Corporate Tennis: Moscow Loves It

By Carla Marinucci
September 23, 1991

Soviets cutting red tape to ease inflow of big bucks

You know Boris Yeltsin the Russian republic president, and Boris Yeltsin the revolutionary hero. Now, meet Boris Yeltsin, the tennis player. Yeltsin is, indeed, a major tennis fan and a scrappy player on the court - but he also knows a good business deal when he sees it. That could be one reason why he's taken the role of honorary chairman of the upcoming Kremlin Cup tennis tournament, one of the Soviet Union's first major events in the lucrative arena of corporate sports sponsorship.

The Kremlin Cup is slated for November 4-10 at Moscow's Olympic Stadium. And it may represent the forefront of increasingly open sports-related advertising and marketing deals yet to be made in the post-coup Soviet Union.

"These types of events are going to explode," says Peter B. Necarsulmer, whose PBN Co., with offices in Moscow and San Francisco, is public relations counsel for the Kremlin Cup and will sponsor a major related business symposium for attendees. "They match the Russian personality - warm and honest . . . and they allow for business people to get to know each other and develop relationships."

Corporate sports sponsorships have long been a gold mine for U.S. corporations, which have jumped head first into backing everything from tennis (Volvo, Virginia Slims) to running (The Examiner) to rodeo (Winston) and auto racing (Marlboro, Budweiser).

But such deals had been unheard of in the Soviet Union until perestroika, the policy of social and economic restructuring of Soviet President Mikhail Gorbachev, allowed for corporations to explore such marketing relationships.

Tennis has had a long history in the Soviet Union - Count Leo Tolstoy, one of Russia's greatest writers, was a founder of the first Moscow Tennis Club. But it wasn't until last year that the Kremlin Cup was introduced, marketing the first professional tennis tournament ever held in the Soviet Union. The 15,500 attendees who turned out last year made up the biggest crowd ever to watch tennis in the Soviet Union according to Kim Getto, managing director of PBN's Moscow office. This year, post-coup, "the door has been thrown open to a host of all new opportunities," and sponsoring firms including AT&T and Pepsi are well aware of that, says Getto.

For companies seeking a foothold in a market of 300 million product-hungry consumers, being involved in such event marketing could mean much more than just a sporting tournament.

"There is just a feeling that, more than just tennis, this is a chance to get close to top government officials," says Gene Scott, Kremlin Cup tournament director and editor of Tennis Week Magazine.

Among those officials is Russian Prime Minister Ivan Silaev, a devoted tennis fanatic and "an aggressive player" who has helped sweeten the pot for corporations wanting to do business in Russia, Scott says. Silaev acts as the chairman of the Kremlin Cup's organizing committee, and Boris Yeltsin has also taken a personal interest in the success of the event.

Silaev, much more than a figurehead, has taken an active role in the Kremlin Cup. "He's been cutting the red tape, making sure our players who arrive in Moscow can get visas quickly at the airport, and doing things like helping us to speed up getting our equipment through customs," says Scott.

Those kinds of contacts may be critical - and can pay off for companies that take the plunge now, Scott says.

For instance, when Bayer, the German-based chemical manufacturer, was approached about putting up $500,000 for a lead sponsorship in the Kremlin Cup last year, the company asked for a trade-off from Soviet officials instead. Bayer executives requested their firm be put on the priority list for repayment of some $50 million in outstanding debt owed by the Soviets, says Scott. The Soviet officials agreed - and Bayer doubled its sponsorship dollars to $1 million. Bayer is the lead sponsor of the Kremlin Cup again this year.

It is precisely to encourage those kinds of business deals that the Kremlin Cup combaines the week-long tennis tournament with a schedule of business events - including dinner with major Kremlin officials, and a one-day major business symposium - all designed to "allow people to have substantive discussions" on deals in the Soviet Union, says Necarsulmer.

"There has been a sense that if there is going to be a market economy, (corporations) want to be part of it," says Getto. "There is enormous activity going on."