Article about the ECU President Silvio Danailov in FORBES Bulgaria

The worldwide famous magazine FORBES in its Bulgarian edition published an article about the President of the European Chess Union, Mr. Silvio Danailov.

Please find below the translation of the article in English.

IN BULGARIA I HAD EVERYTHING I NEEDED, BUT IF I WANTED TO BE A TOP CONTENDER, I HAD TO BE WHERE THE BEST IN THE WORLD PLAYED

Silvio Danailov, manager of the chess champion Veselin Topalov

CHESS IS BUSINESS

Silvio Danailov, Veselin Topalov’s Manager, has done a masterful job of turning chess into a successful business

By Eleonora Tarandova

The red carpet is rolled out in front of Cinema City to welcome two of the most powerful men in the world of chess, Silvio Danailov (51) and Kirsan Ilyumzhinov (50). They are in the company of Robert Mundell (80), also known as the father of the Euro. Marcie Ries, the newly appointed US ambassador to Bulgaria walks in a few paces behind. They have come to see the premier of Bobby Fisher against the World. Danailov and the Nobel Prize winner, Mundell, head for the back rows. We have been told that the Head of the International Chess Federation (FIDE) Mr. Ilyumzhinov will be here only for the official part of the premiere featuring a speech by Mrs. Ries as his plane is waiting for him on the runway. The former Governor of the Kalmykia Province meets a lot of powerful people in his capacity as President of the Chess Federation and this is beneficial to his business.

Danailov employs a similar lobbyist practice and his goal is to transform chess into “a well organized enterprise offering a product which sponsors want and find desirable”.

 Lately the President of the European Chess Union has often been seen in the company of Mundell. The Canadian economist is a sought-after advisor and Danailov likes to maintain an image of a new-school entrepreneur who wishes to sell chess as a sport but also as an art form, and a vehicle for culture and education. The two of them became friends when they met for the first time back in 2008 in Nanjing, China when they stayed at the same hotel and Mundell attended the games at the Pearl Spring Tournament.

Two years later the Canadian made the symbolic first move in Game 5 of the world chess finals featuring the Bulgarian grandmaster Veselin Topalov and the reigning champion Viswanathan Anand in Sofia.

 ‘When the Prime Minister heard that Mundell was here, he invited us right away and even asked for a second meeting later to seek economic advice’ says Mr. Danailov who took Veselin Topalov to the world title in 2005 and helped Ruslan Ponomariov win his title in 2002.

During the years he has gone through various stages in his career. He has been a chess player, coach, manager, and later on, a tournament organizer and promoter. In the late 70s as a player he was number 8 in the World Junior Championship and later broke through to the top 3 in the European Juniors.

‘In Bulgaria I had everything I needed, but if I wanted to be a top contender, I had to be where the best in the world played. Back in communist times I could not travel freely and hence I could not develop as a player’ Mr. Danailov explains.

When he finally got a chance to travel, he was already in his 30s. He signed up for tournaments across the globe from Australia to the US and tried to make a living from prize money but quickly realized that he was past his prime as a player. It was at that moment that he saw his opening: ‘there were no managers and no professional structure in chess so I decided to take a chance’.

In 1991 Danailov registered his company Kaisa Chess Management. His main asset was a 16-year-old grandmaster by the name of Veselin Topalov who brought him millions even before winning the world title.

Many players would jump at the chance to become his clients but Danailov decided to take on only a few more of them including a Frenchman, a US and an Austrian player. He was interested only in players who had the potential to take the world title or ‘break into the top 10 in the world in the worst case scenario’.

Right from the start Danailov told Topalov that if he wanted to be the best, they had to go where the highest-profile chess forums were held, right to the very heart of the chess world – Spain.

First Danailov moved to Barcelona. Later he and Topalov relocated to Madrid before finally settling IN Salamanca where they still reside ‘because from there you could easily get to where you wanted to go’. In the beginning they started targeting chess tournaments with up to 10 000 Dollars in prize money but very soon they made it to the big 200 000-dollar competitions. Less than 24 months later, in 1993, Veselin Topalov reached number 8 in the world ranking and started getting invitations to the world’s biggest tournaments with up to 500 000 Dollars in prize money.

IN BULGARIA I HAD EVERYTHING I NEEDED, BUT IF I WANTED TO BE A TOP CONTENDER, I HAD TO BE WHERE THE BEST IN THE WORLD PLAYED

In 2002 Danailov and Topalov helped Ruslan Ponomariov win the world title. The 18-year-old Ukrainian was playing the heavily favored Vasiliy Ivanchuk. ‘He had a huge team but they were running out of ideas with about a month till the finals. They called us and told us they needed our help. Topalov was going to coach him and they wanted me as manager’ Mr. Danailov says. Ponomariov ended up winning by a score of 4.5 to 2.5 points making him the youngest world champion in the history of the sport.

In 2004 he was preparing for a unification match for Garry Kasparov’s title and a 2 million dollar check. ‘I had everything lined up but at the time Kasparov had already launched his dissident campaign against Putin and the Russian Federation did not wand that game to be played because they knew he was going to win. The game was sabotaged at the highest political level’ Silvio Danailov explains.

He used this setback as an inspiration – his new ambition is to organize high-profile tournaments. He had seen how it was done it in many places across the world and had learned from the mistakes of others. All he needed now were sponsors to make things happen.

In 2002 the former CEO of the M-Tel telecommunication company offered him an endorsement deal for Topalov. The arrangement was simple, if the company was happy with their success, they could opt to sponsor chess events. Thus in 2004 for the price of 50 thousand Euro Danailov managed to bring Anand to Sofia for exhibition match of lightning chess with Topalov. M-Tel were happy with the event and so Danailov told Nikolov ‘We should try to organize a high-profile tournament with about 500 thousand Dollars in prize money’. This idea lead to the M-Tel Masters Tournament which for five straight years was one of the biggest chess tournaments in the world offering 350 thousand euro in prize money.

Danailov was named the executive tournament director and transformed the chess competition into a show with various ancillary social and promotional events. His piece de resistance however was placing the glass cubicle where six of the best players in the world played directly in front of the National Theater building. ‘The tournament raked in about 500 thousand euro in advertising revenue which we collected and the Bulgarian National Television broadcast footage of the event. The advertising spots M-Tel got were worth about four times the money they invested in the organization of the tournament’ Mr. Danailov told us.

To make chess more attractive for the public and sponsors, Mr. Danailov invented the worldwide famous anti-draw rule called Sofia Rule.

He developed this idea even further by unifying some of the world’s biggest tournaments using the formula employed in tennis and golf and became director of the Grand Slam Series. His idea was quickly adopted by FIDE which started its own Grand Prix Series. In 2006 Danailov called a meeting of the directors of all tournaments offering upwards of 300 000 euro in prize money. It was held in the conference room of Grand Hotel Sofia. There he convinced them that if they joined forces, they could attract big sponsors. As a result the Grand Slam Chess Association was formed and the Bulgarian, five-year business plan in his pocket, was named its CEO.

The Grand Slam started in 2008 in five countries raking in about 1.8 million euro in sponsorship endorsements to be used for prize money. M-Tel Masters was now in the company of tournament juggernauts such as the Dutch Corus Competition held in Vijk-aan-See (currently Tata Steel), the Linares Tournament, the Amsterdam Tournament, the Pearl Spring Tournament in Nanjing, and the series final – the Bilbao Masters in Bilbao, Spain which in 2011 was co-hosted by Sao Paulo, Brazil.

Danailov tried to expand in the American market by striking a deal with the American Chess Foundation (AF4C) sponsored by the likes of Microsoft, J. P. Morgan and Chase and Co, Merrill Lynch and Starbucks for a 750 000-dollar  super tournament in Seattle but the project was stopped in its tracks by the economic crisis.

In 2011 Silvio Danailov was awarded with the highest Bulgarian state award – the Order of Stara Planina I-st class by the President Georgi Parvanov for “his exceptional contribution to the Republic of Bulgaria in the field of physical education and sport.”

CHESS BECAME AN OPTIONAL ACADEMIC SUBJECT IN THE SCHOOL SYSTEMS OF THE 27 MEMBER STATES OF THE EUROPEAN UNION

The economic crisis in combination with other circumstances caused the M-Tel Masters tournament to drop out of the Series in 2010. The main reason for this was the fact that Sofia hosted Veselin Topalov’s title defense match with Anand. The event cost 3.4 million euro with the prize money alone being 2 million. М-Tel were sponsors of this match and spent their budget on it instead of the Masters, plus Topalov ended up losing.

In the meantime Danailov tried to sell the rights to broadcast the Grand Slam events over the Internet which lead to a courtroom battle. ‘For chess the Internet is what television is for football, tennis, and golf’. We broadcast the match between Topalov and Anand live via the official tournament site featuring the advertisements of our sponsors but other sites stole the signal and sold my product, something I invested millions in, to their own audience’.

Danailov, in his capacity of Chairman of the Bulgarian Chess Federation, filed a lawsuit in Berlin against the German Internet site Chessbase but ended up losing after a prolonged proceeding. ‘Chessbase stole 1 million visitors from me which translates in roughly 1 million Euro in lost profit. I was hoping that if I won the lawsuit they would back off and I could collect my fees but that is not how it played out’.

Not long ago Danailov filed a lawsuit against FIDE with the Court of Arbitration for Sports in Lausanne contesting the choice of London over Panagyurishte and Baku as host to the tournament to name the challenger for the world title.  A deposit in the amount of 100 thousand euro was collected but FIDE decided to sign a contract of 12 years deal with Agon, a company owned by an American named Andrew Paulsen registered in January in the off-shore zone of the British Island of Jersey. This contract gave Agon control over the world title matches, the challenger tournaments, the World Cup as well as additional six events from the Grand Prix Circuit. ‘You cannot disqualify candidates if they have met all of your requirements. We wanted Veselin Topalov to play at the tournament so he could win and get a shot at the world title in a match against Anand. He did not quality and could get a spot among the eight challengers only as representative of the host country’ Mr. Danailov explained.

Danailov believes in the motto that ‘a businessman who is not constantly engaged in some form of legal battle is no businessman at all’. As an example he tells us about a German friend of his, a proprietor of a medium-size business, who spends a minimum of 500 thousand euro (but closer to a million in most cases) every year in legal expenses. ‘My legal expenses are modest in comparison. I have been involved in about 10 lawsuits so far and I have won about half of them’ Mr. Danailov continues.

The Elista Toilet Wars is by far the most notorious scandal he has ever been involved in. It was prompted by the suspiciously frequent visits to the bathroom by Vladimir Kramnik during his title match versus Veselin Topalov. The Bulgarian player lost the title but Danailov found Internet cables in the President’s bathroom and as result got his name mentioned by every news agency in the world.

In the summer of 2010 Danailov took on a new battle. At that time his focus was to win the elections for President of the European Chess Union. His opponents were the German Robert Klaus von Weizsacker, professor at the Heidelberg University and son of the former President of Germany supported by Anatoly Karpov and Garry Kasparov, and the Turkish Chess Federation President Ali Nihat Yazici, favored by FIDE,the Russian Federation and multimillionaire Kirsan Ilyumzhinov. ‘Many people had told me I should become involved in the politics of chess because it is where sponsorship decisions are made and they were not happy with the direction the Union was taking’ says Mr. Danailov.

His election campaign had a six-figure price tag but at the Congress at Khanty-Mansiysk, Russia Danailov took over from the 63-year old Slovenian, Boris Kutin with 30 to 24 votes. He then relocated the head office of the Union to Belgrade, Serbia where ‘the Mayor of the city gave us a 200-square meter office free of charge”.

The slogan of his election campaign was “Let’s Make Chess a Business” as Danailov believes that chess could easily be turned into a successful business if nothing else just on the momentum of the around million members of the 54 national federations in Europe who are constantly traveling to take part in various tournaments. ‘One company could insure them, another could provide the food, a third one could cater for the drinks, a fourth one could provide clothing – all of this is business. We can sell this globally.’

He succeeded in ‘selling” the Chess at School Program to the European Parliament which adopted a resolution making chess an optional academic subject (one hour per week) in the school systems of the 27 Member States.

The campaign lasted six months and cost about 200 thousand Euro. Its main spokesperson was Garry Kasparov. ‘I visited him and explained to him the huge potential of this project in Europe and asked him for his help’ Mr. Danailov said. Kasparov joined the cause with his European Chess Foundation and enlisted the sponsorship help of Jan Callewaert, a Belgian businessman and owner of the Option N.V. software company which generated an income of 57.7 million Euro in 2010. As a result the foundation was granted the right to administrate the Chess at School Program across the globe.

WE BROADCAST THE MATCH BETWEEN TOPALOV AND ANAND LIVE VIA THE OFFICIAL TOURNAMENT SITE

For his cause Danailov also relied on the help of the Slavi Binev, member of the European Parliament. It was he who introduced the motion to adopt the resolution. The motion was furthered by four other MPs, namely Hannu Takkula of Finland, Nirge Deva member of the group of conservatives and reformists of Great Britain, John Attard- Montalto of Malta and the Italian Mp, Mario Mauro.

At this point Danailov came to the conclusion that ‘our main strength is not pure chess but our network of contacts’.

During the years he has built a network of high-profile business contacts across the entire world including China and India ‘most of the people from the various chess organizations in the world are powerful individuals such as politicians and businessmen’.

The concept became clear to him after a meeting with Chanel super model Carmen Kass. The beautiful Estonian was a special guest at the fifth M-Tel Masters Tournament. ‘She was responsible for my business network idea. She told me that in business the contacts are the most important resource and reminded me that my network was ready and waiting for me to tap into. The fact is, I know all kinds of people from show business to politics and no matter where I am at the moment, there is always talk of business, regardless of the particular nature’ Mr. Danailov explains.

He does this on the fly. He does not need offices. ‘It is all in these two phones with access to WhatsApp and Twitter’ Mr. Danailov continues pointing to the electronic devices on the table in front of him.

Danailov has enjoyed relative success on the real estate market. He now concentrates on the gold and silver markets but admits he has a lot to learn about them and so chess still remains his main business. /FORBES BULGARIA/

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