The End of Anzhi (But Not Financial Imprudence)

Anzhi-Arena in Makhachkala, Dagestan. Photo courtesy of FC Anzhi Makhachkala.

Anzhi-Arena in Makhachkala, Dagestan. Photo courtesy of FC Anzhi Makhachkala.

After two-and-a-half years and hundreds of millions of dollars spent on what would have been the most spectacular example of financial influence in European soccer, it appears that Russian billionaire Suleyman Kerimov has folded on Anzhi Makhachkala.

When Kerimov purchased his hometown team in January 2011, it looked like an attempt to emulate fellow oligarch Roman Abramovich, whose wealth transformed Chelsea from a perennial mid-table side to champions of England almost overnight. It also followed the now-exhausted trend of “Richer Than God” owners like Abu Dhabi United Group and Qatar Investment Authority buying clubs like Manchester City and Paris Saint-Germain, respectively, in the hope of turning them into European powerhouses.

But what made Kerimov’s Anzhi experiment so audacious was the sheer magnitude of the task at hand. Located in the capital of the Russian republic of Dagestan, an area of noted conflict and unrest, the club itself has only existed since 1991. Perhaps the most cited example of the absurdity of Kerimov’s aspirations is that the club’s players actually live and train in Moscow, making an extraordinary 1,250 mile flight to Makhachkala for home matches played before a heavy security presence.

None of that appeared to matter to Kerimov or the players who would be drawn to Anzhi by his riches, however. In the months following Kerimov’s takeover, he signed then-37-year old Brazilian legend Roberto Carlos and gave him keys to a $2 million Bugatti; lured Yuri Zhirkov from Chelsea and Mbark Boussoufa from Anderlecht; and, in his marquee statement of intent, signed Inter Milan’s Samuel Eto’o to a contract worth roughly $500,000 a week.

The spending spree continued through 2012, with Kerimov spending millions more on Blackburn’s Christopher Samba, Real Madrid’s Lassana Diarra and Russian rival FC Kuban’s Lacina Traore. The record purchase came this past January, when Anzhi shelled out roughly $47 million to Shakhtar Donetsk for Brazilian winger Willian. It was all good for a third-place finish in the Russian Premier League last season and a Europa League berth.

Along the way, Kerimov set about reconstructing Anzhi’s inadequate stadium, which cost hundreds of millions of dollars and reopened in June to an extravaganza featuring Cher and Jean-Claude Van Damme. But on August 7, after managing only two points from their opening four games of the new Premier League season, Anzhi sacked manager Rene Meulensteen after 16 days on the job and released an “Information message about the club’s development.”

“It must be admitted that the steps taken earlier, which aimed at the fastest achievement of the maximal sports result with the involvement of big signings, were of no success,” the statement read. “The team building will be based on a long-term perspective of the club development that, indeed, implies concrete changes to the personnel staff.”

From the statement alone, it sounded as though a combination of Anzhi’s poor form and the consequences of Kerimov’s spending on the club’s Financial Fair Play requirements had prompted drastically scaled-back ambitions. But the reality almost certainly revolves around the dealings of Uralkali, the multibillion-dollar mining company in which Kerimov holds a sizable stake.

The severing of a trade agreement between Uralkali and Belarusian company Belaruskali, which had effectively served as a potash price-fixing cartel, sank Uralkali’s share price and saw the company lose roughly 30 percent of its market capitalization. BBC’s James Appell reported that Kerimov lost roughly $500 million in net worth as a result of Uralkali’s plunge.

It seems inconceivable that the fortunes of one of Kerimov’s main business interests taking a turn for the worst is not connected with the cost-cutting and asset-stripping that Anzhi is currently undergoing. In the aftermath of the club’s statement, chairman Konstantin Remchukov announced that Anzhi’s astronomical, $180 million annual budget would be slashed down to between $50 million and $70 million a year. Rivals Dinamo Moscow have already taken advantage of the firesale, with a packaged deal consisting of Zhirkov, captain Igor Denisov and forward Alexander Kokorin. Zenit St. Petersburg have snapped up midfielder Oleg Shatov, while Boussoufa has left for Lokomotiv Moscow. And the biggest deals are almost certainly yet to come, with Liverpool and Tottenham battling it out for Willian and Chelsea lining up Eto’o in the event that their much-discussed pursuit of Wayne Rooney doesn’t pan out.

There will be no tears shed for Anzhi; a $70 million annual budget should be more than enough to keep competitive in the Russian Premier League, and Kerimov’s entire project seemed ludicrous and unsustainable. Still, some may feel that the demise of Anzhi’s ambitions indicate a shift in the way European soccer is financed — that Kerimov’s failure will serve as a warning to mega-rich sugar daddies and daddies-in-waiting.

Yes, Kerimov’s Anzhi has gone the way of Sheikh Al Thani’s Malaga rather than Sheikh Mansour’s City. But in Monaco, Kerimov’s buddy Dmitry Rybolovlev just bought Radamel Falcao for $80 million and is having a grand time dueling with French tax authorities and the Ligue de Football Professionnel. In Paris, Nasser Al-Khelaifi topped Rybolovlev with his $85 million purchase of Edinson Cavani, leaving Laurent Blanc with the wonderful conundrum fitting Cavani and Zlatan Ibrahimovic in the same team. And in Madrid, the ultimate sugar daddy of them all, Florentino Perez, is ready to shatter the world transfer record for British Esquire’s August cover model.

Suleyman Kerimov’s Anzhi Makhachkala will become a cautionary tale, a footnote to one particular chapter of the game’s history. As far as the ever-present influence — and ever-growing imprudence — of money in the global game is concerned, the story is far from over.

Reporting on the business side of the world's game.