In Shakeup at Turkish Soccer Club, a Worrisome Sign for Erdogan?

(Bloomberg) -- A leadership change at a Turkish sports club has sent a message rife with political undertones, with some seeing the ouster of its longtime chairman as a sign of a tide turning against President Recep Tayyip Erdogan, three weeks before he stands for reelection himself.

Ali Koc, the youngest son of Turkey’s richest family, was elected chairman of Fenerbahce, ending Aziz Yildirim’s 20-year tenure. Fenerbahce, one of Turkey’s so-called “big three" soccer clubs, is Erdogan’s favored team and has been at the center of political jockeying by various factions for several years. Koc won in a landslide - the 51-year-old garnered more than 16,000 of the 20,736 votes cast -- suggesting that Yildirim supporters turned against him.

“The Fenerbahce family has carried out change, now it’s time for the big change in Turkey," tweeted Muharrem Ince, the main opposition Republican People’s Party’s candidate for president at elections scheduled for June 24. Temel Karamollaoglu, another opposition candidate, tweeted that nobody could have predicted that the long-time Fenerbahce incumbent would be overthrown by a “deep wave.”

“In my opinion, the same will happen at the elections," he said.

In an interview a day before the Fenerbahce vote, Erdogan had said he supported “experience" at the club’s helm, a nod for Yildirim. Pro-government commentators had been attacking Koc in the days leading up to the vote.

Debt League

Koc’s turn as chairman also brought hope to Fenerbahce supporters that he may impose some order on the organization’s beleaguered finances. The club, which is listed on the Istanbul stock exchange, has lost about $250 million in the past five years and sits on more than $200 million in debt, according to data compiled by Bloomberg. The Koc family has interests in energy, construction, automobiles, finance and more that account for about 10 percent of Turkey’s gross domestic product.

Yildirim, the longest-serving Fenerbahce chairman in the club’s 111-year history, and Erdogan, the longest-serving leader in the history of the Turkish Republic, also share a common enmity with the movement led by U.S.-based preacher Fethullah Gulen.

Yildirim, who has business interests in defense and construction, spent time in jail in 2011 to 2012 on charges related to a match-fixing scandal, a case the government later blamed on the Gulen movement and its followers in Turkey’s judiciary. In 2013, corruption charges were opened against Erdogan’s government, which Erdogan also blamed on Gulen. In 2014, Yildirim’s case was ordered retried and the charges were dropped.

Shares Surge

Fenerbahce shares jumped as much as 12 percent on Monday and are up 25 percent so far this year, compared with a 13 percent drop in the benchmark Borsa Istanbul 100 index.

“There is optimism after Ali Koc’s election that the club would be better-managed, the soccer team will be more successful under his management, and that the income will increase significantly," said Burak Demircioglu, a trader at Yatirim Finansman in Istanbul. “There’s hope among supporters that such a rich man from a powerful family would make great contributions to the club’s image. However, most of the sports clubs’ shares have no fundamental reasons behind their moves; so it’s possible that soon shareholders may realize none of this is so easy to accomplish."

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