Is this Eastern Europe’s answer to City Football Group, Red Bull and the Pozzos?
https://theathletic.com/1732140/2020/04/09/pafos-cyprus-riga-latvia-ownershipTwo Eastern European investors, Roman Dubov and Sergey Lomakin, provide substantial financial backing and are involved in the ownership structures of three clubs: Latvian champions Riga, Cypriot top-flight side Pafos and third tier Russian team Rodina Moscow.
Lomakin's public profile is discreet, but he made his fortune in Russian retail. Dubov, born in Hungary, has wide-ranging business interests in sport, most notably across Formula 1, the World Rally Championship, the Spartak Moscow ice hockey team and snooker.
Dubov was previously part of the CSI consortium that owned Portsmouth 10 years ago but frontman Vladimir Antonov was forced to step down due to legal proceedings in Lithuania. Dubov, who was not accused of any wrongdoing, says: “I met a lot of good people and they worked with me since. Michael Appleton helped me in Paphos and Steve Cotterill in Riga. One of the commercial directors helped me at Spartak's ice hockey club. It was a good experience. They deserve good ownership and to be in a higher position."
Jeremy Steele, whose time at Portsmouth came prior to Dubov's involvement with the club, is sporting director of Riga, Pafos and Rodina.
What is the opportunity identified here?
Dubov explains: "We seriously believe football is undervalued and not many people run it like a professional business, particularly in Eastern Europe. We see the opportunity to do it well. Historically in Eastern Europe, most sport was subsidised by governments, by the unions, rather than running it like a business company. It is why so many clubs have struggled over the past 10 years. There is an opportunity."
Is it fair to say, therefore, that clubs from the old Soviet Union are still playing catch-up, some 30 years on from the fall of the USSR?
"Yes, I think so," Dubov says. "If we talk about Russia, Ukraine, 80 per cent of the clubs are heavily subsidised by the government, and 70 per cent of the budget of those clubs is subsidised by the government. Sport is run like a charity organisation rather than business.
"In the old Eastern Europe, it needs another 10 to 15 years to go to the next level. I don't think there will be big opposition to more privatisation.
It is more that television rights are not so high, ticket and gate receipts are not so high, so there will not be many brave people willing to take these clubs on. Zenit St Petersburg are privately owned by Gazprom, so it will be difficult to buy them out. Lokomotiv Moscow belong to the Russian Railway, so is still part of the Russian infrastructure. We think, therefore, that the best way is to invest in and grow small clubs in the second or third division. Krasnodar were taken over from nothing and over the past decade they built one of the most popular clubs in Russia, but it is more exceptional than normal.
"We are on a smaller scale. We are covering the markets we know. We understand the potential. There are, for example, only six or seven professional academies in Russia. We want to develop young talent. At Rodina Moscow, we play in the lower division, but the oldest player is 23. We give the opportunity for younger players to play. They are in the middle of the table (eighth of 14) and doing really well."
Dubov ads: "Currently they are three different ownerships for the three clubs, but we are trying to find a way to manage it as a group. As part of a group, you save costs in scouting and management and it is easier to sell sponsorship through the group, as there is greater coverage. We only do it from the commercial side for now. We are working closely with lawyers to sense opportunities, to build a group."
And Pafos? "Many reasons," Dubov begins. "First of all, the weather is good and the pitches are good, so you can train all year. On the pitch, you can have 11 foreigners playing, whereas normally there are rules about homegrown players. The important point, also, is the tax from PAYE income is only 11 per cent, so it is manageable. And then, it is also a place that is more simple to adapt for players from South America and Africa. The Cypriot people are friendly, the climate is similar, there is no racism, it is simple for everyone."
Dubov says: "I can say that for African players, when you get to Riga, it is quite cold, the people have different characters. There are less smiles and people feel a bit less comfortable. In Cyprus, people smile more, they are very helpful and do not have any issues with any personalities."
He is sporting director of the three clubs, but Steele has been primarily working on Paphos in his first season in the job. "Pafos is the club the owners want me to focus on," he says. "I have been here since August and tried to build it up. They have invested in training facilities. They built a new gym on the side of the building. There was not much there before. There is a new first-team facility, they renovated the academy building. The investment has gone into pitches, which have all been redone.
"We have agreed with the owners that, yes, OK, it is good to have experienced players. For older players coming to Cyprus, the average age of the league is over 30, I don't think players mind. The number of games is fewer, obviously compared to the Championship toll of midweek games. Here it is one game a week and the island is not big and the longest trip is 90 minutes.
"It is a very attractive proposal: it is sunny every day, nice beaches. But we need to find a way to buy young, talented players to grow with the club and if they go on and get sold for a profit and a return investment, then they have done their job and we did our job."
