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SBD Global/February 14, 2014/Marketing and Sponsorship

Russian Football Club Alania Vladikavkaz Bankrupt After Sponsor Pulls Out

The Russian second-tier football club Alania Vladikavkaz, based in the Caucasian region of North Ossetia, is to be liquidated after its sponsor, the hydroelectricity company RusHydro, pulled out of a $40M-a-year deal. RusHydro said its decision came after North Ossetia's government, which owns the squad, refused to make the company its majority shareholder. “The company fulfilled its financial obligations [before Alania] in full,” RusHydro said in a statement. “To continue cooperation, some conditions needed to be implemented, particularly the incorporation of the club, with the controlling share transferred to the company, so that cooperation could graduate from charity to a business project.”

NO SPONSOR STEPPED UP: The government of North Ossetia was apparently unable to find another sponsor for Alania, which was on top of the second-tier table before the winter break and had good chances of returning to the Premier League, and the squad has submitted an application for pulling out of the league. Alania spent many seasons in the Premier League in the '90s and early 2000s and was the champion in '95 and runner-up in '92 and '96. The squad played in the Premier League in the '12-13 season and was relegated. In Russia, many football squads are owned by local authorities but funded by sponsors. There have been several cases when local and federal authorities bailed football squads out of financial troubles by encouraging businesses to sponsor them. Lately, however, businesses have been unwilling to pump their cash into sports teams.
Vladimir Kozlov is a writer in Moscow.
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