FNG appears to be caught in Kremlin power struggle
Magomedov appears to be caught in a Kremlin power struggle that involves Igor Sechin, the CEO of Rosneft, who is reputed to be “the scariest man on earth.”
Sports diplomacy is using the passion generated by sport to achieve political or social influence. It’s a method somewhat alien in the west. If you wanted to get President Trump’s attention, you probably wouldn’t do it by buying the Yankees or the Mets, or both. However, the practice is common in the former communist states of eastern Europe.
Dagestan’s Ziyavudin Magomedov was a multi-billionaire when his big friend was then Russian president Dmitry Medvedev. When Putin returned to power, Magomedov dropped to ordinary billionaire status and appears to have determined that investing in MMA would be a wise course of action.
Magomedov attempted to buy a share of the UFC, and that failing, bought Fight Nights Global in 2016. He then poured many, many of millions into it, in an apparent attempt to curry favor with the most powerful man in the world. Magomedov also founded Eagles MMA fight team; the team president is Khabib Nurmagomedov.
Now Magomedov is under arrest and charged with embezzling over $35 million from the construction of a World Cup stadium in Kaliningrad that his Summa Group company won the rights to build. He faces 20 years in prison, and is under pre-trial detention for two months, after the court rejected a bail offer of $35 million.
Karim Zidan for BloodyElbow.com has worked passionately to shed light on sports diplomacy in MMA. In his latest blog, he discussed the potential impact on our sport of this latest episode.
Fight Nights Global is home to over 100 local fighters who may be forced to find new employment over the coming months. Prior to Magomedov’s investments, the promotion was operating at a loss of over 18 million rubles [around $150,000] a year and will struggle to stay afloat without the support of another wealthy backer.
It remains unclear whether the charges will be the final nail in the coffin for the oligarch. Some experts believe that while it is unlikely that a corruption case of this magnitude was fabricated, Magomedov’s arrest likely has to do with the increased tension between the United States and the Russian Federation. As sanctions continue to impact Russian businesses that maintained relations with the European Union andNorth America, oligarchs close to Putin are attempting to reshuffle assets within their country, which makes billionaires like Magomedov, who sit outside of Putin’s inner circle, vulnerable to attacks.
According to The Financial Times, Magomedov appears to be caught in a Kremlin power struggle that involves Igor Sechin, the CEO of the Russian state oil conglomerate Rosneft and a man reputed to be the scariest man on earth.
Sechin is believed to have been the architect behind the demise of oil giant Yukos in 2003, as well as the arrest of Mikhail Khodorkovsky, considered the wealthiest man in Russia at the time. Reports suggest that Sechin was interested in some of Magomedov’s assets, mainly the Novorossiysk Port so he can he expand his influence in the oil industry.
It should also be noted that Sechin is another Russian oligarch who has shown interest in combat sports. According to Forbes, Sechin’s oil conglomerate partnered with Russian boxing promoter Andrei Ryabinsky and took on all costs associated with the 2013 title fight between Wladimir Klitschko and Alexander Povetkin, including the purses for both fighters. The fight incurred significant costs – well over $23 million – and made minimal profits.
The Kremlin denies any political motivation for Magomedov’s arrest.
Magomedov may yet come out of this with some of his assets, including FNG. He would presumably then be even more ardently trying to impress Putin; thus his support of the sport would doubtless continue. If Magomedov is imprisoned for an extended period of time, and his assets absorbed, then FNG could conceivably have an even more formidable patron – the second most powerful man in Russia. Or maybe everything collapses.
In the meantime, Eagles MMA president Khabib Nurmagomedov fights Max Holloway for the lightweight championship of the world in the main event of UFC 223 on Saturday.
