World Cup 2018: can one billionaire save Russian football?

World Cup 2018: can one billionaire save Russian football?

On a chilly night in early February, Real Madrid came to southern Russia for a winner-takes-all game against local upstarts FC Krasnodar. With Sergei Galitsky, Krasnodar’s billionaire owner, watching from the stands, a sellout crowd of 34,000 waving green-and-black scarves cheered as the home team took the initiative against the Spanish giants.

Playing the quick passing game that Galitsky has made the club’s signature style, Krasnodar dominated possession and came close to winning the game — before finally cracking under the pressure of a penalty shoot-out. Yet going the distance against such illustrious visitors was an impressive feat: particularly since this was a youth game at a club that didn’t even exist when the teenagers on the field were born.

Playing Real Madrid in Uefa’s Youth League is one thing. But if Galitsky gets his way, Krasnodar will soon be repeating the feat in the Champions League, Europe’s top club competition. After pocketing $2.45bn this year from selling most of his stake in Magnit, the low-cost supermarket chain he founded 20 years ago, Galitsky is devoting himself to turning Krasnodar into a football powerhouse.

He isn’t the first Russian to splurge on a football team. Yet instead of splashing out on expensive foreign signings or buying a club in England, Galitsky dreams of winning trophies with a side made up entirely of local players.

FC Krasnodar owner Sergei Galitsky (left) with head coach Murad Musayev © Alexander Gronsky

In an era of super-agents and nine-figure transfer fees, it seems an impossible goal. To put it in perspective, even Barcelona have only once fielded a first 11 of players from their famed La Masia academy in recent history. But Galitsky, 50, is undeterred. He started Krasnodar from scratch in 2008 and has since spent $90m on state-of-the-art facilities at the club’s training ground, where 320 youth team prospects live full-time and a further 11,000 children from across the region play on 27 pitches.

If he succeeds, it would be a huge boost for Russian football, which is in a sorry state on the eve of hosting a World Cup tournament that will be watched by a global audience. The national team are widely regarded as the worst the country has fielded since the USSR collapsed. In the latest Fifa rankings, they lie in 66th position (of teams at the World Cup, only Saudi Arabia are ranked lower). Their preparations have not been helped by disputes between the coach Stanislav Cherchesov and several of Russia’s best players. Such is the absence of young homegrown talent coming through that a naturalised Brazilian, Mário Fernandes, may have to start in defence alongside the 38-year-old Sergei Ignashevich. Fans are fretting that the team will fail to get past the group stage — an embarrassment that has previously befallen only one host nation in the tournament’s history.

Off the field, two teams from last season’s Russian premier league are on the verge of bankruptcy. Half the new World Cup stadiums won’t be hosting top-flight matches next season. Some are in cities such as Sochi and Saransk, which have powerful officials lobbying for their interests but lack the infrastructure to support a serious football team.

Children playing football next to FC Krasnodar’s $300m stadium, based on the Coliseum © Alexander Gronsky

Could Galitsky’s methods offer a potential route out of the mire? With his young club yet to win a major trophy, the owner has been careful to play down his achievements: he has given no interviews for several years and declined to talk to the FT for this article. Occasionally, however, he appears on television to plug his vision for the future.

“All these horrible stories that we should give away our best footballers so foreigners watch them instead of us . . . that it’s the wrong league and the wrong people — it’s a complete disgrace,” he said in April after he replaced the club’s experienced coach with Krasnodar native Murad Musayev, the 34-year-old youth team manager.

“I don’t want any [Thomas] Tuchels or any other foreigners,” Galitsky said, referring to the German manager recently hired to run France’s leading club side Paris Saint-Germain. “Murad’s from Krasnodar, and that’s very important — we’ve lost our national identity.”

While few in Russian football disagree with him, Galitsky’s criticisms have touched a nerve among the powerful interests that run the country’s game. Apart from Krasnodar, only four other Russian premier league teams are privately owned. Several regional governments who own football teams have attempted to sell clubs to local investors and failed. “There’s only one Galitsky. Nobody will buy a club and run it their whole life. Sponsorship is one thing, but to run a team you need someone who has lots of money and loves football enough to spend it on,” says Anton Alikhanov, governor of Kaliningrad, the city that will host one of England’s World Cup games despite the local team, Baltika, having spent 20 years outside the top division.

The club’s state-of-the-art football academy © Alexander Gronsky

Kirill Dementiev, a sports commentator on state TV who socialises with Galitsky, is one of those who believe other clubs need to follow his example. “We needed to do what Galitsky did but nobody ever tried,” he tells me. “Now Galitsky has shown it can be done. We need to make the Krasnodar model apply to the whole country.”

Galitsky, a tall, wiry man with a sharp nose and a bowl of whitening hair, is a life-long outsider. He grew up in Lazarevskoye, a suburb of Sochi, as Sergei Arutyunyan, then changed his father’s Armenian surname for his wife’s. After university, he worked in a bank and traded cosmetics before opening his first Magnit store in Krasnodar in 1998.

“Obviously we had problems all the time. For example, after we set up in one city and refused to pay [protection money], someone put a funeral wreath on the door of my flat with a note signed ‘from the local brotherhood’. Someone fired a grenade at our office. Some people came to one of our stores with automatic weapons,” Galitsky told an interviewer in 2011.

But by 2008, Magnit was the second-largest Russian retail chain, largely eschewing Moscow for Russia’s provinces, and had gone public in London. Galitsky attributed the company’s rise to his hard work on details. To counter Russia’s long distances and terrible roads, he set up logistics systems that tracked Magnit stores’ stock in far-flung cities while calculating the perishability of replacement supplies. At one point, Magnit lowered the price of bananas by a single rouble and increased sales by 100 tons a day.

All the while, it remained based in Krasnodar, an unglamorous low-rise city with worse traffic than Moscow. An outsider mentality seemed to drive Galitsky. He became one of very few Russian businessmen who built a fortune from scratch without privatising national resources on the cheap or leveraging political connections. He was one of the only ones who lived outside Moscow too: he boasted of never having been to St Petersburg and said he found it difficult to spend more than a week at a time in Europe.

One thing he did have in common with the oligarch class — apart from his yacht — was his love of football. Inspired by Pep Guardiola’s all-conquering Barcelona team but convinced Krasnodar could aspire to something even better, Galitsky urged them to play intricate football on pitches in no better state than Russia’s roads. Matches would regularly end 5-3. “Krasnodar would take the game to teams. If they didn’t, Galitsky would say, ‘Why are we playing like this?’” recalls Danil Shepetina, an early Krasnodar supporter.

Academy manager Aleksandar Marjanovic © Alexander Gronsky

Nearly a decade on from those formative days, the coach responsible for running Krasnodar’s all-important academy is Aleksandar Marjanovic. With its leafy alleyways and gleaming green-and-grey buildings, the complex looks more like a Silicon Valley campus than a football training ground. Children train on equipment that includes one of the world’s few German-made Footbonauts, a $3.5m robot that fires footballs at players to hone their reactions and control.

Where other Russian teams scout for youth prospects across the country, nearly two-thirds of Krasnodar’s are local. The academy gives them a full secondary education, including courses in foreign languages, mathematics and chess, Galitsky’s other passion. Tahir Kholikberdiev, a local chef who is one of the club’s most prominent supporters, says: “A lot of parents want their kids to go to the academy — even if they don’t make it as professional footballers, they’ll still be smart, well-rounded people.”

Marjanovic, a Serb, agrees. “This is a dream. The boys don’t realise they’ve wound up in the best place possible.” In three to four years, he thinks “14 or 15” of Krasnodar’s first-team squad players will be academy graduates. “Six years ago we went 4-0 down to Inter Milan in the first 20 minutes. Now it’s a different story.”

Ten years ago, Russian football was on a high: the national team reached the semi-finals of Euro 2008, Zenit St Petersburg won the Uefa Cup, and the country was soon to gain the right to host the World Cup. This period is now seen as a lost decade. A quota mandating that clubs must field at least five Russians had a negative effect on homegrown talent, which stagnated on salaries far exceeding what they would earn in more competitive European leagues. “In the 1990s, there was no money. Then when it appeared, we perverted our players with big contracts and they didn’t progress. The way oil prices went up from 2003 to 2012 — we’ll never have that kind of money again,” says sports commentator Dementiev.

Galitsky’s Krasnodar, however, has taken the same cost-oriented approach that fuelled Magnit’s rise. Its status as one of the few financially stable clubs in the country paid off in 2011, when Krasnodar were promoted to the premier league after a higher-placed team declared they couldn’t afford the financial burden and dropped out.

One of the city’s Magnit shops, the chain founded by Galitsky © Alexander Gronsky

Yet, like Magnit, Krasnodar went under the radar. After plans for them to hold World Cup games were dropped in favour of Sochi, Galitsky spent about $300m to build his own stadium in the style of the Coliseum in Rome. The ground opened in 2016 with a screen that wraps around the upper deck, a long array of columns and a high façade using the same type of stone as the Coliseum. A still-expanding park next to it, with spiral lawns, an amphitheatre that shows Krasnodar’s away matches and a skate park, fills up with families on weekends regardless of whether the team are playing there. Fabio Capello, the former England and Russia manager, has said Krasnodar’s facilities are the best in the world; Spain will train there between World Cup matches.

The atmosphere on match days is also very different from that introduced elsewhere by Russia’s infamous hooligan element. Only a few dozen “ultras” sing songs in the south stand, drowned out by a much larger group of children from the academy. Galitsky has even tried to ban swearing from the ground, rewarding well-behaved away fans with free tickets to the following season’s corresponding fixture, and reached out to Kholikberdiev, the chef, asking him to tone down his criticism of Krasnodar’s sluggish defensive midfielder Yuri Gazinsky.

A beefy man with two full sleeves of tattoos — including one of Krasnodar’s bull logo — and a chest-length beard, Kholikberdiev is one of the few Krasnodar fans who looks like a hardcore football supporter. Yet even he admits: “People support Krasnodar because we’re in the premier league. It’s a good brand.”

By 2014, Galitsky’s Magnit was Russia’s largest private company, worth more than $30bn. Yet in the months after the country’s annexation of Crimea, President Vladimir Putin banned most western food imports in response to sanctions, wiping billions off Magnit’s market value.

That summer, Russia’s top football club bosses met to discuss whether to admit Crimean teams into the Russian league. Keen to show their patriotism, but fearful such a move would invite sanctions that could jeopardise the World Cup, the club bosses fretted over whether to ask Putin what he wanted them to do.

Galitsky knew that voting in favour would make him an obvious target for US sanctions. He was prepared to sacrifice Magnit — but only on Putin’s orders. “I’d like to consult with number one. I won’t be ready to bury what I did for 25 years until after that,” he said, according to a leaked transcript of the meeting. “I’m ready to go to war for my country, but I’m not ready to stick my head out for no good reason.” Eventually, a separate Crimean league was set up as a compromise.

Children from local football schools attending a Krasnodar under-21 game © Alexander Gronsky

Instead, Galitsky wound up sacrificing Magnit this February at a discount in a state-backed private equity deal. Problems had been brewing for years. Investors complained that he had neglected day-to-day operations. Its share price dropped by half in the six months before Galitsky sold most of his stake to VTB, a Russian state bank.

Some whispered that the Kremlin had forced him out. “There’s nowhere closer to voters than low-cost supermarkets in the provinces,” said one businessman. “The next time there’s a crisis, they can just force them to take prices down.” But people who know Galitsky believe he had become so consumed by football that he lost interest in Magnit. “Retail is all about people and drive. They lost that,” says one of the bankers who took Magnit public.

With his business behind him, how far can Galitsky take his football dream? Even his admirers acknowledge Krasnodar will never have the financial power to compete with Europe’s super-clubs. “He’s a very tough negotiator and he’s very tight with transfers,” says German Tkachenko, who runs a sports management agency that represents Krasnodar’s Russian international striker Fyodor Smolov. “It’s very difficult to change his mind — but you need to pay to get to the next level.”

Tkachenko, previously a director of Anzhi Makhachkala, a lowly Dagestani club that briefly broke world spending records on the likes of star players Samuel Eto’o and Roberto Carlos, warns that Galitsky could become “a prisoner of his own idea with the academy. It’s an escape from spending more,” he says. “But he’s a genius. This is unprecedented anywhere.”

Smolov seems likely to leave for Europe after the World Cup. But at Krasnodar’s youth ground, the plan to develop the next generation of Russian stars is gathering pace. At the last game of the season in May, Galitsky watched as his under-21 team strolled to their first ever title. A crowd of 2,000, mostly made up of children from Krasnodar’s academy and their parents, cheered, then lined up to ask Galitsky for selfies. At the final whistle, the players threw their coaches into the air. Galitsky ran on to the field and posed for the team photo.

“They just won the youth league — in three to four years, they could win the Russian league,” Marjanovic says. But trophies are not what really motivates Galitsky. “He lives with these kids. He’s known them since they were 12. You can’t buy that kind of happiness.”

Max Seddon is an FT correspondent in Moscow. He thinks France will win the World Cup but would like to see a dark horse such as Croatia or Colombia win

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