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New Russian sport: ruble chase
graphic February 12, 2002: 12:00 p.m. ET

Post-Cold War Olympic team scrambles for sponsorship support to catch the West.
By Staff Writer Chris Isidore
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SALT LAKE CITY (CNN/Money) - The 2002 Winter Olympics started with the lighting of a the torch by the 1980 U.S. hockey team, a tribute to the time when the U.S. team was the underdog versus the well-financed, near-professional Soviet team.

But this year's Olympics finds the Russian team as the under-financed underdogs, far behind Western countries in terms of sponsorships and other financial support for their athletes.

This Olympics also marks a first step for the once mighty Russians. After depending on only the financial support of foreign companies that had sponsorship agreements with the International Olympic Committee to support teams around the globe, Russian companies for the first time are making contributions to their Olympic team this year.

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Russian Olympic team officials hope that increased financial support from Russian companies will raise the chance of capturing medals, such as this gold medal win in Nordic skiing in 1998.
The amount of funds from sponsors is modest - about $4.5 million, just enough to compete in Salt Lake City and a fraction of the amount received by the U.S. Olympic Committee. To support the team on an ongoing basis will take about $30 million a year, according to Russian team officials. By comparison, the U.S. Olympic team expects to see an average of nearly $50 million a year in sponsor dollars from 2001 through the Summer Olympics of 2004, and with broadcast and other revenue, it expects to receive annual revenue of $117 million.

Russian government support for the team has fallen drastically since the break-up of the Soviet Union. But Russian team officials say support from 22 Russian companies, along with IOC sponsors Coca-Cola Co. (KO: Research, Estimates) and Samsung Corp., are an important first step to fielding competitive teams again.

"Big sports doesn't exist without big money," said Alexander Livshits, deputy chief executive of international affairs with Russian Aluminum, one of the major sponsors of the Russian teams.

The Russian team has continued to perform well despite the lack of financial support. It finished second to the United States in medals at the 2000 Summer Olympics in Sydney, and third behind Germany and Norway at the last Winter Olympics is in 1998 in Nagano, Japan. But, unlike previous years, the country is not considered the powerhouse in most sports except figure skating this time around.

Russian Olympic team officials say they are still greatly out-gunned by the Western teams' financial support, but they're encouraged by these first signs of support from Russian companies.

"In the past, Russian businesses were absolutely not interested in supporting Russian sport and culture," said Alexander Kozlovsky, a vice president of the Russian Olympic Committee. "Now they're rich enough to invest in the country, not just self-invest. We're still far behind. But compared to five years ago, or even a year ago, it's paradise."

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Alexander Livshits and Sergey Chestnoy of Russian Aluminum check out their company's logo among a display of Russian Olympic sponsors.
Significant support from the Russian business community is also essential if the country's bid to host a future Olympics is to have any chance said Kozlovsky. Moscow is seeking to be awarded the 2012 Summer Olympics, and it will be competing with one U.S. city that will be chosen later this fall, as well as probably Paris and Toronto, which lost out on the 2008 Olympics to Beijing.

"I'm confident that Moscow is a fantastic site for the Olympics," Kozlovsky said. "All the major sites we need already exist. But in this type of competition, business participation is important. When St. Petersburg tried for the games, we had no support of businesses, no financial support. This time we will have a financially solid bid."

The Russian companies are also being introduced to the idea of the advantages of the status and publicity that comes with sponsorship.

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While Russian Aluminum has relatively limited consumer sales, the world's second largest maker of primary aluminum behind Alcoa Inc. (AA: Research, Estimates) does want to communicate its size and strength to Western business partners. An Olympic partnership does help to communicate that, said Stanislas Neve de Mevergnies, a New York-based spokesman for the company. The company also is the sponsor of the Kremlin Cup, a professional tennis tournament that took place in Moscow in October.

But the pride in the Russian athletes' past strength and the desire to see the team become an Olympic power again is also a motivation for the sponsorship. Livshits speaks of how difficult it was to watch the U.S. hockey team light the torch Friday night, and to recall a loss that he calls a "tragedy" for Russian sports fans at the time.

"Hopefully, we do our part and Russian athletes will be able to do their part, to come back to the position they used to have - to win in hockey over the Americans," he said. graphic





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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.
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