A Mess at Dynamo Moscow
As I mentioned in yesterday’s post, incoming Dynamo Moscow head coach Vladimir Vorobyov is stepping into a mess at the storied team, first-ever hockey champions of the USSR back in 1947. In a way, it’s no big surprise — rumours of Dynamo’s financial exigency having been rolling about for a year or more now. Recently, however, there seem to have been some even more serious developments. Dynamo lost control of their training base at Novogorsk due to non-payment of the lease, and that was quickly followed by rumours of the folding of their VHL farm club, defending Bratina Cup champions Dynamo Balashikha. Looming over all of this is the team’s debt, pegged at a whopping sum just shy of 1.9 billion Rubles (about $45 million Canadian) — including about 730 million Rubles owed to players. And then last week the team’s offices were raided by anti-corruption police, who confiscated documents related to accounting.
So what exactly is the situation, and why? Read on, for an examination of that, and some discussion of possible remedies.
This will all, I warn you, be somewhat oversimplified — it can be hardly be otherwise, for reasons of article length. However, it should serve, and we begin with some historical background. The Dynamo Moscow hockey team was founded in 1946 as part of the Dynamo Sports Society, the national sports and fitness club of the state security body that would in due time become the KGB. The Dynamo Society was one of a number of Voluntary Sports Societies in the USSR, each of which administered various sports in various cities throughout the country (two of the more famous ones, Dynamo’s fierce rivals then and now, were Spartak and the Sports Club of the Army). During the Soviet era, all sports teams and clubs that bore the name “Dynamo” were affiliated with each other as part of the eponymous sports society.*
After the break-up of the USSR, most Voluntary Sports Societies faded somewhat into the background, relegated to a role in organizing youth and amateur sports. In general, the “big” teams went their own way as professional sides, although many retained informal or arm’s-length ties with their old societies. Not so at Dynamo, where the Society, now the “Dynamo All-Russian Physical Culture and Sports Society” (“Vserossiiskoye Fizkulturno-Sportivnoye Obshchestvo” — hereafter referred to as the “VFSO” or the “Society,” as opposed to the “team”) remained more-or-less in charge of the hockey team, and indeed also maintained its old connections to the state security apparatus (the current VFSO Chairman is former KGB Lt.-Col. Vladimir Strzhalkovsky).
The situation changed in the late 2000s, when the hockey team fell on financial bad times. It was saved only by a merger with fellow-KHL side HK MVD Balashikha, a club with very close ties to the Russian Interior Ministry. Though the newly-merged team maintained the “Dynamo” name and brand, much of its leadership came from HK MVD, including head coach Oleg Znarok, General Director Andrei Safronov, and Chairman of the Board of Trustees Rashid Nurgaliyev, who at the time was the Russian Federation’s Minister of the Interior. Shortly thereafter, billionaire Arkady Rotenberg also came on board, and his funds enabled the hockey team to operate much more independently of the VFSO than it had before, although not completely so. Two Gagarin Cups quickly followed, in 2012 and 2013, and all seemed well for a time.
Safronov and now-former Minister Nurgaliyev are still at the hockey team (the latter has been strangely quiet through this whole thing, at least publicly), but Rotenberg left in 2015 to take up a position with the Russian Hockey Federation. With his money gone, the financial problems re-surfaced. And now it seems, or is at least alleged, that perhaps the VFSO is attempting to re-assert its former level of control. Several veterans of the Dynamo hockey team wrote an open letter last week stating that the VFSO has withheld sponsorship moneys that could have been used to pay down or avoid the debt. That is, of course, unconfirmed, but would certainly explain how a team with a stable, involved, sponsor (the VTB Bank), could end up so short of cash.
The Society’s goal, according to the veterans’ letter, is to bankrupt the hockey team and then form a new Dynamo Moscow squad, 100% owned by the VFSO. The letter also alleged that attempts by the hockey team’s leadership to communicate with the VFSO have been rebuffed.
If all of this is true, one area of leverage in this struggle has been the hockey team’s training base at Novogorsk. The team owns, or at least owned, the base, but the land on which it stands belongs to the VFSO, and approximately 6% of the team’s debt is owed on the team’s lease (as mentioned at the top, the VFSO seems to have taken control of the base itself now). Another battleground may well turn out to be the marketing rights to the team’s famous logo, name, and colours. Those belong to the VFSO, and the agreement allowing the hockey team to use them will expire this autumn. The possible folding of the farm team, too, appears to be an initiative of the VFSO rather than the hockey team.
For its part, the VFSO accuses the team leadership (especially Safronov) of gross financial mismanagement, and indeed last week’s police raid was based on an embezzlement complaint filed by the Society. The VFSO further accused the team’s executives of using the veterans’ letter to avoid their own responsibility for the matter, and noted that the Society in fact has no representative on the hockey team’s Board of Trustees, and no role in its leadership. I make no claims as to which side is in the right on this one, but it would appear that the gulf between the team and the VFSO is massive, and probably un-bridgeable at his point at least with the current personnel.
So what next? Can the famous old team be saved? The KHL is certainly in favour of that, and league President Dmitry Chernyshenko stated in the wake of the police raid that the team’s KHL participation was in no danger: “It is a great club – the brand, certainly, will continue.” The Russian Hockey Federation, where Rotenberg now works, has also said quite firmly that it will support Dynamo. As far as the immediate future is concerned, the KHL says that is has received the necessary documents from the VFSO for the team’s participation in the 2017-18 KHL season.
Update: Interestingly, and this goes back to the plan alleged in the veterans’ open letter, the documents submitted by the VFSO do indeed relate to a newly-founded Dynamo hockey team, wholly owned by the Society (hat-tip to Tomáš Vorčák). That matter is now in the KHL’s hands.
Through it all the current team has continued to go about the business of preparing for next season. Veteran scorer Mikhail Varnakov has been signed from Ak Bars Kazan, while Dynamo have also been linked with star Barys Astana forward Dustin Boyd. It is likely, if not certain, that there will be a Dynamo Moscow hockey club taking part in the 2017-18 KHL season, and the big question now is what twists and turns need to be navigated to make that happen (the fate of Dynamo Balashikha remains much more unclear).
One plan that has been mentioned several times in the last few days has involved repeating history. Just as Dynamo merged with HK MVD earlier this decade, there have now arisen suggestions of a possible union with Vityaz Moscow Oblast. At first glance, it is an idea that may have some merit to it, although it would certainly represent a sad day for Vityaz’ loyal and long-suffering fans should they lose their team just a few months after their first-ever taste of KHL playoff action. The KHL has announced that three teams will be leaving the league at the end of next season, based on strict criteria, and we have to admit that Vityaz would be a likely candidate for contraction — a merger would at least preserve something of the team, somewhere. And Dynamo would thus acquire an excellent head coach in Valery Belov, just as they did when Oleg Znarok came over in the MVD merger. However, we are still very much in the realm of rumour, here; the Vityaz brass have claimed that they have had no formal proposals, and KHL President Chernyshenko likewise disavowed any knowledge of such a plan.
And so for now we wait for further developments. One that occurred today was — at last — a meeting between the VFSO and Andrei Safronov, and it appears that the latter will soon be out of the Dynamo leadership (possibly along with Nurgaliyev). Current Vityaz club President Mikhail Golovkov and former KHL President Alexander Medvedev have been rumoured as replacements, although that is far from confirmed and in fact has been denied by both men. The next major deadline now appears to be the end of this month, when KHL teams in debt will face a fine of 20% of the money owed to players. Should matters not be sorted out at Dynamo by that time, that will be a significant and possibly game-changing addition to the team’s financial burden. We will keep you posted on that, and on other developments as they occur. Thank you for reading!
* Just to complete that story, Dinamo Riga and Dinamo Minsk are both closely associated with the Dynamo Sports Societies in their respective countries, and both of those organizations do have obvious historical ties with their Russian counterpart. However, they are not involved in this particular mess. As for Dynamo St. Petersburg, with teams in the VHL, MHL, and Women’s Hockey League, they are indeed associated with the VFSO much as Dynamo Moscow are. Once again, though, there has been no suggestion of problems with the St. Petersburg club.