The financial accounts of the International Boxing Association (IBA) have revealed it received CHF 25 million ($26 million) from Russian energy giant Gazprom.
The sponsorship deal is worth around CHF 25 million ($26 million), according to the balance sheet in IBA’s statutory accounts ending June 30, 2021.
The federation received CHF 30.9 million in cash in 2020-2021. CHF 5 million of this was from event fees relating to the Global Boxing Cup, a tournament that was due to have been staged this year in Russia, so most of the remaining CHF 25 million in cash must have come from Gazprom.
The nature of this sponsorship agreement has not been made public by IBA President Umar Kremlev, but relying on the financial largesse of a Russian energy giant is deeply troubling at a time when Russian energy is seen as funding Putin’s war machine.
The International Olympic Committee (IOC) has also raised concerns over the Gazprom deal.
IBA’s financial situation was a key factor in the IOC’s decision to suspend it as the Olympic governing body for boxing at Tokyo 2020 and in leaving the sport off the initial programme for the 2028 Games in Los Angeles.
“Already in 2019, AIBA’s financial dependence on consecutive single sources of revenue from external investors was highlighted and defined as one of the causes of its indebtedness,” noted IOC chief ethics and compliance officer Pâquerette Girard Zappelli.
“The importance of the Gazprom contract, in proportion to the other revenues, may raise the risk of falling into a similar scheme,” she added.
IBA’s relationship with Gazprom is also pushing the sports federation out of step with the world community.
Poland has imposed sanctions on Gazprom, among 50 Russian companies and oligarchs, as it seeks to increase pressure on Moscow over its invasion of Ukraine.
IBA’s reliance on just one income source is also troubling its Swiss auditor, Moore Stephens Refidar SA, which pointed out in its financial report that IBA’s ability to continue operating is conditional upon the federation “finding sources of revenues”.
Questions are also being raised over the CHF 1.16 million that IBA spent on ‘Marketing’ and ‘Communication Expenses’.
This massive spending by Kremlev’s team on communication and marketing – CHF 1.16 million compared to just CHF 30,900 the previous year – has raised questions over the long-term financial situation at IBA under Kremlev.
Financial stability will be one of the key criteria on which the IOC will consider whether IBA can organise boxing at Paris 2024.
With concerns being raised about the federation’s financial future, IBA may find its path back to the Olympics closing soon unless it can get its financial house in order.