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Schalke is in an Awkward Spot with its Sponsor, Russian Oil Company Gazprom

What's a German soccer club to do when its sponsor is cutting off oil supplies to Europe through Ukraine?
Jim O'Connor-USA TODAY Sports

These are weird and uneasy times for Schalke, one of Germany's biggest and most tradition-laden clubs. In a couple hours, Schalke will take the field for a Champions League match against Sporting Lisbon. You've probably seen Schalke's distinct jerseys: dark blue with white trim. Across the chest—also in white—is the name of the team's main sponsor: Gazprom.

For the past several months, Gazprom—Russia's state-owned oil company—has not been exporting oil to Ukraine. This is a problem. The European Union gets around 15 percent of its oil and gas from Russia—the world's third biggest oil producer—and much of that energy flows through Ukrainian pipelines. German Chancellor Angela Merkel spent today at the EU in Belgium locked in negotiations with Russian and Ukrainian officials. Merkel wants to get that oil flowing again, otherwise it could be a cold, expensive winter.

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It's not often that a club's main sponsor is embroiled in the kind of international political crisis that requires a head of government to sort out, but that's the situation at Schalke. The club is advertising for the very organization that is threatening its own national economy.

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Publicly, the club and its supporters have towed the line, careful not to upset relations with Gazprom. There are certainly a few pissed off parties, but they're small in number and relatively quiet. But modern European soccer is as much about winning as it is about courting fans—especially international fans—and in that respect, Schalke is in a tough spot. Gazprom was included in a recent round of EU sanctions. Jürgen Roth, who recently wrote a book on Gazprom, called it "a political, economic and intelligence arm of the Kremlin kleptocracy." That's not a good look for a main sponsor.

To understand just how badly Schalke is besmirched through its association with Gazprom, consider the year Ukraine is having. Russian President Vladimir Putin has long sought to bring former Soviet countries back into Russia's sphere of influence. The Ukrainian government acquiesced to that wish late last year only for massive protests to break out in Kiev, which eventually resulted in a change of government. In March, Russia responded by annexing the Crimean Peninsula from Ukraine. In the months that followed, neighboring provinces in eastern Ukraine have become embroiled in civil war. In addition to the 298 civilians killed when Malaysian Airlines MH17 was shot down by rebels, close to 4,000 people have died in fighting between Ukrainian forces and a rebel army many believe is supported by Russia. This summer—in an effort to exert even more pressure on Ukraine—Gazprom turned off the oil exports to its western neighbor, blaming it on unpaid debt.

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Can Schalke get out of this mess—assuming that it even wants to? Clemens Tönnies, the club's president, is also the head of Tönnies Lebensmittel GmbH, one of Europe's biggest meat producers. The company is in the process of building a 600 million Euro meat processing plant in Russia. Tönnies said that questions from Germany's Handelsblatt suggesting he'd partnered with Gazprom to lubricate the meat processing deal were"wrong-headed." That may be true, but that doesn't mean extracting Schalke from a Gazprom deal would be good business for the meat plant.

Schalke's financial situation complicates things as well. Schalke earns an estimated 12 million Euros per year from from the Gazprom deal, which runs through 2017. With bonuses, the figure is closer to $20 million Euros—a German sponsorship package second only to Bayern Munich's deal. With debts estimated at about $230 million Euros, it's easy to see how Schalke might just have to take the money and pretend not to smell the shit on its shoe.

Weirdly, the best way out for Schalke might be for the political situation to deteriorate. At that point, the Bundesliga might view the contract as violating league rules. Section 16, Paragraph 5 of the Bundesliga's regulations for clothing and equipment includes the following clause:

"The advertising [on a uniform] must not violate the principles of ethics and morality, the law or common decency generally accepted in sports…Advertisements with political, religious or racist content or for the benefit of sects are also prohibited."

Bundesliga officials declined to provide VICE Sports with an answer when asked how they defined "political" and whether the Gazprom advertisement on Schalke's uniform met that definition. But if the fighting in Ukraine—which took the lives of as many as 16 combatants just yesterday—continues to escalate, it will be hard to ignore the political implications of the Gazprom logo on the front of the Schalke uniforms.

By then winning over those international fans might be out of the question for Schalke. And nobody in the EU wants things to get worse. But if it does become a cold, expensive winter, and the gas does not start flowing soon, don't expect anybody to pull on a extra Schalke jersey to keep warm. Those might be better off in the fireplace.