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. Last Updated: 07/27/2016

Good Policy Makes for Good Sports

President Boris Yeltsin's decree to exempt sporting organizations from taxes is a positive and vital step toward rejuvenating Russia's beleaguered sports world.


The Soviet sports machine was once the envy of the world, but sports in the new Russia has been showing the wear and strain of too little funding being stretched too far. Soccer and ice hockey players have been abandoning the domestic Russian leagues for lucrative contracts in Europe and North America.


Tuesday's decree to provide a tax umbrella to sports clubs will help ease the transition of these organizations to self-supporting entities. Already, officials in the sports world say they are optimistic about attracting sponsorship, presumably both local and foreign, for events and clubs in Russia due to their new tax-exempt status.


Finding sponsorship is a difficult process. Although many clubs can find sponsorship to keep their big-name sports like hockey and soccer afloat, they have to worry about financing the less popular, but equally important, areas of activity, such as schools and junior teams and low-profile sports. Without these, the senior teams have no way to replace players who retire, become injured or decide to move abroad.


Over the last two years a lack of funds forced Dinamo, the largest sports club in the country, to dose 50 percent of its sports schools.


The tax exemption, however, has a drawback that officials should be quick to correct when the time is right. The once-robust Soviet sports program, most would agree, needs to be pared down in today's cash-strapped Russia. It is just a part of the restructuring that all Russian industry and society must endure as the country moves toward a free market.


Providing limited tax relief over a limited time will help sports club through the difficult transition period. But that relief should be taken away as soon as the professional teams establish themselves and show they can stand on their own like any other company.


The exemption should then be maintained only for the amateur sporting clubs. Otherwise, the tax break could forestall the serious decisions about cutting back and restructuring that these clubs must make.


In the meantime, the decree is a welcome windfall. and its ramifications run beyond giving sporting organizations a simple tax break at a time when Russian society is embracing the unknown.


Sports has historically been an important part of the social fabric here. While Russia is reweaving the economic and political warp and weft of that fabric, sports will be an even more important thread for the country.