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Shakhtar CEO Serhii Palkin: ‘Nothing that has happened to our club is normal. But we dream of returning to Donetsk’

The CEO of the Ukrainian club, exiled since 2014 due to the conflict in the Donbas and the Russian invasion, reflects on the unique situation of Eastern Europe’s most powerful soccer team

Serhiy Palkin FIFA
Serhii Palkin, CEO of Shakhtar Donetsk, in Hamburg during the first match of this season's Champions League.Selim Sudheimer (Getty Images)

Serhii Palkin celebrated 20 years as an employee of Shakhtar Donetsk last June. Since 2004, the 49-year-old from Kryvyi Rih, in central Ukraine, has been the CEO of a company that went from an unknown attraction in a gray city on the Black Sea to the most powerful soccer club in Eastern Europe, a status it retains despite the decade-long war with pro-Russian separatists in Donbas and the full-scale invasion of Ukraine in February 2022. Shakhtar, a walking anomaly, play FC Barcelona in the Champions League on Wednesday.

Question. In 2015, a year after having to move from Donetsk to Kyiv due to the outbreak of the conflict in the Donbas, you said that it would be untenable for Shakhtar to stay away from their stadium and their fans for another year. How have you managed to survive with war increasingly entrenched throughout Ukraine?

Answer. When we left our city in 2014, we thought we would be back in three months. Next year it will be 10 years since we had to leave our fans and our stadium, one of the best in Europe according to UEFA [one of the Euro 2012 semi-finals was played at Shakhtar’s Donbas Arena]. Nothing that has happened to our club is normal. But we dream of returning to Donetsk. If we don’t dream of returning, there is no point in continuing. Now we are like the whole country’s club. Since 2014 we have played Champions League games at home in Kharkiv, Lviv, Kyiv... last year we were home in Warsaw and this year in Hamburg. If we are still going strong, it is first of all thanks to our president, Rinat Akhmetov. For him, the club is his heart. Second, because we have a very good management team. We are a family. All our directors and employees have been working at Shakhtar for an average of 30 years. Third, our fans. Many of our supporters had to emigrate and they all continue to support us. Soccer without them would be like tennis.

Q. When Russia invaded Ukraine, the FIFA Council issued a regulation, Annex 7 to the Regulations on the Status and Transfer of Players, which allowed Shakhtar’s foreign players to unilaterally terminate their contracts. Why do you think FIFA took such drastic action?

A. FIFA is just a shell. The mistakes were made by individuals. The first was to issue Annex 7 before communicating it to the clubs and the Ukrainian Association of Football. There was no contact. We tried to talk to FIFA, to sit at a table to discuss our problems. But the moment they issued Annex 7 they put the Ukrainian clubs under unbearable financial pressure. When we met at the Court of Arbitration for Sport the only answer they gave us was that they understood our situation, but that’s life and they couldn’t do anything. That was the rhetoric. They said they were concerned about safeguarding the lives of the players. When the war started, we did everything we could to protect the foreign players and coaches. I never asked them to return. I never asked them to compromise in any way. It was our country, our problem, our war. I only communicated to all the foreigners that we were open to facilitate negotiated exits for them to leave. Not one pressured us to cancel their contract and release them. They were sympathetic to our moral and ethical position: they knew that as a club we were suffering physically, mentally, financially, and athletically. I found buying clubs quickly but we didn’t have time to react. Neither the players nor the clubs expected FIFA to issue Annex 7 — we had the transfer contracts for Manor Solomon and Teté already signed! And Annex 7 destroyed the ecosystem. Our 13 foreign players were released at a time when we had to rebuild the team to play in the Ukrainian league and the Champions League 2022-23, and FIFA forced us to pay the amortizations and debts incurred to sign those players we no longer had! FIFA told us that it was not their responsibility. And that if we did not pay the amortizations of the lost signings, they would withdraw our licenses and we would not be able to play in Europe. Nobody seemed to understand that the war was putting Ukrainian clubs in danger of disappearing.

If we don’t dream of returning, there is no point in continuing. Now we are like the whole country’s club. Since 2014 we have played Champions League games at home in Kharkiv, Lviv, Kyiv... last year we were home in Warsaw and this year in Hamburg”

Q. How do you quantify the loss?

A. We risk losing an investment of around €80 million ($85 million). So far, we have lost €40 million. Imagine the absurdity of the situation: following the Annex 7 regulation, one of our players [Teté] signed for Lyon for free when he had one year left on his contract with us; and six months later Lyon loaned him to Leicester for six months before he was a free agent and billed €1 million. That was our money! We called FIFA and they didn’t do anything. Lyon received money for a player we invested in. Salomon is another case: his market value, according to Transfermarkt, is €20 million ($21.25 million). It is our club that generated that value by signing him, developing him, and playing him in the Champions League. And now Tottenham sign him on a free and FIFA has basically endorsed this. FIFA says that in soccer we are a family, but today Shakhtar is outside that family.

Q. What happens to foreign players who sign for Shakhtar now, after the beginning of the war?

A. FIFA has now implemented a regulation that says that if you sign a contract with a Ukrainian club after the beginning of the war, you do so on your own responsibility and you cannot break the contract. But how can you be sure that this will be respected? How do you invest in soccer if you run the risk that any day FIFA can unilaterally break all the contracts you have signed?

Q. Roberto di Zerbi, Europe’s revelation coach at Brighton, was at Shakhtar and had to leave the club when the war broke out. Why is it that Shakhtar always, without exception, organizes the team to attack and take the initiative?

A. De Zerbi will become one of the five best European coaches in history. The technical secretariat proposes a shortlist, but the final say in hiring coaches always rests with our president. The question is simple: our DNA is attacking soccer. Our coach can lose, but he can’t stop promoting an attractive style. History provides the proof: the president fires coaches when we play badly, not when we have bad results. The style comes first. We have proven that if you insist on attacking and entertaining, the results will come.

Our DNA is attacking soccer. Our coach can lose, but he can’t stop promoting an attractive style. History provides the proof: the president fires coaches when we play badly, not when we have bad results”

Q. Shouldn’t this quest for spectacle and beauty be put on the back burner in times of crisis like the present, when survival is more important?

A. Last week we fired the coach [Patrick van Leeuwen, with Darijo Srna taking his place]. In the middle of the season, just days before playing Barça in the Champions League, and when we were in a good position in all competitions. Why did we do it? Because we were not playing according to our DNA. We were not doing what we have been doing for the last 20 years: we were not attacking.

Q. In the past decade, Shakhtar became the main promoter of Brazilian internationals through the Champions League. And now?

A. We used to concentrate on the Brazilian market. Now we have increased the radius of attracting talent to Ecuador, Georgia... and we are still in Brazil. We have signed three Brazilians since the war. What happens is that in the Brazilian market it is sometimes difficult to find the players you need and prices have skyrocketed. We have seen 15-year-olds going to Real Madrid for €50 million. That has destroyed the market.

Q. How do you persuade players to sign for Shakhtar after the start of the war?

A. At first it was very difficult. Fortunately, as we have not had any accidents, and as no player wanted to cancel his contract, now things have normalized a bit. They see that we have seven or eight foreigners, that we play in the Champions League... For players like [19-year-old Brazilian forward] Eguinaldo we are a Champions League level club, and the Champions League is the biggest showcase in the world of soccer.

We donated €26 million to the soldiers and the families of soldiers who died fighting at the Azovstal factory in Mariupol. Mariupol is only 100 kilometers from Donetsk. Many Shakhtar fans used to live there”

Q. Chelsea paid Shakhtar €100 million ($106 million) for Mikhailo Mudryk last January. How do you explain it?

A. An absolute record for Eastern Europe, and in the middle of a war! Let’s not forget that in these circumstances, clubs usually pay much, much less.

Q. What did Shakhtar do with that money?

A. We spent most of it paying off the debts of the players we lost to Annex 7. But we donated €26 million to the soldiers and the families of soldiers who died fighting at the Azovstal factory in Mariupol. Mariupol is only 100 kilometers from Donetsk. Many Shakhtar fans used to live there. And Azovstal is owned by our president. Even those who came out of the battle physically unscathed, from the mental point of view, they went through incredibly hard times. A nightmare.

Q. This summer you brought back Dmytro Chyhrynskyi on a free transfer. In 2010, Pep Guardiola viewed him as the defender of the future for Barcelona. What does Shakhtar see in 36-year-old Chyhrynskyi today?

A. We see him as an experienced leader. A good person, a good professional, brought up in our academy. He helps us to guide young players. Today it is very important for us to add veterans. After the start of the war the squad was filled with very young guys. We need to regain a balance.

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