Sochi Report -- Russia's Largest Bank is Latest Olympics Sponsor

Despite the global recession and a contracting Russian economy, Sochi 2014 inks an agreement with Sberbank to become the third domestic partner of the Winter Olympics.

Russia's state-controlled bank is expected to spend an estimated $110 to $130 million on the sponsorship.

The Olympics sponsorship follows deals with Russian oil company Rosneft and telecoms giant Rostelecom, in partnership with mobile carrier MegaFon, in multimillion dollar agreements to fill the oil and telecoms slots. An apparel sponsorship is expected shortly, with Adidas and Bosco in the running.

Russia’s Olympics Minister Dmitry Kozak and Sochi 2014 President and CEO Dmitry Chernyshenko joined German Gref, president and CEO of Sberbank of Russia, at the sponsorship signing ceremony Friday. The event was also attended by national Olympic committee representatives and Krasnodar regional administrators.

Under the deal, Sberbank will play a major role in improving the Sochi region’s banking infrastructure and provide access to financing for the delivery of Russia’s first Winter Games. It will finance the Gornaya Karusel Olympic venue, which will be home to the Russian National Ski Jumping Center and sub-media Village for Sochi 2014.

“We are inspired by Sberbank’s tangible commitment to the delivery of Sochi 2014 and the transformation of the Krasnodar Region by taking a stake and financing the development of a key Winter Games complex,” said Chernyshenko.

“In addition, Sberbank’s agreement to open special credit lines for contractors developing Olympic venues will be a major benefit to those organizations in today’s difficult global economy and another example of the guaranteed delivery of Sochi 2014.”

Sberbank will also maintain and service bank accounts and salary programs for these companies. Benefits will include a ‘To the Olympic Games with Sberbank’ system, which will give people in Russia the chance to visit Sochi 2014. It will also act as distribution partner for the Olympic Lottery project and distribute a unique series of coins to commemorate the Games.

Gref pledged to promote the Olympic Movement’s spirit and values in Russia through the partnership. “Sochi 2014 is a national priority project, so I’m happy that a leading Russian banking institution like Sberbank has become a major participant,” Sochi 2014 chief Dmitry Chernyshenko honored two Russian ambassador athletes at the World Figure Skating Championships in LosAngelesthis week before returning to Russia to sign the sponsor deal. (Sochi 2014)he said.

“In preparation for the 2014 Winter Games, I am sure that we will conquer our own Olympus - achieving the goals set out in Sberbank’s development strategy to become a global financial leader.”

Sberbank, Russia's biggest lender, set out its development strategy up to 2014 in October, announcing the goal of increasing profits two- to three-fold. But like other global financial institutions it has suffered from the economic crisis. In December, it announced that profit before tax for the previous 11 months of 2008 was $4.37 billion; the figure for the corresponding period in 2007 was $4.46 billion.

In the first two months of 2009, Sberbank said it provided more than $17.96 billion in loans to Russian companies. But the bank’s Supervisory Board on Wednesday axed nine of the 23 members of its management board as part of reported plans for an 18 percent reduction in staff this year to save costs.

Following today’s announcement, Sochi 2014 has six other major sponsorship categories to fill: apparel, automobile, metallurgy, gas, airline and insurance.

Sochi's marketing chief Igor Stolyarov plans to secure up to 10 top tier domestic partners and a similar number of second tier sponsors. Another 15 suppliers would fill third tier slots and be designated 'Sochi 2014 partners.'

Meanwhile, Russian media report that the major TV and radio stations in Sochi are refusing to give airtime to many of the two dozen candidates in the April 26 mayoral elections. But there is no blackout on coverage of the favorite in the race - United Russia’s acting Sochi Mayor Anatoly Pakhomov.

Opposition Solidarity leader Boris Nemtsov reportedly blogged this week that two radio stations had declined to broadcast his campaign ads after coming under pressure from regional authorities.

Other high-profile political figures in the race to run the Black Sea resort are Russian billionaire and London's Evening Standard newspaper owner Alexander Lebedev and Russia's former presidential candidate Andrei Bogdanov.

With reporting from Mark Bisson.

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