofarm earlier this year, proving that big contracts do not necessarily add up to wins.
Dynamo St. Petersburg became the most financially transparent Russian club in recent history by publicly announcing its budget ahead of the season. Club president Vladimir Rodionov announced at a press conference that the budget would total $6 million, though he declined to name the sponsors.
Most of the other clubs, including top-flight clubs such as UNICS Kazan and Ural Great from Perm, are funded primarily by regional governments.
But despite business and political patronage, no one is under the illusion that professional basketball in Russia is a profitable business.
"It's not a business yet," the CSKA executive said. "It's closer to long-term social projects and image campaigns for investing companies."
This leaves most clubs vulnerable to the whims of the companies or regional governments that fund them. Ural Great, for example, has faced a reduction from last year's budget of $5 million due to the loss of its club president, former Perm Deputy Governor Anatoly Tyomkin.
Tyomkin followed former Perm Governor Yury Trutnev to Moscow in March 2004 when Trutnev took over as natural resources minister in President Vladimir Putin's government reorganization.
"Tyomkin went to Moscow, and that affected our fate accordingly," Ural Great spokesman Yevgeny Permyakov said.
UNICS Kazan has an estimated budget of $9 million this year.
Kazan, the capital of Tatarstan, also has a professional hockey club supported by the regional government. The Kazan club, Ak Bars, has an estimated budget of $50 million and has attracted an array of NHL stars freed up by the NHL lockout.
The money invested in professional basketball in Russia is still small compared to hockey and soccer, despite the rising popularity of the sport. Hockey clubs in the Russian Superleague had a combined budget estimated at $255 million this season.
Officials from several Superleague clubs say that the financial stability of the basketball league will depend primarily on the overall economic situation in the country.
But for this season, at least, players know they have found a real cash cow.
Argentine center Ruben Wolkowisky told sports daily Sovietsky Sport that he chose to sign with the Russian club Khimki, in the dreary Moscow suburb of the same name, after declining offers from NBA clubs.
"I had a pretty good offer from the NBA," said Wolkowisky, who ProSport reported will earn $600,000 this year. "The Indiana Pacers wanted me. But Khimki offered me conditions that were even a little bit better."