Why sports sanctions against Russia will hurt

 

by Tim Harcourt

 

Remember the old adage ‘don’t mix sport and politics’? The recent crisis in Ukraine has put paid to that with Russia targeted in terms of sport as much as in economics and diplomacy in terms of sanctions.

 

It started with ‘the beautiful game’ soccer or association football. Saint Petersburg was stripped of the Champions League Final by UEFA, Russian gas giant Gazprom has been banned as a sponsor of the tournament and of football clubs. Targeting the country and the sponsorship has occurred after numerous investigations have found that Russian oligarch money has made the beautiful game not so beautiful.

 

Even so soccer’s world body, FIFA was slow out of the blocks and pretty reluctant to act given Russia’s financial influence on the game. After trying a typical FIFA-like compromise, inviting a team from the ‘Russian Football Union (RFU)’ (like the athletes competing in the Olympics under the Russian Olympic Committee, ROC banner) the Zurich-based body was forced to ban both Russian men’s and women’s teams from their respective upcoming World Cups.

 

Even more interesting are the developments in London where English Premier League (EPL) club Chelsea’s owner Roman Abramovich, a Russian oligarch with close ties to Putin, has quickly handed over the reins to its charitable foundation in a pre-emptive move. Abramovich has even ‘offered’ to broker peace between Russia and Ukraine, but may face possible bans from the EPL.

 

And in the Olympics, in an unprecedented move, the International Olympic Committee (IOC) has banned athletes from Russia and Belarus from participating and stripped Russian President Putin of his Olympic order. And in an embarrassing back flip (usually not seen by a skilful Russian gymnast) the IOC has reversed its decision to let Russian and Belarus compete in the upcoming Beijing Winter Paralympics.

 

Similar moves are afoot to ban Russian tennis players from the international circuit, Russian swimmers from FINA and Russian drivers from F1 Grand Prix events. Russia has already lost the 2022 F1 Grand Prix in Sochi.

 

So are these moves to sanction Russia tokenistic? No, these are serious moves. After all, sport is the one area where Russia is still a super power as it was back in the glory days of the USSR. After all, it hosted the Sochi Winter Olympics in 2014 (at great expense) and then four years later, the 2018 FIFA World Cup after winning the bid in dubious circumstances. As sports historian David Golbatt said in his excellent book The Age of Football – Soccer and the 21st century:

 

‘The World Cup bid was so slick, that while the British Prime Minister, the heir to the throne and David Beckham humiliated themselves for England in front of the FIFA executive committee, Vladimir Putin did not even show up in Zurich until the victory had been announced. Later down the line, when investigators [from] both FIFA and Swiss legal authorities came looking for the bid committee’s digital archive, they were informed that the entirety of its computers, leased for the occasion had been incinerated.’

 

The Sochi Winter Olympics that preceded the World Cup were also seen as a chance for Russia to flex their muscles like they were back in the USSR. Anticipating the Winter Games of 2014, to be held on Sochi, Putin reminisced, ‘We have strong memories of the emotional, uplifting enthusiasm we felt during the 1980 Moscow Olympics. The mighty, inspiring spirit of the Olympics is once again, returning to our nation.’

 

But it cost a lot. Russia spent around $50 billion (A$71.5billion) on Sochi 2014 due to the extravagant ceremonies, expensive infrastructure with newly built stadia plus the cost of security given the then 2014 Ukrainian crisis in Crimea. On the field (or on the rinks and slopes) Russia did win a swag of medals but this was overshadowed when Russian whistle-blower Grigory Rodchenkov revealed widespread doping practices taking some gloss off the glorious Russian performance. This put a dent on the legacy of Sochi but Russia still had to foot the bill, which it could due to the high oil and gas prices it was earning at the time. Europe was paying for Russian gold medals, via natural gas purchases, some of which were won illegally, as the anti-doping authorities found out.

 

In summary, putting sports sanctions on Russia is the final blow to their former Soviet-like super power status, not to mention the favourite play-things of the Russian state and the Russian oligarchs. In short, sport is power. sport is business. And sport is politics.

 

 

Tim Harcourt is Industry Professor and Chief Economist at IPPG at University of Technology Sydney (UTS) and host of The Airport Economist, The Big Picture – After the Pandemic

 

 

 

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Comments

  1. Well said. Agree with everything you’ve written Tim. The oligarch’s money all originates in the corrupt sale of strategic assets (oil, steel, mining etc) by Yeltsin at the time of the breakup of the Soviet Union. Putin inherited it and then built on it through grace, favour and ruthless enforcement.
    “Behind every great fortune is an equally great crime” Balzac.
    Oleg Deripaska (now down to his last US$3B – down from $30B) forced by Putin to tip in $800M to build a Sochi sports complex for the 2014 Winter Olympics. While the sanctions on Russian wealth are welcome the oligarchs have their wealth well hidden in shell companies etc. They have been well prepared for this time and the western legal system works glacially to enforce criminal property confiscation.
    The geopolitical and economic fallout from the Ukraine war will be immense and is not yet visible. Oil and gas prices ($3 a litre). Nuclear power options. Slowing the move away from coal if gas is not a reliable alternative in Europe and Asia.
    Strange international bedfellows. Imran Khan was in Russia shaking Putin’s hand 2 weeks ago to seal a deal for Russian gas and wheat. We play cricket with Pakistan while they fund Russia’s war. Necessity makes cowards of all of us. Israel is nominally “pro western” but does deals with Russia to block the US renegotiating the Nuclear deal with Iran – because the West needs Iranian and Saudi oil increases to moderate the cost. $3 a litre petrol by the end of the year?
    Russian aggression has pulled out a foundational piece of our interconnected world – supply chains, energy, food, defence & security, currency values & interest rates – even sport – and the rest of the world is going to feel the adjustment pains for years to come.

  2. Results of my Twitter poll (extremely unscientific; small sample – but I suspect representative).
    What would you like back from last week:
    – Warney (70%)
    – Marshy (0 – pre social media – old & forgotten)
    – Ukraine (30%)
    If I’d added “Dry land in eastern Australia” I suspect “Warney” would still have won.
    And we complain about the quality of our leaders. I think they follow and echo our self absorption. We don’t like them because they remind us of our worst qualities.

  3. Sports-washing.

    And Russia are certainly not the only country in this boat.

  4. I don’t doubt the sport sanctions will have some impact. One only has to look back to the example of South Africa and apartheid. In my view, the sport sanctions on that country were a significant influence in the eventual collapse of apartheid. Not the whole reason, but I reckon the average white South African was deeply hurt by them and pressured the Government accordingly.

  5. Unfortunately the average Russian doesn’t have much say about their government. And State media prevents them knowing what is happening in Ukraine. A few cancelled soccer games in World Cup & Europa league will have to be explained, but otherwise most Russian sport is local not international. I don’t sense that individual Russians like tennis players or soccer players for overseas clubs will be banned.
    Probably the effect of the falling ruble on local food prices and goods availability will hit locals first. The parents of the 5,000 dead Russian troops probably believe their sons are “still on manoeuvres”.
    Layers of security around Putin prevent anything affecting him in the short term.
    https://www.nytimes.com/2022/03/08/opinion/putin-ukraine-russia-war.html

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