The news that businessman Vasil Bozhkov is moving the issue towards collecting his receivables from the football club “Levski“, logically sank into a sea of emotions and exercises on the strings of morality and honor. The analysis of the real status of these obligations, their fate, and therefore the fate of the club, was left aside. And although this is before everyone's eyes, few noticed the pattern in which oligarchs and politicians try to use “Levski“. In the past - both CSKA and “Botev“.
In this article, I will pay attention to the immediate consequences of Bozhkov's claim. Then I will also talk about the context in which it occurs, and whether it marks larger processes.
About the receivables
Bozhkov himself explained that since many of his accounts are frozen, and he has to pay his lawyers, he decided to transfer his receivables from “Levski“ to them. Paying someone by assigning them your receivable from a third party is called cession. And Bozhkov assigned his receivables from “Levski“ to his lawyers. He justified this with the passivity of the blue community and its refusal to support him in 2020, when state repression poured on Vasil Bozhkov's gambling businesses.
The club reacted in a strange way. It presented itself as the guardian of the “Magnitsky“ sanctions that were imposed against Bozhkov. It announced that it would ask the Ministry of Finance, the National Revenue Agency, the Bulgarian National Bank and the Ministry of Foreign Affairs what the status of his obligations is, can they be paid and so on. They announced that if they could not refuse the payment, they would seek negotiations. But that they would not pay in a way that would upset the financial situation of the team.
Everyone who is not blind knows that this is a waste of time, but in the long run it is doomed to failure. The legislation of the European Union protects the citizens of the Union from sanctions by third countries. Our Constitution protects them. Precisely at the request of the BNB, the Ministry of Finance asked one of the law firms that defend Bulgaria in international investment arbitrations what the state can and should do under the condition that its citizens and companies are sanctioned under the “Magnitsky”. The answer is as surprising as it is clear and direct. It is not obliged to do anything. Neither the state, nor the companies, nor the people are obliged to implement the American sanctions. Only financial institutions - banks, insurers, investment funds and others - should not take, give and transfer US dollars to the sanctioned and their related persons. Thus, the sanctioned are excluded from the economic life of the United States and that's all. Although in theory the US does not pursue the associates of the sanctioned, the use of an international payment infrastructure that was created by the US and is visible to the Americans makes it difficult for banks to serve the sanctioned persons.
Therefore, in theory, it was easier for them outside the eurozone, since Bulgaria had its own payment system. But this is a secondary issue. Taking Bozhkov is his asset. The assignment is a business operation in which no payment infrastructure is used. Does the debt of “Levski“ to the sanctioned Bozhkov disappear because he is sanctioned? The answer is no. Does “Levski“ have to pay his new creditor in the person of Bozhkov's lawyers? Yes. If negotiations and concessions do not come to fruition, the most logical course of events is to the football club to send a notarial summons to pay the debts. If there is no payment, the imposition of precautionary measures will follow. If these do not work either, the club faces insolvency proceedings.
Levski fans can tear their shirts, talk about honor, accuse Bozhkov of not keeping his word, but business logic, and life logic, is that promises become commitments when they are cemented with a signature on a document. Before that, they are just talk and lying about talk is naive, stupid, even irresponsible.
Bozhkov's claim may be a signal for larger processes
To explain them, the history of Bozhkov's adventure with the blue club must also be traced. He entered as a majority shareholder in “Levski“, after Todor Batkov threw in the towel before him, and Ivo Tonev and Spas Rusev have failed in their attempt to stop the decline. Each so-called owner transfers money from other businesses to subsidize the club's losses. This transfer takes the form of loans, not donations, not capital increases. The reason is that if the club makes a profit, the owner will get his money back. If the club itself is sold, he will be able to get it from the next owner - sooner or later. And this briefly summarizes the financing model in football called "fatherhood".
When Vasil Bozhkov came, the blue community had already realized that the "father figure" model was harming the club, but they accepted it. There were promises that things would change, although not immediately. I didn't believe it and was skeptical, but so what. Who am I to change the course of events. When Vasil Bozhkov's problems with the state began and he moved, let's not say fled, to live in Dubai, the state tried to exclude the football club from the operation to ruin Vasil Bozhkov. He was offered an option or a signal was sent that if he transferred the shares to a compromising person, it would be good for everyone. "Levski" remains aloof from the war against Bozhkov. Hundreds of thousands of Levski fans will not hate the state because its judicial system is persecuting a businessman. Bozhkov himself may have seen a chance to restore his interests by transferring the shares and prolonging the club's normal existence, while at the same time remaining a creditor with claims from “Levski“.
Later, the United States sanctioned Bozhkov under its “Magnitsky“ law, and today, six years later, he is seeking his money from “Levski“. During these years, the football club got back on its feet. It is alleged that its management was outsourced to a professional basis and because of this, its financial situation is improving. Less money for transfers, selection of better-quality players. Searching for their profitable realization after some time and so with small profits over the years, the debts accumulated previously are cleared. There are no ambitions for a championship title until the club's financial situation comes as close as possible to what we could call “normal“.
Six years later “Levski“ became champion for the first time since 2009. It is financially stabilized, but Rumen Radev and his party “Progressive Bulgaria“ win the elections. In parallel, the compromise personality Nasko Sirakov sells the shares to the Bulgarian businessman Atanas Bostandzhiev, who lives in London. What is the businessman's interest in the club? Why is he acquiring it now and not earlier?
Many answers can be given to these questions, but it is a fact that Bostandzhiev buys the shares from Sirakov right after “Progressive Bulgaria“ won the elections, and GERB and Delyan Peevski's MRF lost them.
And one of the explanations is that the club as a basis for building political and economic influence through some fan groups is too important for Borisov and Peevski, who have helped the club more than once in the past. Unlike Vasil Bozhkov, they can mobilize the fan groups. And here there may be a game against the new government. So that the new rulers do not think of repressing Nasko Sirakov because of the actions and the influence that goes with them, the majority package is transferred. Vasil Bozhkov, although he is completely right, exposes himself by saying how he naively tried to buy the love of the blue community. But if now he or his lawyers seriously seek their money from “Levski“, the club will be forced to pay them.