Why are International Sports Associations Located in Switzerland?

Why do so many international sports governing bodies locate in Switzerland?  Here is the answer:

Back in 1915, the French baron Pierre de Coubertin, founder of the modern Olympics, chose Lausanne as the IOC headquarters: a city on the shores of a beautiful lake, with a wonderful view of the Alps – and far away from the turmoil of First World War.

Since then, 23 federations and 20 international organisations have followed suit and set up their headquarters in Lausanne and the surrounding canton Vaud. Switzerland as a whole is home to 47 international sports bodies. Its nearest rival, Monaco, has five.

But as the business of sport is globalised and more and more countries are eager for their share of the pie, Switzerland cannot rest on its laurels, experts say – and has no intention of so doing.

"The tradition of hosting international organisations goes back to the 1920s, when the League of Nations was established in Geneva,” says Jean-Loup Chappelet, an expert on the management of sports organisations at the Swiss Graduate School of Public Administration in Lausanne.

“After the IOC, other sporting bodies like Uefa [the Union of European Football Associations] and Fifa [world football’s governing body] naturally turned towards Switzerland,” he added.

Piermarco Zen-Ruffinen, a specialist in sport law at Neuchâtel University, told swissinfo.ch that Switzerland is attractive for many reasons: its geographic location, highly qualified work force, political stability, neutrality, security, quality of life, plus an attractive tax regime and legal code.

“The Swiss law on associations is extremely simple and hugely flexible. Furthermore, the slowness of the legislative process offers a lot of legal security,” he said.

Chappelet explained that associations are not obliged to register with the state nor to publish their accounts. “When the civil code was drawn up in 1912, no-one imagined that there would ever be such huge associations. Fifa is in effect a holding which owns public limited companies, but its statutes are the same as those of a bridge club.”

FIFA Defines "Independent"

FIFA has released its proposed revisions to its statutes, for consideration in it upcoming Congress at the end of May. Among the proposed revisions is a definition of what it means to be "independent" from FIFA (here in PDF, at p. 52):

A candidate for the office of chairman or deputy chairman of the Audit and Compliance Committee or of either of the two chambers of the Ethics Committee shall not be considered independent if, at any time during the four years preceding his term, he or any family member (spouse, children, stepchildren, parents, siblings, domestic partner, parents of spouse/domestic partner and siblings and children of domestic partner):

• held any paid position or material contract (directly or indirectly) with FIFA and/or any Member, Confederation, League or Club (including any of their affiliated companies/organisations);
• was employed by FIFA’s outside legal counsel or by FIFA’s auditor (and was engaged in auditing FIFA);
• held any paid or voluntary position with a non-profit organisation to which FIFA and/or any Member, Confederation, League or Club makes annual payments in excess of USD 100,000.

The criteria of independence are strict and appropriate. However, interestingly, only the chairman or deputy chairman of the two relevant committees are required to be independent. Nothing is said about the members of these committees, suggesting that they do not have to be independent. This means that in practice a voting majority will not be independent.

Why did FIFA not require all members to be independent? This sets the stage for actual and perceived conflicts of interest in the actions of these two committees.

A further note -- under the proposed FIFA criteria of "independence" it is indeed the case that half or more members and the chair of the FIFA "Independent" Governance Committee fail to meet the criteria of independence.What this means is that it will be very difficult for this committee to say anything critical about this FIFA recommendation.

FIFA Lose 95-1

The Parliamentary Assembly of the Council of Europe has voted 95 to 1 (with 2 abstentions) to demand a “detailed and exhaustive” investigation into the 2011 FIFA presidential election that saw Sepp Blatter elected unopposed to a fourth term as president.

The only vote against the motion came from a Swiss delegate, and the two abstentions were Swiss and Danish. (See *** below for a brief tutorial on the Council of Europe and its Parliamentary Assembly -- football governance issues definitely makes one learn a bit about the vast arrary of European governance bodies;-)

Here is the PACE press release in full:

PACE demands ‘detailed and exhaustive’ investigation into FIFA’s recent Presidential election

Strasbourg, 25.04.2012 – Football’s governing body FIFA should open a “detailed and exhaustive” internal investigation into whether, and to what extent, the elected candidate in its recent election for President exploited his institutional position to obtain “unfair advantages for himself or for potential voters”, according to the Parliamentary Assembly of the Council of Europe (PACE).

In a resolution based on the report “Good governance and ethics in sport” by François Rochebloine (France, EPP/CD), the Assembly also called on FIFA to publish in full any judicial and other documents relating to the case of Swiss sports promoter ISL/ISMM, whose collapse in 2001 gave rise to allegations of kickbacks to FIFA officials in return for television rights. In particular, it seeks publication of the May 2010 decision which suspended criminal proceedings against “two natural persons and FIFA” for misappropriation of funds – after certain sums were repaid.

The Assembly said FIFA should “cast full light on the facts underlying the various scandals which, in recent years, have tarnished its image and that of international football”. The investigative powers of its Ethics Committee, in particular, should be significantly increased so that it could undertake “on its own initiative and at any point, internal investigations, including with regard to former officials”.

In the same report, the Assembly also proposed a comprehensive set of guidelines on good governance and ethics in sport for international and national sports bodies, as well as governments, to apply. These aim to promote financial fair play and discourage gross financial inequalities between clubs, protect young sportsmen and women, and improve transparency and accountability in sport’s managing bodies.

 ***A note on institutions

From Wikipedia, the Council of Europe:

The Council of Europe (French: Conseil de l'Europe) is an international organization promoting co-operation between all countries of Europe in the areas of legal standards, human rights, democratic development, the rule of law and cultural co-operation. It was founded in 1949, has 47 member states with some 800 million citizens, and is an entirely separate body from the European Union (EU), which has only 27 member states. Unlike the EU, the Council of Europe cannot make binding laws.

Perhaps the most well known body of the COE is the European Court of Human Rights (which is currently getting a good working over in the court of UK public opinion).

The Parliamentary Assembly of the Council of Europe:

Unlike the European Parliament (an institution of the European Union), which was created after the model of the PACE and also meets in Strasbourg for its plenary sessions (prior to 1999, in the PACE hemicycle), its powers extend only to the ability to investigate, recommend and advise. Even so, its recommendations on issues such as human rights have significant weight in the European political context. The European Parliament and other European Union institutions often refer to the work of PACE, especially in the field of human rights, legal co-operation and cultural co-operation.

Important statutory functions of the PACE are the election of the Secretary General of the Council of Europe, the judges of the European Court of Human Rights and the members of the European Committee for the Prevention of Torture.

In general it meets 4 times per year at Strasbourg at the Palace of Europe for a week. The 10 permanent commissions of the Assembly meet all year long to prepare reports and projects for resolutions in their respective fields of expertise.

The Assembly sets its own agenda. It discusses European and international events and examines current subjects which interest the populations of the countries of Europe. The main themes covered are human rights, democracy, protection of minorities and the rule of law.

The PACE vote on FIFA does not carry the force of law, but it does carry some considerable force in the international arena. We should expect a reply from FIFA or its Independent Governance Committee.

Council of Europe Comes Down Hard on FIFA

Last month I commented on the Council of Europe's report on corruption in sport and also on FIFA's reply to the report. Today, the COE has published an addendum to that report that includes a blistering response to FIFA (available here in PDF), including a call for an investigation of Sepp Blatter.

Most news coverage focuses on the inclusion in the addendum of testimony to the COE from Thomas Hildbrand, Special Public Prosecutor for the Canton of Zug (Switzerland), who discussed some previously unreleased details related to the ISL case. That is no doubt interesting, but here I focus on the rejoinder offered by the COE to FIFA's critique of its report.

The response is comprehensive and pulls no punches-- remarkably so coming from a government organization, particularly one as staid as the Council of Europe.

Here is how the response ends:

• Mr Blatter is the President of FIFA, but he is not FIFA and he should not confuse what is in his own interest with what is in the interest of the organisation he is supposed to serve.
• Asking FIFA to improve its governance, the transparency of its accounts and to take steps to shed light on the scandals which tarnish its image is hardly interference; it is just common sense.
• Lastly, the independence of sport – to which we remain committed – should not become a defence for those who abuse their authority. It is wrong to have accusations without proof, but it is our duty to ask for the truth to be sought and established.

The money managed by FIFA is money that belongs to football and not to its officials, but in addition no sports organisation can become a place where the law does not apply and where corruption and fraud are in practice tolerated and go unpunished. What is at issue here is compliance with the rule of law.

In the addendum the response to FIFA begins at section 11. It includes a response to a claim by FIFA that allegations made against its president Sepp Blatter in the dispute with Mohamed bin Hammam had been dismissed by the FIFA Ethics Committee. The response includes a call for an investigation of Blatter.

The COE responds as follows:

With regard to FIFA’s reaction to our third request, I asked for a copy of the full decision whereby the FIFA Ethics Committee rejected the allegations made by Mr bin Hammam against Mr Blatter and, if applicable, a document indicating the full extent of those allegations. FIFA has declined to provide us with a copy of those documents. Based on information divulged in the press, we know that the Ethics Committee dismissed all Mr bin Hammam’s allegations; but it also emerges that these allegations referred exclusively to the fact that Mr Blatter had been informed beforehand of the action which Mr bin Hammam was alleged to have taken. Accordingly, there was no investigation to determine whether Mr Blatter had been able to profit unduly from his institutional position – in a manner prejudicial to FIFA – during the period prior to the presidential election. A detailed and exhaustive investigation is imperative. We have the right to know the truth, and ascertaining the truth can trouble only those who have something to hide. Since the issue regarding Mr bin Hammam seems to be closed, I now propose clarifying our request and limiting it to verification of Mr Blatter’s actions, in the hope that it will at last be possible to rule out any misappropriation.

Strong stuff.

A small note -- the COE picks up on the same exchange rate red herring that I discussed here, but actually, the exchange rate effect is even less than that suggested by the COE.

The Poynter Review Project and Journalistic Standards at ESPN

Last month in a stinging column in the Sports Business Daily, John Carvalho, an associate professor of journalism at Auburn University, took issue with ESPN and its relationship with the Poynter Institute, an independent, educational organization in St. Petersburg, Florida. Carvalho's critique focuses on the lack of prominence of the relationship on the ESPN web site, the apparent lack of impact that the relationship is having, and the potential for a conflict of interest resulting from ESPN funding of the Poynter Institute.

Carvalho wrote:

My concern is the impact on the broader conflicts of interest involving ESPN’s double life as an outlet for objective news information and a producer of overly hyped programming. In these cases — for example, McBride’s appraisal of ESPN’s schizophrenic role in reporting and promoting college football realignment — the columns seem like window dressing. ESPN lets McBride and Fry reflect and ponder, but ultimately, they are left to their own ivory tower, worth only public relations points for ESPN, with no real change. . . after the 18-month term is up, ESPN will remain at its level of ethics, and Poynter, from its lofty position, will end up with sore arms and improved finances.

Today in the Sports Business Daily, ESPN responds to Carvalho's column:

The column offers no evidence of unethical behavior. It does assert we have a “conflict-of-interest filled daily business” and operate under a “double life as an outlet for objective news information and a producer of overly hyped programming.” While no specifics are provided, we assume the implication is that our business relationships conflict with our news reporting.

A few facts: First, it is not uncommon for news organizations to be part of larger companies that have relationships with entities upon which they report. CBS News, for instance, reported about controversy on the show “Two and a Half Men” and CBS Sports reported on the Masters not allowing women members. Like ESPN, CBS has a licensing agreement with the Masters.

These organizations manage this potential or perceived conflict by establishing clear rules and practices. We have a news division that manages our journalism. We have a programming department that acquires rights from leagues and conferences and manages our relationships. Neither interferes with the work of the other. The news group does not dictate our agreements. The programming department does not dictate news coverage. The guest column does not substantiate any ESPN coverage being influenced by business interests.

On this debate, ESPN comes out ahead -- they are correct that Carvalho does not offer any evidence of unethical behavior.

The financial relationship between ESPN and Poynter is visibly disclosed, though the exact terms are not. The potential for an actual or perceived conflict of interest always exists when there is a financial relationship between organizations. It would be fair to ask Poynter and ESPN to explain how they are addressing this possible concern. But to allege ethical problems goes too far.

After reading through the work done through the ESPN Poynter Review Project, I am impressed. ESPN has dramatically improved upon its previous ombudsman role and should be applauded for its efforts to improve sports journalism.

Jay Bilas on the NCAA

Jay Bilas, the former Duke basketball player and ESPN analyst, gave a keynote talk at the annual meeting of the College Sports Research Institute last week. At the Chronicle of Higher Education, Brad Wolverton reports on Bilas' remarks:

Among his criticism:

Amateurism, the bedrock principle upon which NCAA sports is based, is a sham. “Amateurism doesn’t provide us with anything of real value. It doesn’t make a person a better student. It doesn’t enhance their education. It doesn’t make them a better teammate,” he said. “All it does is provide a cap among college athletes.”

College athletes are the only people on campus whose compensation is capped, argued Bilas, a former Duke University player and Emmy Award-winning commentator. If the NCAA wants to pretend like athletes are just like other students, the association should remove that barrier and allow athletes to be paid the way any other student can be, he said.

His own nephew was just elected president of the student government at the University of Kentucky, where he is given an office, a parking space, six free tickets to every home basketball game, and $5,000 a year. “Anthony Davis, the national player of the year, gets nothing,” Bilas said, referring to the Wildcats’ freshman phenom.

NCAA President Mark Emmert likes to say that NCAA athletes are students first, who happen to be athletes, Bilas said. “Coach K recruited me at Duke. He didn’t come to my high school library and say, ‘You’re the kind of student we like at Duke. If you happen to play ball, great.’ He got me out of a gym,” Bilas said. “The idea that athletes are students first, that’s so stupid. Why do we try to sell that?”

College athletes are certainly not treated as students first. Bilas is right on target.

High School Sports and Educational Budgets: Evidence Please

In a commentary at the Chronicle of Higher Education, Steven Conn argues forcefully against sports in educational institutions. Conn, a professor of history at Ohio State University, makes some claims that are just begging for empirical support.

For instance, he asserts that financial support of high school sports may be a key factor in explaining poor academic performance of US students.  He writes:

There is a widespread consensus that our public-education systems are in serious trouble. But amid the conflicting diagnoses of the problem—teacher training, standardized testing, socioeconomic conditions—we have missed this obvious one: The growth of high-school athletics over the past generation has necessarily meant fewer resources devoted to academics, especially in the zero-sum budgetary environment of so many school districts. How many other educational systems pay for sports out of their education funds?

Strong claims should be backed up by evidence, and since Conn did not provide any, I looked into the subject.  I found little evidence to support the argument that support of high school sports has come at the expense of academics. To the contrary, there is more concern being expressed that cuts to sports budgets, as part of overall cuts to education, is limiting the ability of many to participate in sports as sports opportunities increasingly go to those who can "pay to play."

The US GAO recently released a report that looked at data through 2006 on school-based physical education and sports programs (here in PDF). It found that schools had turned to outside funding to mitigate budget cuts:

[S]chool officials reported challenges in providing sports opportunities, as issues related to transportation, facilities, and staffing have been compounded by budgetary constraints. For example, officials from some schools said funding to transport students to outside facilities for practices or games was limited. Other school officials cited difficulty in attracting quality coaches because of low pay and the large amount of time involved. Even so, some schools have mitigated some challenges related to sports by relying heavily on outside funding sources such as booster clubs and gate receipts and leveraging community facilities. Additionally, some schools charge student fees for sports activities, which may be a barrier for lower-income students.

Looking at more recent data, Up2Us, a non-profit focused on youth in sport, argues in a recent report (here in PDF), based on research conducted by Brian Greenwood, professor at California State Polytechnic University, that high school sports saw,

an estimated $1.5 billion in cuts for the 2010-2011 school year and an estimated 40 percent of school districts charging fees to play sports, or “pay-to-play” fees.

None of this data supports the claims advanced by Conn, and may even counter his arguments. Clearly better evidence is needed to assess trends in public funding for sports vs. academics.

It is certainly worthwhile to debate the role of sports in educational institutions, including their costs, their benefits and their proper role. However, such debates will not get very far if they are not based on solid data and evidence.

Swiss Federal Tribunal Overturns CAS

[NOTE: This post has been updated with a few small clarifications]

On March 27, the Swiss Federal Tribunal, the nation's highest court, overturned a ruling of the Court of Arbitration for Sport, marking the first time in its history that the CAS has seen a verdict overturned on substantive grounds (announced here in PDF). I posed a few questions about the ruling to Jean-Loup Chappelet, a professor at IDHEAP in Lausanne who is also one of the world's foremost experts on international sports governance. I report here what I learned from Chappelet and also some thoughts on the broader significance of the Tribunal's decision.

The CAS is an arbitration body incorporated under Swiss law, first established in 1983 by the International Olympic Committee to provide an independent, authoritative body to arbitrate disputes involving the governance of sport (the body does not arbitrate disputes originating on the field of play). Appeals can be made to the Swiss tribunal primarily on matters of procedure.

Chappelet tells me that "CAS is supervised by a Swiss Foundation (article 80 et seq of Swiss Civil Code) called "International Council of Arbitration for Sport" (ICAS). It functions under the framework of the Swiss federal act on private international law whose chapter 12 regulates arbitration in Switzerland." As such an arbitration body, the CAS is accountable to the provisions of Swiss law.

However, in its history, the CAS has never seen a decision that it has rendered overturned by the Swiss Federal Tribunal. The standing of CAS decisions has thus been absolute -- until now.

The Tribunal's ruling overturned a decision in which CAS upheld a ban imposed on Francelino Matuzalem da Silva, a football player who left FC Shakhtar Donetsk in 2007 on his own accord -- he says the reason was simply to save his marriage. Shakhtar did not recognize the legitimacy of the termination and filed for compensation from Matuzalem under FIFA regulations and the matter was taken to the FIFA Dispute Resolution Chamber, where a decision was given in Shaktar's favor.

Shakhtar was not satisfied with the amount of compensation that FIFA had judged that they were due, so appealed the FIFA DRC decision to the CAS, where a further judgment was given in Shakhtar's favor (details can be found here in PDF).  At this point, the dispute was not over whether Matuzalem had legally severed his contract or whether compensation was owed to Shakhtar, but over the exact amount of that compensation.

Matuzalem did not pay the amount awarded to Shakhtar and was consequently severely sanctioned under FIFA's disciplinary code, a judgment that was subsequently upheld by the CAS. The FIFA sanction was a ban on his ability to play. Matuzalem challenged the sanction under Swiss law, which is how it arrived at the Swiss Tribunal which rendered it's decision a few weeks ago.  Here is how the Tribunal characterized its decision (crudely translated from French):

Francelino da Silva Matuzalem filed an appeal in a civil case in Federal Court against the decision. The review authority of the Federal Court for the substance of CAS Awards is extremely limited, in exceptional cases, an award may be canceled for violation of the essential principles of the legal system, referred to as "order public "(Art. 190. of the Federal Law on Private International Law). A indefinite ban from practicing his profession as a footballer was threatened, due to the FIFA Disciplinary Code, in case he would refuse to pay high damages, which constitutes a manifest and grave violation of human rights and ignores the limits inherent in any contractual agreement. In fact, under the award under appeal, the appellant, if did not give the payment imposed, would be delivered to the arbitrariness of his former employer and his economic freedom would be limited to such an extent that the basis of his economic existence would be endangered...

Where this leaves the amount owed by Matuzalem and the state of sanctions I am not clear.

More broadly, Chappelet tells me that the list of challenges to CAS rulings is a short one:

There have been less than 10 such appeals since the creation of CAS and the Federal Tribunal (FT) has always decided in the favor of CAS except in 5 cases as far as I know:

• - An appeal in 1994 by horse rider Grundel who contested the independence of CAS from the International Equestrian Federation and the IOC. This resulted in the complete revision of the CAS Statute and Regulations and led to the formation of the ICAS, that would from here on out look after the finance and administration of the CAS, a task that was formerly executed by the IOC.
• - An appeal in 2007 by the tennis player Cañas in which the FT ordered CAS to reexamine its ruling to better explain how it had considered Cañas arguments. But this did not change the ruling.-
• An appeal in 2010 by Athletico Madrid who contested a CAS decision in a dispute with Sport Lisboa E Benfica, another major European football club.
• - An Appeal by the International Ice Hockey Federation in 2012 against a decision taken by CAS in favor of the hockey club CP Bern.
• - the appeal by Matuzalem, although it does not seem to be about CAS procedures. Now CAS must not only take into consideration what the sporting rules say but also their "lawfulness"

One point does seem clear, the Swiss Federal Tribunal's judgment to overturn the CAS in the Matuzalem case may establish a precedent -- practically if not jurisprudentially --  that will encourage more parties to appeal to the Tribunal for recourse on CAS decisions. If so, CAS will find itself to no longer be the court of final authority and an entirely new area of sports jurisprudence will have to be settled. Stay tuned.

Two Reports

I came across two interesting reports over the weekend.

One is the 2012 Deloitte Football Money League report, which has a considerable amount of interesting information on the financial performance of the top 30 clubs. It also has this nice schematic that simplifies the workings of the Europa Cup competition:

A second report that I read is from Ernst & Young and presents its estimates of the social and economic impacts of the 2014 World Cup on the Brazilian economy (here in PDF), and projects a significant set of outcomes:

The benchmark scenario used in this study indicates that the 2014 World Cup will produce a surprising cascading effect on investments made in the country. The economy will snowball, increasing by five times the total amount invested directly in event-related activities and impacting various industries. In addition to the R$ 22.46 billion spent by Brazil on the World Cup to ensure an adequate infrastructure and organization (see box on this page), the tournament will bring an additional R$112.79 billion to the Brazilian economy, with indirect and induced effects being produced thereafter. In total, an additional R$ 142.39 billion will flow in the country from 2010 to 2014, generating 3.63 million jobs/yearand R$ 63.48 billion of income for the population . . .

The boost to GDP for 2010-2014 is projected to be about $80B (US$).

There is an academic literature on "mega-events" like the World Cup, and the impacts of hosting (or event competing to host) such events are significant, and not always positive.  See more here.

Handballs and Ethics

Marius Ebbers of St. Pauli has won himself a place in the fair play hall of fame by admitting to a referee an undetected handball that resulted in a late-game go-ahead goal when playing Union Berlin earlier this week (see above). The goal was thus disallowed.

This event reminded one of my students of a vigorous debate that we had at my colleague Ben Hale's blog back during the 2010 World Cup over the Luis Suarez intentional handball at the end of the Ghana match (so Ricardo, this post is for you;-). Was that cheating?  I argued no (Ben, an ethicist, argued yes):

Ghana did not get screwed. The intentional handball in the box is covered by the rules and is severely sanctioned, with an automatic red card and penalty kick.

In every sport players face judgments about when to incur sanctions covered under the rules. A NFL cornerback will take a pass interference penalty rather than allow a touchdown pass. A NBA player will hack-a-Shaq when the game is on the line. And a soccer player will intentionally handle the ball when the alternative is a allowing goal that loses the game.

Ghana did not win this game. They had a great chance to do so, and a fair chance, covered under the rules. They simply did not capitalize.

Uruguay did not cheat. The had a player who consciously chose to incur a penalty. It would be no different than a dangerous tackle from behind on a breakaway.

If you want to talk about handballs and cheating, well, Ireland has a gripe. Ghana does not. You can argue for a change in the rules — fair enough — but playing fairly under existing rules does not make this episode cheating.

Ebbers situation was more like Theirry Henry's intentional handball in 2010 World Cup qualifying versus Ireland. Were Ebbers to have lied to the referee, a case could be made for cheating. He did not lie and the good karma that apparently resulted from this act enabled St. Pauli to score an injury time winner.

As they say -- ball don't lie.

"One and Done" is not a Problem

"One and done" refers to  elite college basketball players who attend college for one year and then leave for a professional payday. Some see the practice as improper or distasteful.  For instance, the New York Times recently editorialized:

A disquieting postscript to March Madness is the expectation that the starting five of the University of Kentucky’s national champion team — a mix of sophomores and freshmen — will soon jump into the professional basketball draft’s potential riches years shy of a diploma. Fans are right to ask whatever happened to verities like amateurism, education and team loyalty in college sports.

By the end of the editorial, the Times answered this question, in case there is any uncertainty:

Fans should recognize the commercial underpinnings of March Madness for what it is: a big business for universities that has little-to-nothing to do with education, except perhaps in the cynicism of the real world.

Writing at the blog of Barlow Garsek & Simon, attorney Christian Dennie explains that not much can be done in any case to prevent the practice of one-and-done:

[T]he NCAA cannot alter the landscape and, thus, cannot prohibit a student-athlete from leaving school after a successful freshman year. Such a practice would violate antitrust laws for which the NCAA would likely have no defense. The NBA and the NBPA, on the other hand, have authority to enter into collective bargaining agreements that restrict player movement and conditions for employment. In this case, it is a condition of employment that a student-athlete is nineteen years old and one year removed from high school prior to becoming a professional basketball player. In accordance with the nonstatutory labor exemption, an agreement between the employee and the employer to restrict entrance into the NBA is permissible (i.e., Clarett v. NFL). Additionally, the NCAA is not permitted to enter into the bargaining relationship between the NBA and NBPA. As was evident during the NCAA tournament, the NBA and the NCAA do not see eye-to-eye on this issue in light of David Stern and Mark Emmert’s verbal sparring about the one and done rule. In sum, unless the NBA and NBPA change the one and done rule through collective bargaining, it does not appear changes will be made anytime soon.

As a college professor, I see absolutely nothing wrong with the practice of one and done. Students leave college for many reasons, sometimes unwillingly (e.g.,, finances) but often by choice -- Look at Bill Gates or Mark Zuckerberg. If universities want elite college athletes to stick around, they will have to do as Dennie suggests, and provide some incentives that make it worth their while. Otherwise, for most elite athletes, leaving to secure a lucrative payday just makes good sense.

Social Norms and Sports Governance

UPDATE: Petrino was fired (after additional allegation surfaced) and Guillen was not -- go figure;-)

It has long been appreciated that governance is not just about rules, policies and procedures. Social norms also shape our behavior. As one recent academic discussion explains (PDF):

Social norms are customary rules of behavior that coordinate our interactions with others. . . This definition covers simple rules that are self-enforcing at a primary level, such as which hand to extend in greeting or which side of the road to drive on, and more complex rules that trigger sanctions against those who deviate from a first-order rule.

We see norms in action in two situations currently in the news.  In the first, Florida Marlins manager Ozzie Guillen has gotten himself into some hot water over comments he made about Fidel Castro:

The Miami Marlins have suspended manager Ozzie Guillen for five games for comments he made in which he expressed admiration for Cuban leader Fidel Castro.

"The Marlins acknowledge the seriousness of the comments attributed to Guillen," the team said in a prepared statement announcing the move. "The pain and suffering caused by Fidel Castro cannot be minimized especially in a community filled with victims of the dictatorship."

Marlins bench coach Joey Cora will be the interim manager during the suspension.

What does a baseball manager's views on Cuban politics have to do with the hit and run, you might ask?  Well nothing, but baseball teams are part of the broader community, and in this case, a Florida community with intense passions about Cuba. Guillen violated social norms.

According to ESPN, MLB supported the suspension:

In a prepared statement, baseball commissioner Bud Selig said MLB supported the suspension. He said baseball as an institution has "important social responsibilities," and he expects those representing the game to show respect and sensitivity to its many cultures.

"Guillen's remarks, which were offensive to an important part of the Miami community and others throughout the world, have no place in our game," Selig said.

In anther recent situation, the University of Arkansas head football coach Bobby Petrino has been suspended after he crashed his motorcycle. The crash was not  not the problem, it was the fact that he lied about having a 25 year-old staff member along for the ride -- one whom he suggested that he had a previous inappropriate relationship.

The Washington Post reports:

Bobby Petrino’s fate as head football coach at Arkansas remains up in the air one week after he crashed his motorcycle and attempted to cover-up a “inappropriate relationship” with a 25-year-old female employee.

Now Arkansas athletic director Jeff Long faces the unenviable decision of whether to retain Petrino and risk ridicule for appearing to condone his conduct, or terminate him and risk revolt from the Razorbacks fanbase.

Social norms are obviously an important part of governance.  The two cases discussed here show that positive comments about Fidel Castro are deemed sanctionable whereas lying and adultery may not be subject to sanctions. Given this diversity, it should be no surprise that those interested in the effective governance sporting organizations cannot depend upon social norms as the basis for motivating reform.

Barcelona: 32 Passes then a Goal

From yesterday -- It never gets old.

Is Watching Football Bad for your Heart? In Germany Yes, Italy No

Here are two interesting studies that looked at the relationship of heart attacks and football matches involving national squads.  A 2008 study in the Munich region found a marked increased in heart attacks when the German national team was playing (PDF):

On days of matches involving the German team, the incidence of cardiac emergencies was 2.66 times that during the control period... Viewing a stressful soccer match more than doubles the risk of an acute cardiovascular event.

A 2011 study in Italy found no such relationship among Italians (PDF):

We studied 25 159 hospital admissions for acute myocardial infarction (AMI) among the Italian population during three international football competitions: the World Cup 2002, the European Championship 2004 and the World Cup 2006... We did not find an increase in the rates of admission for AMI on the days of football matches involving Italy in either the single competitions or the three competitions combined.

Do Germans carry the weight of their teams fortunes closer to the heart?

H/T Science2.0

Friday Linkage and Pique's Girlfriend Sings About Football

Here are some links that crossed my desk this week that I did not get to blog about. And above is Shakira's 2010 World Cup serenade ... Enjoy!

• Want to study football? FIFA is offering a research scholarship, The  João Havelange Research Scholarship (here in PDF). I am thinking aboout submitting an application to study governance reform;-)
• Here is an IMF paper that looks at cricket to assess the long-term career impacts of luck. The paper was discussed in The Economist a while back. I'll dedicate a post to it down the road.
• Brazil vs. FIFA remains contentious, see here and here and here.  Quote of the day from a Brazilian Senator: "I will not make a deal with the devil to do the work of God."
• Last month The Economist had a nice discussion of doping in sport. this too is worth a dedicated post before long, perhaps around the time of the Olympics.
• Recently, I discussed the fuzzy line between sport and society when it come to on-field violence. Here are two very different articles about violence in Eastern European football and in youth sports in the US.

Have a nice weekend, and thanks for reading!

A Flaw in the Rules of Basketball?

As I often explain, sports are a great laboratory for research. This post describes a possible "flaw" in the sport of college basketball. By "flaw" I mean a contingency in the on-court play that is not covered by the rules or leads to an impossible result. In the broader society we see such contingencies arise all the time, as reality has no qualms about coming up with circumstances that are not covered (well) by laws and regulations That is of course one reason why there is a judicial system.

The "flaw" in the rules of college basketball is described by Bob Walsh, the blogging and Tweeting head basketball coach at Rhode Island College:

I'm a strong believer in fouling when up by 3 late in a game so your opponent can't get a 3 off. The great Dave Gavitt always gave me the best reasoning for this - if you foul, in order for you to lose the game, they have to do 4 things right: they have to make the first free throw, they have to miss the second free throw, they have to get the rebound, and they have to score. I've always felt that was a lot less likely to happen than them hitting a 3 to tie, even a tough, contested 3.

So you put your opponent in a situation where they have to miss a free throw to beat you. And after getting frustrated in practice with our inability to miss free throws to work on block outs, it made me think - why would you let your opponent miss a free throw when he needs to? If you violate the lane, they can't miss the free throw. Every time they miss, the whistle will blow and they will get another shot. Until they make it, which is bound to happen by mistake (thinking back to how often it happens in practice).

In other words, if a defensive player steps into the lane before the free throw shooter releases the ball, then under the rules the referee must give the shooter another opportunity if they miss the free throw. If the player is trying to miss the free throw on purpose, then this could go on forever or until the player (accidentally) makes the shot.

Walsh has actually used this strategy (at his post on the subject he links to a game video), and describes the reaction that he has received from referees:

Before we put the intentional violation in our time and score package I did ask a number of different officials what they would do in an intentional violation situation. Everyone of them said they had never heard of it or seen it before and had to think about it before answering. Some of them said they really didn't know what they would do. Others did say they would have to call a technical foul for delay of game. I asked them if they would just call it, or if they would warn me first, and everyone of them said they would warn me first. So a technical foul is eventually a possibility, but they certainly would come to you first and ask you to stop the violating before calling it.

But wait:

Interestingly I have talked with some Big East and other high level officials after that game, and a lot of them said the technical foul was not the right call. In fact, the actual official who did the game and said he was going to assess a technical was at a Big East camp that summer, and one of the supervisors told him it was the wrong call. He said you can't assess a technical there, the rule is clear it's another free throw attempt. So it is still clear that officials are not sure how to handle it as I get many different answers.

What this tells us is that even in a highly structured and rule-based game, contingencies can arise that are not well-covered by the rules. Sometimes, these contingencies arise because of changing technologies (like instant relay which led the NFL to define what a "catch" means) and sometimes because a clever coach has come up with an innovative strategy.

In both cases we learn that rules are organic and subject to revision based on the lessons of experience.

Mark Pieth Turns Up the Heat

Writing in the Telegraph, Matt Scott provides some interesting details on the FIFA Independent Governance Committee and its chair Mark Pieth.

First, it is clear that the IGC was not so "independent" with Pieth indicating that the recommendations of the IGC were, in a sense, "pre-negotiated" with FIFA:

But Pieth has run into significant opposition within Fifa. “We were asking for independence in the executive committee,” he told Telegraph Sport.

“But they’re terribly afraid of that. It’s one of the major challenges. We’ve said you need to look at the board of a corporation, with independent directors.”

Fifa want merely to have independent observers on the executive committee. “This is very much an ongoing part of the process. It leads up to the next congress [in 2013] and they need an awful lot of convincing. They believe their organisation doesn’t need to change at all. The further you go from Europe, the belief is stronger.”

In his initial report, released in September, Pieth recommended installing a supervisory board of directors that included several independent non-executive appointees.

However, he has dropped that idea. Instead, Pieth’s new report said: “To support their supervisory function, the [independent] chairs of the audit and compliance committee and the nomination committee should participate in the meetings of the ex-co; they should therefore have a seat in the ex-co.”

Yet there is no guarantee that this diluted recommendation will be adopted, with Fifa not voting on the matter until 2013, a year after the date indicated in the initial Pieth report. He concedes this could present a further challenge. “They might lose the resolve [to reform] the longer it goes on,” he said.

A characteristic of independent advice is that advisors advise and decision makers decide. If the decision makers play an active role in shaping the advice that they are being given -- in effect "pre-negotiating" the decision that they will take through the advisory process -- then the advice can hardly be said to be independent. When advice is provided, if it is not taken, then that decision is a responsibility of the decision maker, not the advisor.

In the interview Pieth also suggested that he is willing to go beyond an advisory role to seeking to instigate change from outside of FIFA:

Pieth did signal that he has already sought to go over Fifa’s head to the Government of Switzerland, where Fifa is domiciled. Having previously described the perception of his nation as a “pirates’ harbour” for potentially venal sports governing bodies, Swiss-born Pieth said.

“There is one more chance. I have personally talked to the Government of Switzerland whereby it could set up a regulator.

“There are 60 sports governing bodies in Switzerland and you need to regulate them. They could say to the organisations, ‘If you want to stay here and not be taxed we must introduce a regulator.’

“I have been to see the director of the federal office of sport and his key staff on the regulations and they are coming up with a report at the end of this year.”

This revelation is particularly interesting as Pieth is apparently going well beyond his charge as chair of the FIFA IGC and becoming an actor in the process of seeking to reform FIFA. (Somehow I doubt that FIFA has quietly asked him to do this;-) Swiss law is indeed one of the mechanisms that can compel FIFA to reform, however, Swiss officials have in the past shown little interest to reform the governance of sporting associations.

More generally, an advisor who simultaneously takes on the role of an agent of change risks both his standing and formal position as an advisor (see my writings on UK drugs policy advice and US Bioethics Commission to cite two parallel examples). The odds of a FIFA-Pieth split seem to be going up.

Why We Watch: NCAA 2012

Follow-up on the Pieth Report

Writing at Bloomberg Businessweek, Tariq Panja has a very interesting interview with Mark Pieth, in which Pieth opens up a bit and takes a harder line on FIFA reform effort.  Here is an excerpt:

Mark Pieth, a Swiss law professor who headed a 13-member committee that Blatter asked to improve corporate governance after graft allegations, said in a telephone interview some officials were uncomfortable with changes that affect them directly.

FIFA efforts to reorganize itself came after public and sponsor reaction to corruption allegations over bidding for the staging rights to its $4 billion World Cup and then Blatter’s re-election to a fourth four-year term in which he was the only candidate. His only rival Mohamed Bin Hammam quit a day before the organization last year investigated him for bribing voters in the Caribbean.

“It’s possible that some of the issues will not be accepted,” Pieth, who works at the Basel Institute on Governance and investigated corruption in Iraq’s oil-for-food program in 2004, said. “I am anticipating that and I have to reserve my judgment over whether it’s fundamental stuff or minor stuff.”

Blatter doesn’t reveal his salary. The 76-year-old has been either the general secretary or president of the soccer body for more than 30 years. Pieth’s group said pay should be decided by a remuneration committee and made public.

Pieth admits to the difficulty of change:

“Of course we all have our hopes and ideals but this organization will have to be convinced to change,” Pieth said. “There’s nobody above them to tell them what to do. You have to be realistic. Anything else is pretty naïve.”

Blatter has been president since 1998, an election that ended with his beaten opponent Lennart Johansson claiming foul play. Since then other scandals have emerged including the revelation that some senior officials took payments from its bankrupt former marketing partner ISL. The allegations have tainted the soccer body’s image and overshadowed the work it does in promoting the game around the world.

“Impunity is one of the real problems whatever outfit be it state or intergovernmental organization,” Pieth said. “If there are allegations and the allegations are credible and nothing happens that hurts and that makes people really annoyed and I understand that.”

My own assessment of the prospects for reform (from an academic paper currently out for review) come to substantially similar conclusions:

Securing change is all the more difficult when a large organization sits largely free from formal mechanisms of accountability. FIFA is one such organization. In some respects it can hardly be called “large” as it directly employs only a few hundred employees. Yet at the same time its membership includes people from almost every corner of the world and has an impact on the lives of billions of people.

The review presented in this paper indicates that with only a few exceptions FIFA sits free from the formal mechanisms of accountability that are employed to hold international organizations to accountability to their own stated goals. The exceptions are FIFA’s formal accountability to Swiss law under its articles of incorporation and FIFA’s accountability to its sponsors, who benefit significantly from their relationship. However, to date both circumstances suggest little ability or interest to shape the governance of FIFA in a direction of reform.

Writing at Play the Game, Jens Sejer Andersen expresses a similar view:

So whether or not you are disappointed with FIFA’s response last Friday 30 March to the much awaited report from the Independent Governance Committee (IGC) headed by Swiss professor Mark Pieth, depends on the degree of optimistic illusions you have kept with regard to FIFA’s ability to reform itself.

Yours truly must admit having lost most of his seductive illusions after following FIFA politics for 15 years. So I cannot really declare disappointed just because FIFA did not make decisions which would come as a breath-taking shock if they suddenly materialised.

No, FIFA President Blatter did not go to the press conference Friday afternoon with a message that the 24-strong Executive Committee had decided to start serious investigations into the allegations of massive corruption that hangs over a very big minority among them.

No, he did not advertise in-depth research into suspicions about fraud and dirty tricks in the selection of World Cup hosts Russia and Qatar in 2010 and into his own election almost one year ago.

No, he did not change his claim that the Swiss courts still prevent him from publishing the ISL dossier with its revelations of how 140 million Swiss Francs were given to mostly FIFA leaders as personal bribes. On the contrary, he added one misleading statement to this misleading claim, when saying that publishing the ISL dossier would be a “criminal offense”.

And no, Blatter did not state that everybody at FIFA would follow all recommendations made by the IGC as rapidly as possible, defying the sensitive ego’s at the helmet of FIFA.

But what he did, as he has done over and over again, was to declare the day historic because the Exco had taken unanimous decisions to bring the reform process forward.

“Forward” in FIFA terms means taking the minimal steps required to create the illusion of not standing still.

 So has the reform process just ended or is it only beginning? Time will tell.

The Emptiness of FIFA Reform

Last Friday FIFA, the international association that oversees football, released the report of its Independent Governance Committee chaired by Mark Pieth (here in PDF). The reform process has been the subject of frequent postings on this blog and is also the focus of an academic paper of mine currently working its way through the review process.

According to FIFA the organization "agreed to major reforms of its governance, in particular relating to ethics, audit and compliance." This is not quite accurate. Transparency International was far more accurate when it judged that FIFA"failed to push forward a comprehensive governance reform process today and send a strong signal they are committed to change."

The Pieth report is remarkably thin for a document purporting to set forth a road map for institutional reform. Were it a seminar paper from one of my grad students, I'd return it with a grade of "incomplete." For instance, the FIFA governance report is but a pale shadow of the rich and detailed report recently produced by Lord Woolf on governance reform of the International Cricket Council (here in PDF). Notably, it is also far less substantive that the "concept report" that FIFA paid Pieth to produce last year before being he was appointed as chair of the IGC (found here in PDF).

The thinness of the Pieth report stems from the fact that it does not actually provide much in the way of details, but simply outlines proposals that have already been proposed. The details of the proposals are in the hands of the three "task forces" established by FIFA on Statues, Compliance & Transparency and Ethics.

The Pieth report explains that:

the Task Forces have drafted a revision of the Statutes for Congress 2012 as well as several policy documents derived from the Statutes, which are due to be adopted during 2012 in order to allow the reform to be fully implemented.

The revised statutes and policy documents were not among the materials released by FIFA last Friday (I have emailed FIFA to ask for them). This means that the proposals that will be debated and discussed at the upcoming FIFA Congress in May are not in public view (and a close reading of the FIFA press release suggests that the proposed changes have not yet even been drafted.)

So much hinges on the revisions to the FIFA statutes that the Pieth report is chock full of the expression "to be" -- as in "to be adopted" --"to be fully implemented" -- "to be put in place" -- "to be accomplished" and on and on.

The result is an incredible amount of ambiguity. For instance, the report recommends that,

The Chair and the Deputy Chair of the Audit & Compliance Committee should be independent...

 This is a phrasing that sounds reasonable in principle, but the recommendation continues with,

...in accordance with the definition to be included in the FIFA Statutes;

Thus, the definition of "independent" -- which is absolutely key to the meaning of this recommendation -- has not even been defined, it is "to be included." Such lack of precision is unnecessary, as many of these issues and concepts are well established in other settings of governance and have even been applied to FIFA. For example, the report issued by Transparency International last fall (Safe Hands- Building Integrity and Transparency at FIFA) discussed mechanisms and substance of independent oversight in detail.

Even Pieth went into far more depth on issues of independence in the "concept report" (here in PDF) that he drafted for FIFA in advance of being appointed chair of the IGC. Contrast the following excerpt from the "concept paper" with the thin sentence from the IGC report:

[W]hen it comes to govern FIFA as an economic enterprise, the interdependence between FIFA and its members in terms of financial assistance, development programmes and realisation of tournaments raises serious independence issues. The governance systems of enterprises address such principal-agent problems by installing a board of directors, including a number of independent non-executive directors. . .

FIFA might thus consider installing a group of persons with the function comparable to independent directors. The group could structurally be combined with existing bodies, e.g. the Executive Committee could be completed by independent members. Ideally, these persons would be elected by the Congress, similar to the board of directors in a corporation, which is elected by the general assembly upon proposal of the board or of shareholders. They should meet independence standards for directors (i.e. no material relationship with FIFA or any of its members or the confederations either directly, or indirectly and should have adequate professional experience to perform the role, e.g. business administration, marketing and sales, finance and accounting, legal and compliance. In terms of duties and responsibilities, this group would decide on the adequate composition and organisation of corporate governance, compliance and business administration related committees, such as the Finance Committee, the Internal Audit Committee and the Ethics Committee (cf. above II.3.4.d)), in order to effectively and independently supervise management and the commercial/financial operations of FIFA.

It is only a slight exaggeration to say that in the 6 months from the issuance of Pieth's "concept report" to the release of the IGC report, almost all substance on the nature of FIFA reform offered by Pieth was watered down or just lost.

From Pieth's perspective the presence of countless ambiguities gives him a bottle full of "poison pills" that will allow him to disassociate himself from FIFA at any time with his reputation (largely) intact if when FIFA falls short of the recommendations he offered in his "concept report."

That Pieth has been fundamentally unable to change FIFA is not a surprise nor does it reflect poorly on him -- the task is simply too big for any one person or committee to take on. From a distance, it appears that Pieth quickly found himself in a bad situation from which he is only now able to extricate himself. Looking ahead, a parting of the ways, if not a messy divorce, seems inevitable.

Silvia Schenk, senior adviser for sport at Transparency International nicely summed up the report:

We had expected a more comprehensive introduction of new procedures. Too much is still unclear and key issues, such as investigations into the past allegations of corruption, have not been properly addressed.

To summarize, the Pieth report added very little if anything that is new substantively. Its fundamental ambiguities in the details of its recommendations essentially shift the focus of FIFA reform away from the IGC and out of view, kicking the can down the road. The report, and really the entire process, is a disappointment, which will not be a surprise to anyone who closely watches FIFA.