Tuesday, January 31, 2012

Lord Woolf's Review of the International Cricket Council

FIFA is not alone in the world of sports governance in having its governance practices closely scrutinized.  The world governing body for cricket, the International Cricket Council, will receive the report of an independent review of its governance this week.

The Telegraph has already predicted that the review's recommendations will meet strong resistance:
Woolf was commissioned to overhaul the ICC’s governance, a long-overdue project given the overtly political nature of a governing body that has never been able to rise above the vested interests of its members, most recently and obviously India.
Those same vested interests could yet stand in the way of the former Lord Chief Justice’s proposals, the most contentious of which is likely to be a recommendation to add independent directors to the ICC board.

Woolf is thought to be in favour of independent figures, but the proposal will be unpopular with several influential nations, including India, Australia and England.

The ICC board is dominated by the chairmen of the 10 Test-playing nations, and Woolf is thought to believe that independent figures will help add perspective and allow the board to make better strategic decisions.

In recent times ICC policy, including the number of teams in World Cup tournaments and the identity of the next chairman, has been set at the whim of powerful factions, sometimes in the space of a tea break.
Transparency International has submitted a detail report with recommendations for the ICC:
Cricket faces a number of obvious challenges — such as combatting the kind of spot-fixing that led to the sentencing of three Pakistani cricketers for corruption in 2011 — and those who manage the game must look at their existing structures.

Sport today is a multi-billion dollar business. Today’s sports governing bodies have to start operating as big businesses, using best business practices. The International Olympic Committee has already gone through a reform process; other international sporting bodies must too.

One of the key points we stressed in our submission is that while the players are the ones who face greatest public scrutiny, it is the administrators, both at the international and national level, who set the infrastructure and environment in which players and match officials operate. And this must be transparent and accountable.
The pressures on the ICC, FIFA and others suggest that while we may not yet be experiencing a "Sporting Spring," there are sure signs that the weather is changing.

Upcoming Seminar at University of Technology Sydney

I'll be giving a talk on the governance of FIFA next Monday, February 6 at 4PM at the Centre for Corporate Governance, University of Technology Sydney. If you are in the area and want to discuss FIFA, please do attend, and you can email me for details.

Monday, January 30, 2012

When God Saved BYU Football

I am currently reading Michael Oriard's excellent history of college football, Bowled Over: Big Time College Football from the 1960s to the BCS Era. In it he describes how in the late 1960s and early 1970s racial tensions and protests over football dramatically influenced several major programs, such as Wyoming and Oregon State.

Some of the protests focused on Brigham Young University, due to the Mormon church's policy against African-American's serving as priests. That prohibition was lifted in 1978 after God apparently revealed to the president of the Church that he had changed his mind about the priesthood.  Oriard writes that the protesting college football players "changed Mormon theology" (p. 110)

In 2005 the BYU Daily Universe newspaper described the events as follows:
Fourteen University of Wyoming football players in 1969 wanted to wear armbands protesting alleged racial policies at BYU. Because of a policy set in place by coach Lloyd Eaton that prohibited players from protesting, the football players were suspended...

The University of Arizona in October 1970 sent a six-member “fact-finding committee” to determine if BYU was racist after they said “rhetoric had escalated too far” with regards to racism and the Western Athletic Conference.

The Daily Universe reported that the school's committee determined BYU was not racist, but was an “isolated institution whose members simply do not relate to or understand black people.”

The findings were presented on Arizona's campus the same week. Still, when BYU football players showed up at University of Arizona’s stadium a week later, they were met by 75 picketers demonstrating against racism at BYU.

Although spokeswoman Carri Jenkins said BYU does not keep track of individuals by race and so cannot track who was the first black person to attend BYU, Zobell said there were a few black athletes during the 1970s.

That fact still didn't quell some schools' anger.

Stanford and San Jose State University both refused to play BYU in any sport because of what they called racism at BYU.

Then in 1978, President Spencer W. Kimball of The Church of Jesus Christ of Latter-day Saints announced that blacks were allowed to receive the priesthood.
In the 10 years prior to the revelation, BYU won 57 football games, and in the ten years following, 103. God must really love college football. (However, in fairness to God, LaVelle Edwards may deserve more credit.)

Saturday, January 28, 2012

Quantifying the Value of a Football Manager

In today's FT Magazine Simon Kuper has an essay on the evaluation of football managers in England's professional leagues based on the work of his Soccernomics co-author Stefan Szymanski, of the University of Michigan.

Here how Kuper describes Syzmanski's methodology:
[F]ootball does a bad job of valuing managers. Football managers are modern celebrities, yet the vast majority appear to add no value to their teams, and could probably be replaced by their secretaries or stuffed teddy bears without anyone noticing. Only a few managers, such as Sturrock and Alex Ferguson, consistently improve their teams. Yet some of these excellent few get overlooked. All these findings emerge from a 37-year study of English football managers...

If players’ wages determine results, it follows that everything else – including the manager – is just noise. Most managers are not very relevant. In the long run, they will achieve almost exactly the league positions that their players’ wages would predict.

Still, there is an important caveat. Players’ wages don’t explain everything – merely almost everything at most clubs. That leaves room for a few good managers to make a difference. The question then is: which managers finish consistently higher with their teams than you would expect given their wage bills? Or, to borrow a phrase from Real Madrid’s manager José Mourinho, who are the special ones?

Szymanski has tried to answer that question. He analysed the financial accounts of four-fifths of English professional clubs from 1973 to 2010, and identified the managers who consistently overachieved. These men are the elite.

We should note right away that Szymanski’s model gives more credit to overachieving managers at the top of football than at the bottom. England’s 92 professional teams are spread over four divisions. A manager in League Two who has the 90th smallest budget in England but manages to finish 80th nationwide is overachieving. However, a manager with the third-highest budget in England who wins the Premier League is probably overachieving even more.
Syzmanski looks at team performance (focused on 251 managers out of 699 total who held the position for 5 years or more and for which financial data was available for the period 1974 to 2010),  after accounting for the expected position given the wages, which exhibit a strong correlation with league table position, as shown in the graph below from UEFA (here in PDF).
After accounting for wages, Szymanski then attributes the balance of unexplained variance in final league position to the "manager effect," an assumption with shortcomings that Szymanski is well aware of -- Kuper explains "factors besides the manager might have caused each club’s overachievement."

The attribution of unexplained variance to the "manager effect" is a serious weakness in such studies.  This can been demonstrated quantitatively by looking at another recent effort to quantify the value added by the manager.

Bell at al. (2011) attempt to evaluate managers in a similar fashion to Szymanski, using less data and a more complex statistical methodology. Their paper, titled, "The Performance of Football Club Managers: Skill or Luck?" evaluates managerial performance 2004 to 2009 in the Premier League at the match level and account for a range of variables, such as injuries, suspensions, transfer spending . They find, as did Szymanski, that weekly wages alone explains more than half the variance in points awarded (56% to be exact).

But then they do something that I don't quite follow -- they create a complex multiple regression model that throws in a suite of variables (some of which are not statistically significant) and end up explaining only 20% of the variance (see their Table 1, p. 21), which represents a severe degradation from the simple bivariate model. They then attribute the remained 80% of unexplained variance to the "manager effect." If I've understood their methods correctly, this simply seems implausible.  (I've emailed the authors and they are welcome to correct any misinterpretation.)
Despite the different approaches, the results of Bell at al. and Szymanski are similar -- for instance, the best managers in the Premier League appearing on both lists are Ferguson, Wegner, Beneitez, Moyes.  Each of these managers has led teams with unusual success (Everton was top 6 in 3 of the 5 years looked at by Bell et al. and won promotion with Preston North End in the longer period looked at by Szymanski). So yes, these teams outperformed, with either Manchester United or Arsenal winning the Premier League championship in 15 of 20 seasons.

But were these teams successful because of the manager?  Or were the managers successful because of the teams? What if it was both? And more? The only way that these studies can answer this question is by assuming the role of the manager in the variance to be explained, which is, unfortunately, the exact relationship that these studies are trying to pin down. So if you buy the assumptions of how to attribute the "unexplained variance" then these studies provide an answer. But if you don't buy the assumptions, then you wind up right where you started.

Consequently, I am not yet convinced that anyone has solved the riddle of effectively quantifying the value added by a manager, though the efforts by Syzmanski and Bell et al. represent a good start.

Friday, January 27, 2012

Unpublished Letter to the Financial Times

I send the letter below to the Financial Times, but it didn't make the cut, so I am sharing it here. It is a response to Mark Pieth's op-ed in the FT last week.

Mark Pieth, chairman of FIFA's Independent Governance Committee, is no doubt correct when he writes (FIFA must show a red card to corruption, January 19) that sporting organizations, "should give themselves anti-corruption compliance programmes and conflict of interest policies comparable to corporations." However, his advice is undercut by the fact that under such policies, it is highly likely that he and half or more members of the FIFA committee would be judged to have a conflict of interest due to financial or subsidiary relationships with FIFA. In Pieth's case, it has been reported in the Swiss media that he was paid more than $125,000 to draft a short report for FIFA prior to being appointed as chair of the committee. Such blatant and undisclosed conflicts of interest among the FIFA committee members were one factor cited by the international anti-corruption agency Transparency International when they recently terminated their participation in the FIFA reform process. TI must have recognized that their good name was at risk had they continued to participate in processes in which FIFA thumbed its nose at basic standards of good governance. FIFA's committee deserves to be heard, but they have started their work with a deficit of credibility.

Roger Pielke, Jr., Professor
University of Colorado

Thursday, January 26, 2012

Tough Talk from Mark Pieth

InsideWorldFootball reports on some very tough talk from Mark Pieth, chair of FIFA's independent good governance committee:
Speaking to German newspaper the Frankfurter Allgemeine Zeitung, Pieth responded when asked whether he expected more scandals: "I cannot judge yet," before adding "it would surprise me if it went off without scandal."

Pieth also said: "We must see to it that the gangsters do not escape in the wake of reform detractors."
Gangsters?  Wow. Pieth offered a prediction as well:
"Many of those who now sit on the Executive Committee will not be there much longer," Pieth said.

"They will resign because of scandals."
More wow. He described the functioning of FIFA as a "gentleman's club":
Describing FIFA as an organisation which "lacks regulation" and with "a gentleman's club structures", he also said: "I would not say that FIFA is corrupt, but there are too many corrupt individuals in this structure."
Pieth also responds to some of the criticisms that he has recevied:
Pieth also took the opportunity to defend the fact that he is being paid by FIFA, describing it as a "red herring".

"Money always does create some risk, but I see no problem in our case," he said.
The fact that he is being paid for his services is not necessarily problematic. Rather, as I have argued, the non-disclosure of the significant payment from FIFA ($128,000 for for drafting a paper) prior to being appointed created serious credibility problems for a committee with the phrase "good governance" in its title.They need not have started off with that deficit.

Pieth's tough talk suggests that he is well sensitized to this issue, but the comments attributed to him suggest that has not yet addressed it head on. It does sound like Pieth's response to the criticism will be to recommend some strong medicine for FIFA. Stay tuned.

Wednesday, January 25, 2012

Bonita Mersiades on FIFA Reform

Bonita Mersiades is a former official of the Football Federation Australia (a position from which she was sacked), who was once called "one of the most powerful woman in Australian sport." Last month at the Chartered Secretaries Australia Conference she presented a scathing assessment of the current state of football governance (here in PDF). Below are a few excerpts.

What we seek is not complex: we want an international governing body that has the same level of transparency and accountability that we expect of our governments, major institutions and organisations. We want an organisation that is responsible to the many millions of people who play the game, the billions who are fans and one that meets standards befitting of its $1.3 billion turnover.

We believe that the only way in which real reform will be achieved is for good governments around the world to follow Damian Collins’ lead. FIFA deserves condemnation as it has brought football into disrepute – not on‐the‐field, but off it.

FIFA needs a clean slate. Governments, with the support of the corporate sponsors, should demand an interim time‐limited administration, led by an eminent person with a broad mandate to develop a new Constitution, governance arrangements and policies and to conduct new elections.
On the leadership of the FFA:
And, closer to home and thinking of the FFA, if Andrew Demetriou had been CEO of the AFL (Australian Rules football) for five years and had presided over a bid for an international competition which spent $46 million of taxpayers’ money and resulted in one vote; a national competition in which expansion had spectacularly failed and in which the clubs were losing between $20‐25 million a year; an 8% decline in participation rates of boys aged 5‐14 years playing the sport; six CFOs in five years; a 6% decrease in revenue and a 12% increase in costs; and a report from the Federal Government that showed the sport was in a state of financial calamity with its long term sustainability entirely dependent on the national team and the next TV deal, would he still have a job?

I suspect the answer would be no . . .
 Read the entire presentation here in PDF.

Monday, January 23, 2012

Three of Five

The Economist calls for women's tennis to adopt 3 sets of 5 as a standard match:
In itself, the shorter format demeans women. It gives ammunition to opponents of equal pay, who argue that women put in fewer hours and attract less interest than men. And the discrimination is unusually sexist. While most of the twentieth-century Olympic Games did not include women’s distance-running events because of similar old-fashioned prejudice, amends were made in the 1980s. Since then, women have competed in events as gruelling as the marathon with no ill effects. In tennis, meanwhile, the influence of the Victorian mindset is still apparent.
I agree.

The Superstar Effect: The Case of Tiger Woods

A colleague (Thanks MS!) points me to a neat paper by Jennifer Brown of Northwestern University and NBER published recently in the Journal of Political Economy titled, Quitters Never Win: The (Adverse) Effects of Competing with Superstars. The paper looks at the effects that Tiger Woods had during his prime on the golf scores of field in PGA tournaments. The paper hypothesized that the presence of such a dominant player would lead to diminished performance by other top players, based on a theoretical presumption of reduced effort by those players.

The paper utilizes an impressive set of data from PGA Tour events from 1999 to 2010 and arrives at the following top-line conclusions:
The main results of the paper are as follows:
The presence of a superstar in a tournament is associated with reduced performance from other competitors. In general, the adverse superstar effect is larger for higher-skilled golfers relative to lower-skilled players
Reduced performance is not attributable to the adoption of risky strategies. Players do not appear to be “going for the green” more in the presence of a superstar. Moreover, the variance of players’ hole-by-hole scores in PGA tournaments is not statistically significantly higher when Woods is in the field relative to when he does not participate.
Superstars must be “super” to create adverse effects: The adverse superstar effect is large in periods in which Woods is particularly successful and disappears during periods in which he is performing relatively poorly on the course.
Here are some numbers for the period 1999-2006:
In the first round, the performance of top-ranked players appears affected by the superstar. For major and regular events, top golfers’ first-round scores are 0.6 strokes higher when Woods is in the field relative to when he is not. In an examination of only regular events, the superstar effect is 0.54 strokes for the first round. The magnitude of the effect is substantial, particularly when one considers that an average of two (and as many as eight) players share first place after the first round of tournament play. Moreover, when we account for ties, the top two first-round scores in a tournament differ by an average of only 0.8 strokes. Note that unranked players’ scores are not significantly different when Woods participates. This nonresult aligns with the intuition that players who are low in the distribution of relative skill or who expect to finish in the nearly flat portion of the tournament prize distribution may not be adversely affected by a top competitor. For example, the difference between fortieth-place and forty-first-place prizes in an average regular tournament is less than $1,000; thus, a one-position shift in the distribution has little marginal impact on players’ performances. . .

In an examination of major and regular events, the tournament scores of ranked players are significantly higher when Woods is present: estimates suggest that the effect is between 1.3 and 0.7 strokes, depending on player rank. In only regular events, the superstar effect for top 20 players is positive but not statistically significant. In general, however, the size of the superstar effect is substantial for good PGA Tour golfers: on average, fewer than two strokes separate first and second place in PGA tournaments.
The paper also explores the possible influence of an impressive range of potential confounding factors, such as weather and television coverage and finds the results to be robust.

Why might this effect occur?  The author presents data on Davis Love III who can reportedly earn $100,000 per day making a corporate appearance. The downside of the adverse superstar effect are small by comparison:
To understand the impact of the effect on Woods’s competitors, I ask: What if a single average player were able to overcome his own adverse performance by exerting effort and post scores that were one stroke better in tournaments with the superstar? I simulate the total winnings of each of the ranked players, assuming that his scores were one stroke lower in all events with Woods between 1999 and 2006. On average, a golfer would have earned approximately $28,000 more. Given that an average top 200 player played in 12 events with Woods and earned $3.4 million from the PGA Tour during the 8-year period, the return to effort seems small. For example, in the simulation, a one-stroke improvement by David Love III would have increased his average per-tournament earnings by approximately $10,000—considerably less than his reported daily rate for corporate appearances.
What about Woods?
How much would Tiger Woods’s earnings have been reduced if all of his competitors played as well as they did when he was not in the field? In my main results, I identify a superstar effect of approximately one stroke for players ranked in the top 200 in the world. I simulate the distribution of prizes if all ranked players’ tournament scores had been one stroke better when they competed against Woods; that is, I removed the estimated superstar effect from players’ scores. In 34 of the 136 tournaments that I studied, the simulated improvement in competitors’ performance had no effect since Woods was sufficiently alone in the score distribution to avoid a rank-order shift. In 20 events, the simulation shifted at least one golfer into a tie with Woods in the final tournament standing; in the remaining events, Woods shifted from a tie at a higher prize position to a tie at a lower prize position.

My calculations suggest that Woods’s PGA Tour earnings would have fallen from $54.4 million to $48.4 million between 1999 and 2006 had his competitors’ performance not suffered the superstar effect. By my estimates, Woods pocketed nearly $6 million in additional earnings because of the reduced effort of other golfers—prize money that would otherwise have been distributed to other players in the field. Viewed in this light, the superstar effect is economically substantial.
It is good to be a superstar, and apparently not so bad just being super either.

The Blade Runner

The New York Times Magazine has a nice essay by Michael Sokolove on Oscar Pistorius, the South African sprinter born without lower leg bones and who runs on prosthetic legs.  The piece touches on the debate over the difficult question of what it means to allow or not allow Pistorious to compete with runners who do not use prosthetic legs.The debate involves science, values and governance.

Here is an excerpt:
[I]n 2007, the I.A.A.F. instituted a new rule, ostensibly not aimed specifically at Pistorius, relating to running-shoe technology that employed “springs.” It then turned its attention to the world’s most prominent disabled runner. The I.A.A.F. videotaped a race involving Pistorius and had its scientific advisers analyze it. Several weeks later, Pistorius underwent tests conducted by an I.A.A.F.-chosen researcher at the German Sport University in Cologne. The organization then declared him ineligible based on findings that his “bouncing” locomotion was an advantage and that he required less oxygen and fewer calories than able-bodied runners going at the same speed.

An athlete, under international rules, is considered eligible to compete unless a good reason is shown otherwise, not unlike a criminal defendant who is presumed innocent until proven guilty. So Pistorius did not have to show that he was not augmented, just that the other side had not proved he was.

In his appeal to the Court of Arbitration, Pistorius was represented by Jeffrey Kessler, a Manhattan lawyer well known in the U.S. for negotiating collective bargaining agreements on behalf of N.F.L. and N.B.A. players. Kessler demolished the I.A.A.F.’s case, and it may not have been that difficult to do so. “All of it was pretty much nonsense,” Herr said of the I.A.A.F.’s conclusions. Another member of the team that tested Pistorius in Houston, Peter Weyand, a professor of applied physiology and biomechanics at Southern Methodist University, put it differently. “They brought the wrong scientific case forward,” he told me.

The unanimous verdict of the three arbitrators said that the data assembled from Pistorius at Rice showed that he used “the same oxygen amounts” and “fatigued normally.” It criticized the I.A.A.F. for seeking out possible isolated advantages that Pistorius derived from his prostheses while disregarding disadvantages — for example, his slow starts because he cannot burst from the starting blocks as quickly as his competitors. The correct measure for determining his eligibility, it said, should be whether he has an “overall net advantage” over the whole of the race. On the question of whether the Cheetah blades are springs, the arbitrators wrote, “A natural human leg is itself a spring.” The report was most critical of the I.A.A.F. process itself, which it said went “off the rails” and all but called it a kangaroo court.
If Pistorious makes it to London this summer, you can expect the debate over running in international competitions on prothestics to be taken up in earnest.

Here is a link to a peer-reviewed paper on the science of running on prosthetics, co-authored by two scientists who have worked with and represented Pistorius, and who have subsequently seen their views diverge on the issue. And here is Pistorius running in the IAAF championships last year, he is in the outside lane.

Friday, January 20, 2012

Friday Linkage

Independence in the Penn State Inquiry

Louis J. Free, former director of the FBI, was hired last fall by the Board of Trustees at Penn State University to investigate the handling of the circumstances surrounding how the university and athletic department handled Jerry Sandusky, currently awaiting trial on various charges associated with alleged sexual abuse of children. Freeh is pictured above left with two members of the special committee of the PSU Board of Trustees, Ron Tomalis and Ken Frazier, chair.

After being briefed by Freeh this week, the Penn State faculty have raised question about the independence of the investigation, according to ESPN:
Freeh's investigative report into the worst scandal in Penn State's 156-year history will be made public after the second draft is reviewed by the board, he told the Faculty Council. Freeh's report will include recommendations for changes.

Freeh told the faculty members that only the Board of Trustees' special committee would be given the chance to review his draft reports, according to the faculty members who attended the meeting. Freeh said he would not share the draft reports with anyone else, they said.

"It was very easy to become suspicious about how fair this investigation is going to be," said one of the participants in the meeting, who spoke on condition of anonymity. "I find it very difficult for a contractor who is essentially hired by the Board of Trustees to do a thorough investigation of the Board of Trustees, especially if they are given the chance to look at a draft report and suggest changes that will be made before the report is released to the public."

A second faculty member who attended Freeh's meeting with the Faculty Council, an executive committee of Penn State's Faculty Senate, said the former FBI director's presentation "left questions in many of our minds just how independent his investigation or report are going to be."

In interviews with "Outside the Lines" this week, both senior faculty members referred to notes they had taken during the meeting with Freeh. They both said Freeh repeatedly referred to the work he was doing on behalf of his "client," which is the Special Committee of Penn State's Board of Trustees. The special committee is chaired by Kenneth Frazier, chief executive of Merck & Company, and a member of Penn State's Board of Trustees.

"When you keep referring to doing work for your 'client,' it takes the independent feel right out of an investigation," said one meeting attendee describing Freeh's remarks. "His 'client' is the board of trustees, so how can he investigate his own client? It's a farce."
Independence is, in principle, not a difficult criteria to meet in the process of empaneling a committee or hiring an investigator, even if participants are compensated for their time. But when it comes to governance related to sports organizations -- and Penn State is both a university and home to a sports organization --principles of good governance seem a bit more challenging to implement.

Thursday, January 19, 2012

Mark Pieth in the FT

Mark Pieth, chair of FIFA's "good governance committee," has an op-ed on the FIFA reform process in today's FT. Here is an excerpt:
I chair the Independent Governance Committee reviewing Fifa reform (though I write here in a personal capacity), which yesterday held its first meeting. The committee is going to make strong and explicit recommendations to Fifa. We are optimistic but not naïve. We expect considerable resistance.

In sports governance more broadly, two areas must be addressed. First, states must adapt their legal structures so that corruption cases can be dealt with effectively. Second, sports governing bodies need to put their own houses in order.
The piece critiques the Swiss government's oversight of international organizations incorporated within its borders:
Traditionally, law enforcement agencies have been hesitant to deal with crimes committed by sports officials. Switzerland, the host of over 60 sports governing bodies, has an additional problem, since its anti-corruption laws insufficiently cover bribery and bribe taking by private persons. Allegations against officials of Fifa and its confederations around the world have been persistent, surfacing every time a president was elected or a hosting decision was taken. There is a clear need to supplement the laws.
By contrast, the piece does not discuss FIFA or its governance in any specificity. For that I suppose we'll have to await their report.

Wednesday, January 18, 2012

Truth or Whitewash?

Writing at The Guardian, David Conn has an excellent post up on the fork in the road now faced by Mark Pieth and the reset of the "independent good governance committee" appointed by FIFA:
Football's world governing body, Fifa, could from Thursday face a watershed investigation into the corruption allegations lapping at its gates, or its Zurich HQ could be slapped with another coat of whitewash. The decision rests with the grandly titled independent governance committee, set up by Sepp Blatter, Fifa's president, to oversee the organisation's reform. Mark Pieth, professor of criminology at the Basel Institute, appointed by Blatter to chair this committee, told the Guardian that at Thursday's inaugural meeting it will consider an examination into what has been happening at Fifa.

"It is a matter for the independent governance committee to decide whether it is going to call for a fuller investigation into the past," Pieth said, "and who should be conducting it."

That will be a defining decision for a process that has struggled to attain any credibility since Blatter unveiled it in October, as the lead vehicle in what the 75-year-old termed his road map for reform.
As usual, Transparency International's Sylvia Schenk has some smart things to say:
The anti‑corruption organisation Transparency International, whose co-operation in charting the road map was liberally name-dropped by Blatter at that unveiling, initially praised the initiative but then refused an invitation to sit on the committee. Sylvia Schenk, TI's senior adviser for sport, questioned Pieth's independence from Fifa, because Fifa has already paid his institute, reportedly CHF120,000 (£85,000), for writing a preparatory report, Governing Fifa. Schenk also reiterated TI's recommendation in its own report that any reform must begin with an investigation and genuine clean-up of the governing body's past. . .

Schenk, of Transparency International, said a full investigation is vital if faith in Fifa is to be established. "You cannot go into the future and have credibility if you have many allegations about Fifa and senior people still there," she says.

Schenk explains how an organisation with a genuine will to reform would conduct such a process: "You appoint a body to conduct the investigation, for example a specialist law firm. They would look at the serious allegations and invite people to come forward confidentially with evidence. Then they would review which allegations are serious, and which evidence credible, for full investigation. Now you can say the ISL allegations are serious, as are those about Sepp Blatter's election."

Pieth's own report said the World Cup bidding process is open to "corruption, risk and conflict of interest concerns". Schenk says an investigation ought certainly to include the circumstances of awarding the 2018 and 2022 World Cups to Russia and Qatar respectively, and, she said, the 2006 event to Germany. "If you do not clear the allegations over such important matters, there can be no credibility for the future and there will be no peace for Fifa."
Pieth has found himself in a very difficult situation, somewhat of his own making. Given the composition of the committee, I would not be surprised to see the committee explain that an investigation into the past must be done, and someone should do it ... but just not them.

FIFA vs. National Sovereignty: Beer Edition

Reuters reports:
Beer will sold at the 12 venues of the 2014 World Cup finals, FIFA general secretary Jerome Valcke said on Wednesday as he attempted to close all further discussion on a controversial issue in Brazil.

Voting on the bill for the World Cup Law has been held up over differences between the tournament hosts and world soccer's governing body, notably on the sale of alcoholic drinks at sports venues which is banned in Brazil.

The bill was scheduled to have been voted on by the chamber of deputies at the end of last year but it has been delayed by several issues including the sale of beer, with FIFA demanding protection of sponsors' trademarks.

"Alcoholic drinks are part of the FIFA World Cup, so we're going to have them. Excuse me if I sound a bit arrogant but that's something we won't negotiate," Valcke said.

"The fact that we have the right to sell beer has to be a part of the Law," he told the foreign press corps in an interview in Rio de Janeiro, where on Thursday he will hold a meeting with the World Cup local organizing committee (LOC).

Alcoholic drinks have been banned in Brazil's stadiums since 2003 as part of the Supporters' Statutes, aimed at preventing violence among hardcore fans at football matches.
If Brazil refuses to give in to FIFA's demands, perhaps this will be the first World Cup venue changed due to a fight over beer. (Unlikely.)

What I am really interested in is how FIFA and Qatar will negotiate alcohol sales in 2022. (Carefully.)

Chronicle Roundtable on the Future of the NCAA, Parts 2 and 3

Following up from last week, here are the 2nd and 3rd parts of The Chronicle of Higher Education's roundtable discussion with Taylor Branch, historian, C. Thomas McMillen, former athlete, former member of Congress who is active in NCAA governance, and Jeffrey Orleans, former executive director of the Ivy League.

FIFA Inspires Effort to Change Swiss Law

One of the most direct mechanisms for holding FIFA accountable is under Swiss law where the association is incorporated. Switzerland is home to various multi-national organizations, including numerous sporting associations, because the Swiss government provides favorable treatment. But FIFA's various shenanigans have led lawmakers to initiate steps to tighten up some of that favorable treatment:
Carlo Sommaruga, a Geneva-based lawmaker and member of the Swiss Socialist Party, scheduled a proposal to make the bribery of individuals a criminal offense, he said today in a telephone interview from Geneva. . .

“I took FIFA as an example for my initiative to change the corruption laws after the corruption allegations centered around awarding the World Cup to Russia and Qatar,” Sommaruga said. . .

In a Dec. 12 session 14 of 25 members of the Swiss legislative commission that votes on law questions supported the Sommaruga’s initiative. To move the proposal forward, the same commission in the upper house of parliament will have to vote on whether the action is needed. . .

Currently there are no legal provisions for public prosecutors to investigate bribery at sports bodies like FIFA, which in Switzerland have the status of tax-privileged associations.
It is unclear what the prospects for passage of the proposal are in the Swiss legislature. The proposed action even if passed into law would be a small step -- if the Swiss government wanted to do something about FIFA, it has many tools at its disposal, waiting to be used.

Monday, January 16, 2012

FIFA News Round-Up

Various FIFA news today:

Friday, January 13, 2012

At the NCAA Convention yesterday Mark Emmert. NCAA president delivered the speech shown above. Here is how the AP reported on the speech:
NCAA President Mark Emmert would like to erase all the tawdry tales from his first full year in office.

On Thursday, Emmert asked university leaders to help him turn the page on a disastrous 2011 that included a child sex abuse scandal at Penn State that overshadowed NCAA violations at a handful of major football programs. Emmert wants to restore some of college sports’ core principles -- choosing education over money, amateurism over professionalism and abiding by the rules rather than ignoring them.

“What we have to do is work together to act on those values, to let the world know which fork in the road we’ve taken so we don’t have the same story line this year that we had last year,” he told about 2,000 delegates at the annual convention, just a few blocks from the NCAA headquarters.

“I know we can do it. We can do it in 2012.” For roughly 30 minutes, Emmert again expressed frustration with the rash of infractions charges, alleged ethical breaches and possible criminal conduct in 2011.

And Emmert made it perfectly clear how upset he was by striking a far different tone Thursday than he did in his first state of the association address last year in San Antonio, Texas. There, Emmert paraded “model” student-athletes across the stage, a production that even included eventual Heisman Trophy winner Robert Griffin III.

This time, speaking sternly and with few laugh lines, Emmert broadly recounted some of the most damaging phrases he’d heard: College sports is about winning at all costs, it’s all about the money, everybody cheats and the term student-athlete is an oxymoron.

“I’ve heard people say that there are no ethics and no integrity in college sports and the whole system is broken. But here’s the really bad news. There’s truth in some of those criticisms,” Emmert said. “What parts of those stories are true? Sometimes we have seen behaviors that don’t match our values. We do have some people that want to win at all costs. We have some student-athletes that don’t care about getting an education and some that simply don’t get the education they deserve. The worst thing to me is that they completely overshadow all of the good things that are going on in intercollegiate athletics.”

The push for change has already begun.

Thursday, January 12, 2012

Why We Watch

The Chronicle Discusses the Future of College Sports

The Chronicle of Higher Education conducts a roundtable discussion on the future of college sports with Taylor Branch, historian, C. Thomas McMillen, former athlete, former member of Congress who is active in NCAA governance, and Jeffrey Orleans, former executive director of the Ivy League.

Above is Part 1 of 3. I'll post up the next 2 parts shortly.

Wednesday, January 11, 2012

Incentives Matter: Why the Lack of NCAA Basketball Road Games?

The WSJ reports that the top NCAA men's basketball season is now half over and 20% of teams have yet to register a road win:
The problem isn't so much that no one can win on the road (although it is notoriously difficult in men's college basketball). It's that teams hardly try.

Kentucky is the worst offender of all. The Wildcats, who should get their first true road win Wednesday at Auburn, have played just one road game, which they lost to Indiana.

Top programs tend to spend almost all of their pre-conference schedules playing glorified exhibition games at home and neutral-site tournaments. Because of this, teams that are expected to make the NCAA tournament can get well into January with highly sketchy résumés.
If you do the math you'll find that the AP top 10 teams (on January 9th) have collectively played 162 games with only 29 of them (or 18%) played on the road.

The reason for this situation would seem to be obvious: so long as coaches are rewarded for victories and a ticket to March Madness is a function of reaching a mythological 20-win threshold, then coaches and athletic departments of the stronger programs will try hard to fill the schedule with cupcakes at home.

Tuesday, January 10, 2012

Are the 2012 Olympics a Keynesian Stimulus?

Last week, Jeremy Hunt, the UK Culture Secretary, characterized the UK government's spending on the 2012 as a Keynesian stimulus to the economy:
The minister responsible for the Olympics rounded on those attacking the government for spending money to promote the UK, saying the event was “a massive Keynesian boost to the economy”. . .

“I do think it’s a stroke of luck that we are hosting the games right now,” he said. “There are people who say that doing a project like this is a massive Keynesian boost to the economy. That is definitely the case, in terms of the money being spent.”
Writing on his blog at Forbes, Stephan Szymanski, an economist at the University of Michigan who studies the business of sport, takes strong issue with that claim:
To be Keynesian, there needs to be additionality. Already planned government expenditures cannot restore confidence or demand since they formed part of peoples’ expectations and beliefs before the recession occurred. The core of Keynesian theory is the restoration of business confidence by providing a pleasant surprise to compensate for the unpleasant shock.

Now, if the government were to announce that it was going to go over its budget and spend an extra, say, £5 billion on the games (above and beyond the £9.3 billion) then this would qualify as a Keynesian stimulus, but we are not likely to hear a confession along these lines any time soon.

But even then, this would be nothing more than a drop in the ocean. Gordon Brown’s stimulus package in 2008 was £500 billion, and some economists argue that even that was too little. But the present government with its commitment to cutting the budget deficit and public debt are in any case pursuing the opposite of a Keynesian policy. This is hypocrisy of the highest order.
You can see Szymanski's 2011 presentation on the Economics of the 2012 Olympics which he presented at the Play the Game conference here in PDF and in the video below.

Play the Game 2011. Plenary session: Chasing the White Elephants - Mega-events for the Public Good, part 2 from Play the Game on Vimeo.

Monday, January 9, 2012

The Stuff of Dreams

Frontline on the NCAA, Parts 2 and 3 of 3

Watch Money and March Madness on PBS. See more from FRONTLINE.

Watch Money and March Madness on PBS. See more from FRONTLINE.
Part I of this excellent documentary is here. Discussion coming later this week.

FC Sion Docked 36 Points by Swiss FA

In the latest turn of events related to FC Sion's row with FIFA, the Swiss FA has capitulated to FIFA's threat to sanction the national association if it did not penalize the rogue club. The Swiss FA has levied a 36 point penalty -- 3 points for every game in which the disputed players participated in -- effectively relegating the club for next season.

While the Swiss FA implemented only part of FIFA's demands, FIFA was quick to accept the punishment and declare the matter closed.  For its part, FC Sion have filed criminal charges against FIFA (for extortion) and the club's supporters (pictured above) are none too happy about the turn of events.

It is hard to keep track of FC Sion's various legal maneuvers in civil courts, at the CAS and now in criminal courts. I'd guess that their wage bill for lawyers might exceed that of their players.

Sunday, January 8, 2012

FIFA Responds to Warner's $1 Rights Allegation

FIFA has responded to Jack Warner's allegations that he was able to purchase TV rights to the 1998 World Cup for $1 in exchange for supporting FIFA president Sepp Blatter (both seen above in friendlier times):
FIFA replied that Warner had been awarded television rights for Trinidad since 1986 and that it was normal practice at the time for them to be provided for only a symbolic fee.

"Until 1998, TV rights were provided by the rights-holders for symbolic sums in many territories (for example in Africa), in order to maximise the worldwide television coverage and also to support national associations and confederations with a source of revenue for football development," it said.

It added: "Jack Warner obtained the TV rights for the FIFA World Cup in the Caribbean, for the purpose of supporting football development in the Caribbean Football Union, already in 1986, and not 1998.

"Such rights were ceded in order to provide an additional source of revenue for football development in the CFU."

It added: "TV rights for the 2002 FIFA World Cup in the Caribbean were approved by the FIFA executive committee at their November and December 2001 meetings, not after the 2002 elections."
We have a situation of he said-they said -- which is utterly impossible for any observer to make sense of without further information. At least one close observer is not satisfied with FIFA's response --Damian Collins, British MP says:
"[FIFA] have not provided satisfactory answers to these questions at all, especially as to why TV rights to World Cup finals have been handed out to senior members of Fifa's executive committee."
Whatever the truth of the matter, there is an important lesson here. Transparency in business dealings is no just a good idea, but it can protect an organization against allegations.

If Warner is correct in his allegations, then great transparency would have prevented the corruption from occurring in the first place.

If FIFA is correct in its refutation, then greater transparency would protect the organization from false clases, which would be more easily refuted.

Either way, greater transparency makes very good sense.

Friday, January 6, 2012

Did Mark Pieth Threaten a Journalist with Legal Sanctions?

The letter from journalists to Mark Pieth (which I discuss here), chair of the FIFA "Good Governance" committee, contains an explosive allegation -- that Pieth threatened a journalist with legal action in order to try to keep hidden FIFA's payments to him:
[W]e are concerned that Professor Mark Pieth, through an employee, threatened legal action against one of our colleagues investigating how much Pieth was paid by FIFA and how much he will get from FIFA in future for the work in the so called Independent Governance Committee (IGC), although Professor Pieth eventually confirmed the figures.
I do not know Mark Pieth, though he is widely respected in the community. Thus, I find the allegation levied above to be both remarkable and troubling, especially so for an academic who has written the following (p. 188, here in PDF) in the context of recommendations on "good governance" to the United Nations:
In order to safeguard against conflict of interest situations, a robust financial disclosure and conflicts of interest regime should include a requirement that all United Nations staff and consultants, including "$1 dollar a year consultants," disclose in writing to the Ethics Office any financial interest or business relationship of his or her own or of immediate family members that could represent a conflict with his or her responsibilities or that could reflect unfavorably upon the integrity of the Organization.
Pieth should respond to the allegation.

Journalists Refuse FIFA's Invitation to Testify

FIFA's "Good Governance" Committee, chaired by Mark Pieth, has invited a dozen journalists to provide testimony to the committee as input to its deliberations. Apparently, the hearing is supposed to be off-the-record and behind closed doors -- That in itself is a damning statement about the integrity of the reform process.  Several of the reporters are refusing to participate, and have written a letter to Mark Pieth explaining their decision.

While I understand the principled stand of these journalists, my two cents of advice to them is to participate in the process, even if they see it as deeply flawed. By testifying they place the ball in FIFA's court to respond. By not participating they give FIFA a free pass to ignore their critiques. 

Here is an excerpt from the letter, signed by Andrew Jennings, Jens Weinreich and Jean François Tanda and a similar letter was sent by Thomas Kistner, detailing 20 questions/recommendations from these journalists:
What should be happening:
  1. Without delay Blatter can and must publish his personal copy of the report by Zug Investigating Magistrate Thomas Hildbrand into kickback corruption at FIFA and the recipients of more than 140 million Swiss Francs (US$100 million) in bribes paid by former marketing company ISL/ISMM.We are advised that there is no legal impediment to Blatter putting his copy online today. We do not believe his claims that unnamed people are delaying publication by him. We are told that the report destroys his claim in June 2010 to have been ‘cleared’ by the investigation.
  2. Blatter should publically instruct his friend Jean-Marie Weber, who organised the 140 million Swiss Francs  worth of kickbacks paid by ISL, to disclose the identities of all sports officials who received them.
  3. FIFA should adopt immediately genuine transparency. This means putting all FIFA information online – as do all first world governments – including audio/visual streaming and written minutes of all committees, accompanied by all reports submitted. All votes on all occasions must be recorded by name.
  4. FIFA’s published accounts are a disgrace, designed to disguise how football’s money is spent – and on whom. KPMG should be replaced by an auditor committed to transparency.
  5. Publication of all confidential management letters from auditors KPMG since 1999. These contain explosive evidence about misuse of FIFA funds and criminal money-laundering through FIFA’s Finance Department.
  6. All FIFA financial documentation since 1998 when Sepp Blatter became FIFA President should be put on-line – and then subjected to independent forensic examination.
  7. This material should include all payment orders made by Blatter using his astonishing power to be sole signatory of cheques. Let the world see a list of who got the money.
  8. FIFA’s Finance Department must produce the documentation of the $1 million kickback of March 3, 1997 from ISL to Havelange that was mistakenly sent to FIFA’s UBS account and then re-routed by General Secretary Blatter to Havelange.
  9. Immediate suspension of FIFA ExCo member Nicolas Leoz, identified in court in Zug in March 2008 as the recipient of $130,000 in bribes from ISL. (Later we discovered he got an additional $600,000!)
    FIFA can achieve the above, swiftly, without any outside intervention. That would show a genuine commitment to reform. Then the investigations can commence.
  10. We think that the only credible approach is for Professor Pieth to be empowered to hire a reputable, independent investigative company to conduct due diligence into all areas of alleged FIFA corruption. We suggest the following crucial areas of investigation followed by rapid publication:
  11. The salaries, bonuses and other benefits paid in the last decade to Blatter, Jérôme Valcke and all departmental directors.
  12. All fees, bonuses and expenses – submitted and paid – of ExCo members in the last decade. And details of their Swiss tax arrangements.
  13. The contracts and cost since 1998 of Blatter’s use of expensive chartered jets, his destinations and justifications for trips.
  14. The allegations of corruption in the awarding of the 2018 World Cup to Russia and to Qatar in 2022 and the actions, where appropriate, of ExCo members Issa Hayatou, Jacques Anouma, Hany Abo Rida and Amos Adamu. This crucial investigation should be handled professionally by law enforcement agencies or an independent investigation company, and where possible, liaising and assisting the current FBI investigations.
  15. Investigating all aspects of the FIFA-related activities of Worawi Makudi of Thailand including the disclosure of money from FIFA’s Goal and FAP-programme and also World Cup TV rights for Thailand.
  16. Investigation of allegations made in Argentina that FIFA finance committee chair Julio Grondona controls offshore accounts, mostly in Switzerland, containing $120 million. There seems no obvious source of this wealth.
  17. Investigation is long overdue into how Chuck Blazer could simultaneously be both Treasurer and General Secretary of CONCACAF – and the secret payment to him of $10 million in recent years as ‘commissions.’ Have his offshore assets come from FIFA funds – including his vintage Mercedes car registered in Zurich in FIFA’s name?
  18. Re-open the investigation into Jack Warner and extend it to embrace every payment of any kind since 1998 to Warner, members of his family, companies owned by him including Simpaul travel agency, the CFU, CONCACAF and the João Havelange Centre of Excellence.
  19. Investigate Blatter’s election campaign expenses for every election including 1998. In that campaign he charged his expenses to FIFA.
  20. Who paid Walter de Gregorio and Brian Alexander to organise Blatter’s campaign in 2011 to retain the Presidency? Mr Alexander does not appear to be employed by FIFA but he briefs reporters at FIFA House on behalf of Blatter. Who pays him now?

Thursday, January 5, 2012

Frontline on the NCAA, Part 1 of 3

Watch Money and March Madness on PBS. See more from FRONTLINE.
Part 1 of Frontline's excellent look at the NCAA. I'll discuss in a subsequent post, after putting up Parts 2 and 3.

Big Stakes for Les Miles

The Chronicle of Higher Education reports:
A win in next week’s BCS national title game would give LSU coach Les Miles a $5.88-million salary increase, CNBC’s Darren Rovell reports. That’s thanks to a clause in his contract guaranteeing him a minimum of $1,000 more per year than the highest-paid SEC coach should he win the national title.

Right now the league’s highest-paid coach is Alabama’s Nick Saban, Miles’ opponent in the BCS contest. Saban is scheduled to make a base salary of $4.73 million in 2012. Miles, who makes $3,751,000, would then be bumped to $4,731,000. That’s a boost of $980,000 a year for the remaining six years of his contract.
Amateur athletics indeed.

My Bundesliga Dreams, Shattered

The Bundesliga is taking advantage of the mis-season break to publish some interesting statistics on the players in the league. The average age of players is declining:
One trend is clear over that time-span: the average age of a top-flight team's most influential players is coming down. Ten years ago, for example, 25 was the age that represented the most on-the-pitch time in the Bundesliga. This season, the 23-year-olds lead the way.
"Older" players are also getting younger:
While coaches are giving promising talents the opportunity to establish themselves ever earlier, the prospects for those at the other end of the age scale are not so rosy. Many players over 30 are now having to plan for their "second career" considerably earlier than used to be the case. In an interview with the football magazine 11 Freunde, Borussia Mönchengladbach's youth team coordinator Roland Virkus confirmed the trend: "The lads are already being physically and mentally prepared for a professional career at youth level. But I think the overall cycle will change again. The performance curve of the current generation is moving rapidly upwards at an early age, but it will drop off earlier as well. Many players could well be peaking at 26 or 27."

At any rate, the possibility of an outfield player taking to the pitch these days at the ripe old age of 43 seems distinctly far-fetched. Klaus "fir tree" Fichtel did just that for Schalke 04 back in 1987-88, setting a new benchmark for Bundesliga seniority that stands to this day. By way of comparison, 36-year-old Hannover 96 midfielder Altin Lala is the oldest Bundesliga player to turn out this season.
Now that I have reached that "ripe old age" I guess it is time to give up hopes of making an appearance in the Bundesliga ;-) There will always be Boulder Indoor Soccer!

Wednesday, January 4, 2012

Deadspin on the New Offsides Coin from the Royal Mint

Deadspin on the new Olympic coin from the Royal Mint:
The image "is designed to provoke discussion," but I think the real discussion centers on the square team running the rare 1-6-3 formation.

A Lesson in Legitimacy from the FA

The English FA's 115 page report (here in PDF) on its investigation of Luis Suarez of Liverpool, who was accused of racially abusing Patrice Evra of Manchester United, is an object lesson in transparency and accountability, which results in enhanced credibility and legitimacy of the organization. FIFA should take note.

The report goes into excruciating detail as to what happened on the pitch, carefully soliciting alternative points of view among participants and even requesting academic experts to weigh in on how to interpret slang and insults across multiple languages used by players in the heat of a high-pressured match.

The FA commission judged that Patrice Evra was the more credible witness, for a range of reasons, and hence decided to level a sanction against Suarez. But the judgement itself is largely irrelevant to the issue of legitimacy. Indeed, one could completely disagree with the judgment and still find the process to be legitimate.

This is exactly what Liverpool FC has done. In a statement released yesterday, after some huffing and hawing, the club announced that it will accept the sanction against their star player:
Liverpool Football Club have supported Luis Suarez because we fundamentally do not believe that Luis on that day - or frankly any other - did or would engage in a racist act. Notably, his actions on and off the pitch with his teammates and in the community have demonstrated his belief that all athletes can play together and that the colour of a person's skin is irrelevant.

Continuing a fight for justice in this particular case beyond today would only obscure the fact that the Club wholeheartedly supports the efforts of the Football Association, the Football League and the Premier League to put an end to any form of racism in English football.

It is time to put the Luis Suarez matter to rest and for all of us, going forward, to work together to stamp out racism in every form both inside and outside the sport.

It is for this reason that we will not appeal the eight-game suspension of Luis Suarez.
Kudos to the FA for showing that non-governmental organizations can meet high standards of transparency, due process and credibility, all of which further the legitimacy of the organization's governance role.

Monday, January 2, 2012

Mid-Season EPL Prediction Contest Update

Before the season started I invited readers to participate in a season-long English Premier League prediction contest. We are now at the mid-season break, which provides a convenient time to evaluate where things stand.

Before getting to the results, let me explain the methodology used to evaluate the predictions. I identified the final standings at the end of the 2010-2011 season as the baseline evaluation of skill. Skill refers to the ability to out-perform a naive baseline. The choice of naive baseline is arbitrary. Specifically, for each place in the table, I take the difference between that place and a predicted place and square it. So if you predicted Man City in 4th and they are in 1st, then the difference is 3, and squared is 9. I then add up the squared differences for all 18 places, and then take the square root of that sum. That gives a measure of the total error in the prediction.

Here are the results at mid-season:

keeperusa 17.0
Arthur 17.3
n-g 17.5
Max 19.0
Roger 19.4
f.a.e 19.5
Elijah 20.1
itzik 20.5
SKILL 20.6
Unknown 22.0
CNY Roger 24.2

You'll note that the standings are tightly packed and that the threshold for skill appears more generous than the Bundesliga contest, which makes sense. n-g won the contest last year and is putting in a good showing at mid-season, but keeperusa and Arthur leading the way.

Right now Bolton, Norwich and Blackburn account for the greatest errors in the predictions. Stay tuned!