Thursday, May 31, 2012

A Round-Up of Sport Corruption News

The amount of news these days on various issues of corruption in sports is pretty remarkable. Here are a few notable items that have recently caught my attention (far from exhaustive):

Wednesday, May 30, 2012

Alex Phillips on a "Good Governance Code" for European Team Sport Federations

Alex Phillips has written an excellent thesis as part of earning an Executive Master in European Sport Governance. It is titled, "What Should be in a 'Good Governance Code' for European Team Sport Federations?" and I am posting it here in PDF with his permission.

Phillips asked me to be clear that the thesis is purely his personal work.

Here is the overview:
This thesis is based around a simple concept, namely to answer the following question: “What should be in a ‘Good Governance Code’ for European Team Sport Federations?” A company listed on a stock exchange receives a “Good Governance Code” (or similar) from the stock exchange which explains the governance criteria that the company must comply with. Similar codes or, at least, good practice guides exist for NGOs, public bodies and other types of organisations. At the moment, however, the six members of the Association of European Team Sports (“ETS”) do not have any such code/criteria applicable to their specific type of organisation and activities. This does not necessarily mean that there is bad governance, but rather that the issue has never been addressed in a systematic, strategic way. There is, however, increasing evidence that supports the need for such a Good Governance Code (or similar).

The methodology of this thesis comprised three parts: firstly, an exhaustive literature review of both generic and sports-specific governance literature; secondly, a series of semi-structured interviews with a high-level, representative sample of sports organisations and stakeholders; and, thirdly, analysis and synopsis of the information gathered to reach conclusions. The areas examined as part of the interviews comprised an open evaluation of what constitutes good governance, followed by 16 general areas comprising 52 specific questions. The general conclusions can be summarised as follows. The creation of a “Good Governance Code” for ETS Federations is necessary and should, as a minimum, address the following eight areas:
• Organisational Structures, in particular regarding: the assurance of democratic structures and processes; the balance of powers between the different organs; the specific roles of the members, president, board, administration, committees and judicial bodies; and the involvement of stakeholders and minority views.
• Transparency, in particular regarding the communication of the organisational mission/vision/objectives/strategy, processes, key decisions and financial information.
• Accountability, with a focus on creating effective mechanisms of accountability, bearing in mind the difficulty of measuring success in sports organisations (compared to a company, for example, where shareholder value can be relatively easily measured).
• Ethical behaviour, in order to implement and maintain, and be seen to be maintaining, high ethical standards at all levels of sport.
• Commercial rights, in order to introduce best practice from outside sport regarding the awarding of commercial contracts, for example by adapting public procurement legislation.
• Selection of hosts for major events, ensuring that ETS members can illustrate that these increasingly important events are chosen in as transparent, rigorous and accountable a way as possible.
• Solidarity, which, although a “political” (rather than “corporate”) governance principle, is core to the activities of sports organisations i.e. not just running competitions but also directly developing sport. Here, corporate comparisons are less useful than those with standards set by NGOs (for example, regarding minimum proportions/amounts of development revenues/funding, controls and transparency over such distributions, etc.).
• Autonomy and relations with the political world, to define and establish best practice for relations with the political world where, in future, much work may need to be done by way of co-operation.

Based on these general conclusions, the main recommendation of this thesis is that the ETS should launch a process to further research, draft, agree and then implement a “Good Governance Code” (or similar). The research and conclusions of this thesis could potentially contribute to such a process. If successfully implemented, such a code would bring many benefits for both the organisations themselves and for their respective sports.

Saturday, May 26, 2012

FIFA Governance Reform Report Card

Now that the FIFA Congress is over, we are in a position to evaluate FIFA's efforts at reforming its governance.  Mark Pieth, the head of the FIFA Independent Governance Committee, spoke to the Congress and urged FIFA not to "cherry pick" reforms.  Sepp Blatter responded as follows, according to Bloomberg:
“We cannot take all the package now: this is impossible,” Blatter said meeting, adding members would need to discuss changes first. “Even if Professor Pieth says we shall cherry pick, we cannot take the whole tree. It’s impossible to take the tree and have all the cherries down.”
With that expectation setting, below I take a look at the recommendations offered by Pieth in the scoping paper that he prepared in September last year, before being installed at the IGC chair (here in PDF).  The call-out boxes have the text of Pieth's recommendations, which is then followed by my assignment of a grade and explanation.
1. Recommendations in Analogy to the Corporate World

1.1 FIFA could further upgrade its existing financial governance, in particular by: a) developing a catalogue of potentially critical payments, and by deciding whether direct controls are warranted or whether indirect controls could be sufficient; b) intensifying its specific anti-corruption controls within existing COSO.
GRADE: Incomplete -- FIFA has apparently taken none of these steps.
1.2. FIFA should upgrade its compliance system to meet the requirements of a state of the art corporate anti-corruption compliance programme (including a review of the Code of Ethics, the risk analysis, the detailed rules on contributions etc. and the hiring of third parties, education and training as well as notification channels). Particular emphasis needs to be placed on the credible implementation of the programme. Member Associations and Confederations should be encouraged to adopt comparable standards.
GRADE: F --  FIFA is far from a "state of the art corporate anti-corruption compliance programme."  This is an F not an Incomplete because FIFA has recognized the need for such steps. The revelations this past week from CONCACAF underscore this need.
1.3. On an organisational level, a) FIFA should consider electing independent members into the ExCo.
GRADE: F -- this recommendation is posed as "should consider" which is rather weak. Nontheless, there is little evidence for such consideration.
b) The competences of the Financial Committee and the Audit Committee should be clearly distinguished. The Audit Committee, in order to act as a genuine internal control body, needs to be sufficiently independent from the administration (the agenda should be set by the Chair, the Committee should have access to external resources under its own authority, if need be).
GRADE: F -- There is no evidence that the FIFA Audit Committee has the capability to act as a "genuine internal control committee" and there is not independence.
c) Likewise, the Ethics Committee and the Disciplinary Committee should obtain clearly distinct tasks. This will require a reform of the underlying Codes (Ethics Code and Disciplinary Code). The Ethics Committee needs to be transformed into an independent body with a mix of external and internal members and the power to initiate investigations based on its own assessment.
GRADE: D -- This is the recommendation that FIFA has focused on throughout.  I suppose this is the cherry that Blatter picked. The functions have been split, however the degree of independence is minimal, which severely undercuts the proposed reform.
d) A Compensation and Benefits Committee should decide over benefits of officials of FIFA bodies and senior staff.
GRADE: F-- This also appears to have been rejected outright by FIFA.
2. Recommendations Derived from FIFA’s Public Role 2.1. Elections into FIFA’s Bodies a) Presidential Election< Candidates should announce their wish to stand sufficiently ahead of the election.
GRADE: Incomplete -- It is not clear if FIFA has considered this recommendation.
FIFA should examine a system of campaign financing which provides officially announced candidates with sufficient backing (a certain number of Member Associations) with FIFA funding, ruling out further private campaign contributions.
GRADE: Incomplete -- it is not clear if FIFA has considered this recommendation.
b) Term of Office FIFA should consider limiting terms of office of its officials.
GRADE: F -- It appears that FIFA has considered and rejected this recommendation.
c) Due Diligence on Members of FIFA Bodies< FIFA should consider introducing regular due diligence checks by the Ethics Committee on elected Members of its bodies. A regulation should specify cases of incompatibility with the FIFA function. The regulation should also define the procedure, and clarify under which circumstances an official would be temporarily suspended from his function.
GRADE: Incomplete -- this does not appear to have been considered by FIFA, and seems implausible that it would be implemented in any manner under current circumstances.
2.2. Decisions Decisions on hosting and on commercialising would greatly benefit, beyond a review of the actual procedures, of an overall abstract strategy, defined by relevant Committees and ratified by Congress.
GRADE: Incomplete -- This too does not appear to have been considered by FIFA.
3. Recommendations Reflecting FIFA’s Relations to its Members 3.1. Conflict of Interest Regulation An institution of the size and significance of FIFA needs a state of the art conflict of interest regulation, indicating cases of conflict and specifying the procedures (up to a possible recusal). While a conflict of interest regulation is a general requirement, it will be particularly useful to prevent abuses and adverse publicity in FIFA’s relations to Members.
GRADE: F -- This has been oft-commented upon here (such as) and even the IGC fell well short of the standards set by Pieth.
3.2. Development Funding Additional preventive measures ensuring transparency and accountability in its relations with Members should be taken in the area of financial contributions for the development of football in countries and regions. An overall strategy should be adopted for the multitude of historically grown funds. They should be governed in a comparable manner, and expenditure as well as uses audited on the standard of the Goal Programme and FAP.
GRADE: F -- As learned this past week, FIFA has a long way to go.

Overall -- The cherry picked by FIFA does not make a very satisfying meal.

Friday, May 25, 2012

Stunning Revelations from CONCACAF

Reuters reports some remarkable details about the scale of corruption in CONCACAF,  Confederation of North, Central American and Caribbean Association Football. Here is an excerpt:
Jack Warner and Chuck Blazer, the former president and general secretary of the CONCACAF confederation, were guilty of financial mismanagement on a grand scale during their years in office, delegates were told at their congress on Wednesday.

New CONCACAF president Jeffrey Webb said he was "shell-shocked, dismayed and mad" as the organisation's auditor John Collins unveiled details of the alleged mismanagement to members from the 40 countries of North and Central America and the Caribbean, which make up the confederation.

Collins told delegates that after investigating CONCACAF's finances for the last five months, he could state that under Blazer it failed to declare revenue to the United States Internal Revenue Service for years. Warner registered a $22.5 million FIFA-funded soccer centre in Trinidad to his own name. While Warner left FIFA in disgrace last year, Blazer is still CONCACAF's representative on FIFA's executive committee . . .
Blazer, who heaed up the ostensibly non-profit CONCACAF, took in a hefty salary:
In a statement issued to the media, Blazer said no tax returns had been declared in the United States because CONCACAF was a non-profit organisation, and no profits had been made in the U.S. . .

Blazer said he was "not yet in litigation" to retrieve the payments he was owed but confirmed his contract had included 10 percent of all CONCACAF's TV and sponsorship deals.

The commissions and salary for Blazer totalled between US$4 million and US$5million last year, the meeting was told.
 In 2011 Andrew Jennings revealed that Blazer's take from the 10% deal amounted to about $10 million over the previous 5 years.

CONCACAF's legal council told the federation,
that Blazer had misrepresented CONCACAF before the U.S. Internal Revenue Service from 2007 until 2011. The body, legally based in the Bahamas, keeps an office in the Trump Tower in New York it pays $1 million in annual rent to hold. Collins said “it is difficult to predict” what CONCACAF’s exposure will be as a result.

The IRS is investigating CONCACAF, Collins said, according to the Bloomberg report. CONCACAF makes most of its money in the U.S., and would therefore have to file a Form 990 as a non-profit organization. A representative from the IRS didn’t immediately respond to an email requesting comment.

Collins said no tax filings have ever been made in the U.S., according to the Bloomberg report.
Apparently, FIFA will not consider CONCACAF's request to remove Blazer from its Executive Committee due to a technicality in its procedures

The latest relevations from CONCACAF and FIFA's apparent (non)response are yet another black eye for football governance. However, no matter what FIFA chooses to do, it is likely that the US IRS will not be very forgiving, stay tuned.

Tuesday, May 22, 2012

Quote of the Day

Sepp Blatter today on the FIFA Independent Governance Committee (from which he has just selected a member to join the FIFA Executive Committee, further redefining "independent"):
[T]his independent group is not making my life difficult.

FIFA's New Reformer?

FIFA's Executive Committee has ratified the proposed changes to the organization's governance proposed by its Independent Governance Committee.  These include the proposed appointment of Domenic Scala as the independent chairman of the Audit and Compliance Committee, which (in principle)  is to serve as the locus of FIFA's reformed approach to governance.

Regarding the governance reform road map, the Executive Committee took another major step with the appointment of Mr Domenico Scala (Italy/Switzerland) as the independent chairman of the Audit and Compliance Committee (link to biography: [see PDF]). Mr Scala had been proposed by the Independent Governance Committee (IGC). This appointment will be submitted to the Congress for ratification.

Moreover, the Executive Committee confirmed the proposed change to the FIFA Statutes involving the restructuring of the Ethics Committee with a new system of two chambers with two independent chairmen. The FIFA Executive Committee noted that one candidate proposed by the IGC had to decline the position of chairman of the adjudicatory chamber just yesterday for health reasons.

In view of this, the Executive Committee decided to hold an extraordinary meeting to designate both chairmen together once the FIFA Congress has approved the relevant amendments to the FIFA Statutes, which will come into force 60 days after the Congress. At this extraordinary meeting, which is to take place in Zurich in the first week of July, the FIFA Executive Committee will adopt the Code of Ethics and appoint both chairmen so that the new Ethics Committee can start work thereafter.
The next step is consideration of the changes approved by the Executive Committee by the full FIFA Congress. Scala (pictured above) will likely inherit from Mark Pieth the mantle and the spotlight associated with FIFA reform.  What difference his appointment will make will be subject to some discussion.

Scala had the bad luck of being appointed CEO of Nobel Biocare Holding on the eve of the global financial crisis, and lasted four years in that position.  More details on Scala's background can be found here in PDF.

Monday, May 21, 2012

Doping and Horse Racing

Horse racing season in the United States this year brings with it a unique case of doping involving the horse I'll Have Another, winner of the Kentucky Derby and the Preakness, leaving only the Belmont to cap the Triple Crown.  

The current controversy involves a practice called "milkshaking" described by the Guardian as follows:
The problem with I'll Have Another, though, is his trainer. Doug O'Neill runs a very successful operation on the west coast but, when it comes to violations of US racing's rules on medication, O'Neill's rap sheet – as the New York Times pointed out shortly after the Derby – is long and inglorious. It includes more than a dozen breaches of the rules in four different states while he also faces suspension of his licence for up to six months after one of his horses, Argenta, showed a raised level of TCO2 – the mark of a "milkshake".

"Milkshaking" means forcing a bicarbonate solution into a horse's stomach via a tube inserted into its nose, a procedure which is as crude and unpleasant as it sounds. The theory is that the alkaline solution counteracts the effects of lactic acid building up in a horse's system when it exercises and thus delays fatigue. The practice is generally accepted to have been rife in US racing until quite recently, on the west coast in particular.

O'Neill says – indeed, he swears on his "children's eyes" – that he has never milkshaked a horse and claims to be funding research into the possibility that legal raceday drugs, such as the anti-bleeding agent furosemide, might have caused the positive test. He is still fighting the Argenta case, nearly two years after the positive test.
Illegal for horses, but perhaps OK for racers in the Tour de France?

Sunday, May 20, 2012

Economics and Championships

Writing at his Forbes blog Stefan Syzmanski notes that the big game yesterday was not the Champions League final, but the promotion playoff between West Ham and Blackpool:
In one of these games the difference between winning and losing is €70 million, in the other it is €3 million. Amazingly, it’s the Premier League playoff game which involves the big bucks. UEFA pay €9 million to the winner and €5.6 to the loser of the Champions League Final (although you could argue that the winner will cash in via merchandising and an enhanced international reputation).

The winner of the Premier League playoff will get a minimum share of next year’s broadcast income worth about £40 million, and even if relegated immediately, receives parachute payments worth £48 million over four seasons. Since both West Ham and Blackpool are already entitled to another £32 million of parachute payments after being relegated last season, the net gain for each is £56 million, which is about €70 million at today’s exchange rates.
With respect to that other big game, Olaf Storbeck, economics correspondent for Handelsblatt, had predicted a Bayern victory based on a commonly used metric of skill oft discussed on this blog -- the simple economics of football squads:
[B]ased on my professional background I’m rather confident that Bayern Munich will beat Chelsea this weekend.

This forecast is not based on the fact that Bayern will play on its home turf. It is rationally derived from purely economic arguments: Judged by the current market value of the individual playes, Bayern will have the stronger and more powerful squad on the ground.

On Friday, the German football magazine “kicker” published the most probable formations of Bayern and Chelsea. Judged by the current market value of the player – estimated by the football website Transfermarkt – the German XI will be about 30 percent stronger than the English one.

The Bayern XI will be worth 290.5 million Euro while Chelsea’s players are just worth 202.5 million Euro. Even if the ageing forward Didier Drogba would be replaced by the expensive (and mostly useless) Fernando Torres, Chelsea’s value would only climb to 235 million Euro.
Well, that prediction did not verify. Even though transfer market value of squads presents a high bar of skill to overcome in prediction (see, e.g., this paper in PDF), it obviously does not explain everything.  Otherwise, we wouldn't pay much attention to sport.

In an evaluation of his prediction Storbeck explains that economics, by contrast, does have a post hoc explanation for every possible outcome:
However, the beauty of economics is its versatility. The dismal science not only explains why Bayern should have won yesterday. At the same time, the discipline is also able to point out why the team actually lost.

Potentially, the Germans faltered in the penalty shoot-out because they were playing on their home ground. This at least suggests an analysis by Thomas Dohmen, a German economist at the Univesity of Maastricht in the Netherlands.

In 2005, Dohmen analysed the performance of professional football with regards to penalties. He came to the conclusion that players of the home team have a significantly higher failure rate.

In his paper entitled “Do Professionals Choke under Pressure?”, Dohmen analysed all 3610 penalties that were awarded between 1963 and 2003 in the German Bundesliga.

The descriptive statistics of Dohmen’s data show how egregiously Bayern Munich failed yesterday. The German XI squandered 3 of their 6 penalties (this includes 5 in the shoot-out and one in the extra time). This failure rate of 50 % is twice as large as it is usually the case. As a rule, only about 26 percent of all penalty kickers do not score (19 percent of the kicks are saved by the goal keeper, 7 percent miss the target completely).

However, home teams have a worse track record than away teams: “Players are more likely to choke on a penalty kick when the action takes place at the home turf”, writes Dohmen.
The manner in which sport resolves uncertainties of the real world appears to be far more appealing than the approach taken in academic research.

Wednesday, May 16, 2012

Are European Football Clubs Best Considered as Quasi-Public Entities?

The Economist has a discussion of finances in football in which it highlights the superior performance of the German Bundesliga:
Football matches pitting English against German teams are inevitably depicted as a clash between Anglo-Saxon resolve and Teutonic efficiency. But the contrast between England’s Chelsea and Germany’s Bayern Munich (pictured), set to meet on May 19th in the Champions League final, is stronger off the pitch than on it. Bankrolled by Roman Abramovich, a Russian billionaire, Chelsea has spent millions in its determination to win Europe’s most prestigious club competition, racking up losses of nearly £68m ($108m) last financial year. By comparison, Bayern Munich, which made a profit of €1.3m ($1.65m) over the same period, is a model of prudence.
The figure at the top of this post comes from a 2010 analysis by AT Kearney (here in PDF) cited in the Economist article which argues that if normal business standards were applied to European football leagues, the English and Spanish leagues would be at risk of going out of business in 2 years.

Of course, as Simon Kuper frequently reminds us, football is far from a normal business:
If football clubs really did collapse beneath their debts, there would now be almost no football clubs left. “We must be sustainable,” clubs say nowadays, parroting the latest business cliché. In fact they are fantastically sustainable. They survive even when they go bust. You can’t get more sustainable than that.
The Swiss Ramble recently took a detailed look at the finances of Bayern Munich, which has an impressive run of 19 consecutive years of profitability, a streak sure to continue this year. But as The Economist notes, it is not just economic success at the top, but throughout the league where the Bundesliga shines.

One aspect of this success is tight regulation by and subsidy from government:
Thanks to the €1.4 billion investment German authorities made in expanding stadiums for the 2006 World Cup, Bundesliga clubs have been able to increase their matchday revenues. In England, where big clubs own their own facilities, there is no comparable public-sector assistance. The decentralisation of the German economy has also helped clubs throughout the country to form commercial partnerships. With a shortage of strong businesses outside Paris, Madrid and Barcelona, most clubs in France and Spain have limited local-sponsorship opportunities.

Not everyone is keen on cost controls, either. Leagues in both Germany and France demand oversight of financial accounts to make sure clubs are not being reckless. Authorities can prohibit transfer activity or relegate teams as punishment for breaching regulation. Mr Hembert says the system in both leagues is more stringent than the financial fair play rules proposed by FIFA, football’s governing body, designed to curb spending by clubs competing in European competitions from next year. Yet FIFA’s scheme would run into serious opposition in the Premiership, where there is less appetite for regulation, despite Portsmouth’s bankruptcy. Even in the Bundesliga, there is resistance to the rule that prevents one person from owning more than 49% of a club. That restriction is intended as a safeguard against ruinous megalomaniacs, but Hannover 96, a Bundesliga side, believes it curtails investment and stops the league from realising its full potential.
Should football clubs be thought of less as businesses and more as quasi-public entities?  The continuing success and growth of the Bundesliga suggests that the answer is yes.

Monday, May 14, 2012

Sport and Policy Evaluation: Case of Arsenal

One of the valuable aspects of sport to the social scientist is that it provides a convenient laboratory for all sorts of investigations. Here I'll use the just concluded EPL season and Arsenal's campaign within it to illustrate some of the challenges of policy evaluation in any context. In the end, a good evaluation depends upon a good methodology.

To review, the start of the season started off miserably for Arsenal -- In August they took only 1 of a possible 9 points and saw their two biggest stars Samir Nasri and Cesc Fabregas depart for Manchester City and Barcelona (the former got a league title, the later did not). Following an 8-2 thrashing by Manchester United, the worst was expected for the upcoming season. Your humble blog host even predicted a 6th place finish for the squad.

It turns out that Arsenal finished 3rd, and received an automatic Champions League qualification spot.

So was the season an improvement over the previous season?
One way to answer this question would be to compare relevant data, the 2012 squad earned more points (70) than the 2011 version (68). But you might protest, the 2012 squad finished a distant 19 points off of the champions, whereas the 2011 squad was only 12 points off the pace. A more sophisticated rejoinder would explain that the 2012 squad took 6.7% of all points earned in the EPL during 2011-2012 (70/1047) whereas the 2011 squad earned only 6.6% of total points earned (68/1029). Further the 2012 squad earned 7.3% of all victories in the recent campaign, whereas last year's squad earned on 7.0%.

Ah yes, but you might reply, the 2011 squad was only 4 victories off of the pace set by Manchester United, whereas the 2012 doubled that deficit against Manchester City. The 2011 squad allowed 6 less goals (43 vs. 49) but the 2012 squad scored 2 more (74 vs. 72).

This sort of game can go on for a long time (especially at a pub) with no resolution, as there are multiple measures of "good outcomes" according to different criteria.

In any evaluation, it is important to be clear -- preferably up front -- about goals to be realized and how they are measured. Goals can of course change. Every team starts out, in principle at least, with a goal to win the league, but through the season as that goal becomes unreachable (for some in the last4 minutes of added extra time, but I digress), the focus shifts to other goals, such as gaining a Champion's League spot or avoiding relegation as the case may be. This sets up the situation where there may be multiple valid metrics of evaluation, conditional on evolving experience. all evaluations are conditional and value laden. Sometimes we'll agree on what those conditions and values are and sometimes we won't. Reaching such agreement is much easier if there are some expectations set before experience occurs. This is why legislation and policy proposals are often used as the basis for conducting a policy evaluation, as such events mark a stabilization (even if only temporary) on expectations to be realized in practice.

So after all that on policy evaluation, did Arsenal have a better season in 2011/2012 than in 2010/2011?

The answer is an unequivocal yes.

Arsenal finished closer to the EPL title in 2012 and secured a guaranteed Champions League spot, both improvements over 2011. At the start of the season, each of these objectives would surely have been at the top of anyone's list of objectives for a top EPL squad, and will surely top Arsenal's list for next season.

So beware fancy statistics and moving goal posts. Evaluation starts with objectives, not data.

EPL Prediction Contest Results

Well that was an exciting Sunday, wasn't it?

The results are in for the Least Thing EPL prediction contest and there are congratulations to share.

1. To n-g for a second title in a row, eking out the slenderest of victories over Max (who would have had <14 with an accurate Chelsea prediction;-).
2. To Max for winning the collective EPL and Bundesliga title, very nice.
3. To keeperusa, who wins a copy of The Climate Fix (as the other two already have copies), please email me to arrange.

Collectively, the competitors did best on ManU and worst on Swansea (most were 9 places off, accoiunting for almost 40% the total prediction errors in the entire pool. A more accurate Swansea pick alone would have been enough to move anyone into first place in the competition.

Most everyone demonstrated skill over the naive metric, I'll have to devise a more rigorous test in the future.

Here is the final table:

n-g 17.4
Max 17.7
keeperusa 19.6
Arthur 19.7
Elijah 19.9
f.a.e 21.8
itzik 22.5
Roger 22.6
SKILL 22.8
CNY Roger 25.2
Unknown 25.9

Readership is up by about a factor of 10 since this contest started, so I hope we'll have a larger pool of entries in a few months for 2012/2013. Meantime, stay tuned for possible prediction competitions for Euro 2012 and the Olympics.

Thanks to all for participating!

Thursday, May 10, 2012

The Tragedy of Mario Goijman, Part II

Part I of this essay related how Mario Goijman, the former president of the Argentinean Volleyball Federation, found himself being evicted from his home as a consequence of an unaccountable international sport association. Part II picks up the story and its broader implications...  

Goijman’s personal experiences illustrate what can be the seamy underside of the governance of international sports organizations. More than 60 such organizations are incorporated in Switzerland where they largely enjoy freedom from oversight and lax financial requirements. Among these bodies, it has been FIFA -- which oversees international soccer and its wildly successful World Cup -- that has faced the most visible issues with corruption, with a prominent (and largely panned) report issued by a FIFA reform committee last week.

At the Play the Game conference last fall award-winning British investigative journalist Andrew Jennings suggested that the mafia is an apt comparison to how FIFA operates, a comparison which a FIFA spokesman at the conference rejected, asserting that the mafia “kills people.”

Other federations have faced similar allegations. Last month Mario Vazquez Raña, a long-time member of the International Olympic Committee and president of the Association of National Olympic Committees, resigned in dramatic fashion, citing “shady alliances and questionable procedures.”

Corruption in sports governance is bad enough in the context of sport, but has potentially far greater consequences than simply on the games themselves. Unfortunately, allegations of the consequences of poor sports governance are not simply financial, and can take a human toll.

For instance, human rights attorney and former Olympic swimmer for Canada, Nikki Dryden, has complained that following the 2010 drowning death of Fran Crippen, an American open-water swimmer, at an event in the United Arab Emirates that the international swimming federation “refused to participate with the USA Swimming Task Force to help with a thorough, transparent investigation” despite what may have been excessively warm waters and a possible shortage of lifeguards.

In another case with even broader consequences, in February Jack Warner, the Trinidad and Tobago government official who was recently expelled from the FIFA Executive Committee for ethical violations, stood accused of mismanaging funds that had been raised to aid those suffering in the aftermath of the 2010 Haiti earthquake. According to the Sunday Times in London, Warner collected $750,000 from FIFA and its vice-president Moon Jung-Chung (who is also part of the South Korean Hyundai family). The President of the Natian football association Yves Jean-Bart says that only $60,000 reached Haiti. Warner has not yet accounted for the remaining funds.

The United States and Europe are familiar with oversight of governmental and non-governmental bodies to root out and clean up corruption. Yet, such practices are far from universal. In a recent report the Council of Europe noted that only 10 countries around the world have laws against bribery in sports, and noted that even within Europe a complex tapestry of laws and enforcement makes dealing with corruption a challenge.

In the late 1990s, when it was revealed that US Olympic organizers had given bribes to IOC members in order to secure the 2002 Winter Games for Salt Lake City, the US media, Department of Justice and Congress all went to work. Following a congressional investigation led by Senator George Mitchell, Representative Henry Waxman introduced a bill which would have prevented American companies from financially supporting the IOC until it had implemented their recommended reforms. The bill never became law but the threat was enough to motivate the IOC to begin a process of reform. Yet, once the hot glare of the US media and policy makers turned away from the IOC, reform stalled.

When the police showed up at his house last month he put a gun to his head to attempt suicide and had to be hospitalized. Andersen at Play the Game (pictured below) has asked the FIVB to enter into a process of arbitration to resolve the outstanding dispute over the 2002 loans still held in Goijman’s name, explaining that “By showing generosity and willingness to open a dialogue with the [Argentinean Volleyball Federation] and Goijman the FIVB will send an important welcoming signal to those future leaders inside and outside volleyball who wish to preserve the integrity of sport and its institutions.” Andersen tells me that Goijman has now been evicted from his home, and now lives in a small rented house.
Beal at USA Volleyball made his position clear when we spoke. He said that the $800,000 owed by Goijman “may sound like a lot” but is “not too much to the FIVB.” Andersen is leading an EU-funded project that is seeking to document the financial accounts of international sport associations. With respect to volleyball he says that "The FIVB does not publish its annual accounts but is widely believed to be among the most wealthy sports federations."

Beal cited the well-run and quite successful 2002 Men’s World Championships that Goijman pulled off in a difficult financial period for Argentina and its federation when he concluded, “My very strong opinion is that the FIVB should just pay this disputed amount, or some negotiated amount. It would clearly get rid of this stigma on our sport and send a positive message about supporting our world events and our long-time partners and do the right thing.”

The tragedy of Mario Goijman is yet another example of how, for far too long, international sporting organizations have been controlled by small groups of unaccountable men who operate from secretive organizations in Switzerland. It is time for the United States and Europe to take a far more proactive role in ensuring that the sense of fair play that is expected in the games that we play is also standard practice in how the games are governed.

Wednesday, May 9, 2012

Should College Football be Banned?

Ban College Football from Intelligence Squared U.S. Debates on

As summarized by the NYT:
Two prominent writers debated the idea of banning college football on Tuesday night at New York University’s Skirball Center against two journalists, who also happened to be former players. Buzz Bissinger (the author of the high school football book “Friday Night Lights”) and Malcolm Gladwell (the best-selling author and New Yorker staff writer who compared football to dogfighting) want to get rid of football on campus. Tim Green (a former N.F.L. defensive end) and Jason Whitlock (a Fox Sports correspondent who played football in college) want it to stay.
Too bad they didn't debate something a bit more practical, like, given that college football is here to stay, how can we make it better?

Tuesday, May 8, 2012

The Tragedy of Mario Goijman, Part I

Late on a Friday evening in March, 2012 outside of Buenos Aires, Argentinean police and government officials arrived at the home of Mario Goijman (pictured below right) with orders to evict him and confiscate his belongings. From 1996 to 2002 Goijman was the President of the Argentinean Volleyball Federation, which hosted the 2002 Men’s World Championships. Once a successful businessman, today he is a broken and ill man, a victim of the inability of international sporting associations to deal with corruption within their ranks.

The officials had shown up on Goijman’s doorstep that evening because of a dispute that had started a decade ago which left Goijman responsible for bank loans he had personally taken on as part of hosting the 2002 championships. The story of that dispute and its tragic consequences for one man provides a window into what is often a dark and corrupt world of international sports governance.

Goijman’s battle against the international body that oversees volleyball competitions, the FIVB (International Volleyball Federation) began in 2002, shortly before the Men’s World Championships.

Based on information that he had gleaned as an insider, Goijman decided to blow the whistle on the FIVB and went public with allegations that the books of the federation contained financial irregularities. Goijman alleged that corruption stemmed from the top of the Federation and its president, Rubén Acosta (pictured below left).

For his part, Acosta, who had headed up the FIVB since 1984 and who was also a member of the prestigious International Olympic Committee (IOC), denied the allegations and in turn accused Goijman of committing his own financial irregularities (allegations that have ever been substantiated). Acosta immediately suspended Goijman from the FIVB and then later, he suspended the entire Argentinean Volleyball Federation after it came to the support of Goijman. A new volleyball federation was subsequently established in Argentina by supporters of Acosta.

For anyone paying attention, which was certainly very few outside of the small volleyball community, it was dueling accusations with little basis for judging what may have been true and what may have been false. The dispute could have disappeared as a historical footnote.

However, it turned out that some were paying attention to the dispute. In 2003 Swiss authorities raided the headquarters of the FIVB in Lausanne, and turned up documents that supported Goijman’s allegations. At the same time in 2003, the ethics committee of the IOC investigated Acosta, which resulted in a recommendation of sanctions, prompting his subsequent resignation from the IOC, at which point the investigation was discontinued.

A Swiss court later judged that FIVB accounts had in fact been falsified, but did not determine that the falsification had resulted from criminal intent. Jen Sejer Andersen, who heads Play the Game, a Danish non-profit focused on sports governance which has taken up Goijman’s cause, holds leaked internal FIVB documents indicating that Acosta skimmed away more than $33 million from the organization’s accounts.

Yet, none of these events or revelations has led to the resolution of Goijman’s predicament. A decade later he continues to suffer the consequences of the retribution from Acosta and the FIVB for his speaking out.

I first encountered Goijman last October in Germany at the biennial Play the Game conference (Goijman is pictured to the right, speaking at PTG 2011). Goijman, a grandfatherly figure, spoke passionately and emotionally about his experiences and troubles, and even then it was clear that the events had taken an enormous toll on him emotionally, if not physically.

I was at the conference to present a paper on the governance of FIFA, the international body that oversees world football (soccer), which has its own suite of issues associated with corruption to deal with. Having never heard of Goijman or Acosta, I decided to dig a little deeper.

As the head of the Argentinean volleyball federation, Goijman was the lead individual responsible for organizing the 2002 Men’s World Championships, and (strangely) part of this responsibility involved contributing his own savings and taking out substantial bank loans to finance the games.

Goijman told me by email that he contributed his personal funds due to the sorry state of the Argentinean economy at the time and besides, he was not worried about the loans, as the games were expected to generate a 30% return. He proceeded under the expectation that the borrowed money would subsequently be repaid by the contracted partnership with the FIVB.

One might question the wisdom of blowing the whistle on an organization immediately after loaning them a substantial sum of money, because the results were probably predictable. As the dispute took place the FIVB refused to reimburse the Argentinean Volleyball Federation for the loans that they had taken, leaving Goijman personally responsible for the debt. Today the FIVB continues to we owe the (previous) Argentinean federation about $800,000.

After Goijman blew the whistle on Acosta, the FIVB also engaged in a war against the Argentinean Volleyball Federation and anyone who offered him support. Despite being able to reconcile a number of issues related to the dispute over the years, Goijman’s inability to repay the loans taken in his name are what ultimately led to the police on his doorstep to repossess his home and the last of his belongings.

My repeated inquiries to the FIVB press office in Switzerland and FeVA (the current Argentinean Volleyball Federation, and the one which replaced the one headed up by Goijman) received no response. (The FIVB Board is pictured above.)

But I was able to speak to Doug Beal, who is the CEO of the US Volleyball Federation and was also the head coach of the US volleyball team at the 2002 Men’s World Championships in Argentina. Beal is currently on the Board of Administration of the FIVB.

Beal (pictured below right) told me that during the time that the FIVB was run by Acosta the organization was essentially a “one-person dictatorship.”

“Nobody asked too many questions because he was bringing in a lot of money and significantly raising the profile of the sport, particularly in the Olympics and particularly with the addition of the beach discipline in ’96,” Beal said. “Acosta was certainly receiving significant commissions for some time before it was an approved or well-known practice, and the total amount may likely never be known.”

Of the dispute between Goijman and Acosta, Beal said that he has met Goijman on several occasions but does not know him well, but is “aware of no evidence of what Acosta accused him of” back in 2002, at least none “that I have personally seen.”

“Goijman didn’t react as most people did [to Acosta] by bending to his every whim and will,” Beal explained. So “Acosta decided to dismiss him from the volleyball world.” Beal told me that the practice of having individuals take personal responsibility for loans to finance a championship is not something that USA Volleyball would ever allow to happen or agree to do.

Beal’s recounting of the events and disputes matches up well with the evidence collected by Andersen at Play the Game and that which is publicly available. By all accounts, Goijman seems to have gotten a raw deal -- and that is putting it mildly.

To be continued ... Part II tomorrow on the broader lessons of this sad story and Beal's recommendation for resolving the Goijman situation ...

Monday, May 7, 2012

Top Spectator Attendance in Professional Leagues

Courtesy Sporting Intelligence.

Of course, US college football ranks up near the top (let's call that "semi-professional"):

Sunday, May 6, 2012

Bundesliga Prediction Contest Final Results

The Bundesliga season is in the books. The results of the Least Thing prediction contest are also in the books. All contestants showed skill over the naive baseline.

Der Spiegel eked out a narrow victor over Max (key picks being Hamburg and Gladbach -- prize awarded in person this week!), with me trailing in third. After the Americans (!) came a Dutch fellow and some Germans.

Here is the final table:

Spiegel 15.6
Max 15.8
Roger 18.4
rjtklein 20.0
Reiner 20.9
ob 23.4
Werner 25.3
SKILL 26.6

Let's get a few more participants next season.

Friday, May 4, 2012

Sport and Politics, Argentina Pokes at the UK

What was that I was just saying about sport and politics being inseparable?

Check out the video above from the Argentinean government. See also CNN.

Me in the FT on Sport Governance

I have a piece on sports governance  in today's Financial Times in a special feature on the Business of Sport 2012. Here is an excerpt:
In March, the Council of Europe became the latest body to raise concerns about nefarious activities overshadowing the world of sport.

In a stark warning, the intergovernmental body said that “doping, corruption and match fixing [are] growing insidiously”, adding that “other problems are also undermining the world of sport and tarnishing its image”. In response to such threats to the integrity of competition, the council cited the need to “improve governance machinery within sports institutions”.

A list in support of the council’s claims gives little regard to sport or geography. In the US, American football coaches have been accused of paying “bounties” to reward players for injuring opponents, Formula One motor racing’s dirty laundry has been held up to public view in a German court in a trial over alleged bribery, the Turkish football league has been embroiled in a match-fixing scandal, baseball and cycling continue to be dogged by accusations of drug-enhanced athletes, while a formal review of cricket’s international governing body found its “management and ethics” not to be “worthy of the sport”. And so it goes on.

The most highly charged accusations, however, are against football, where Fifa, the international governing body, has faced allegations ranging from the buying of votes in a recent leadership election to corruption in the awarding of the 2018 and 2022 World Cups and even the embezzlement of donations intended for Haitian earthquake victims.
Have a look and please feel free to comment.

Thursday, May 3, 2012

Ukraine, Politics and Euro 2012

Today's FT has an editorial on Ukraine, Yulia Tymoshenko and the upcoming UEFA Euro 2012 tournament. The editorial winds up being a bit contradictory and in the process demonstrates the utter futility of trying to keep separate international sports and politics.

The FT explains why there is an issue here:
When Ukraine won the right to co-host this summer’s European football extravaganza, Euro 2012, it was meant to be a joyous affirmation of the country’s post-Soviet, western-facing identity. But the event has become the focus of an international political protest over the imprisonment of Yulia Tymoshenko.

The international community is right to take a stand against Ms Tymoshenko’s treatment. The former prime minister, a bitter foe of Ukraine’s increasingly authoritarian president, Viktor Yanukovich, says she has been beaten by guards on a visit to a medical centre.
The treatment of Tymoshenko has inevitably collided with Ukraine's role in co-hosting the upcoming tournament, which will be widely watched by football fans around the world. A number of observers, including government officials, have called for sanctions against Ukraine involving the tournament. But the FT says that "calls for an international boycott of the competition, or to strip Ukraine of its right to host the tournament, are misguided for several reasons."

These reasons include the ineffectiveness of such boycotts, the opportunity to use the spotlight shown on Ukraine for positive effect and the precedent set by such an action -- what about Russia and Qatar? -- asks the FT, alluding to the 2018 and 2022 World Cups.

But then the FT quickly changes course:
Europe’s politicians would send Mr Yanukovich a powerful signal by staying away from games in Ukraine. His actions are not compatible with European values and push him further from achieving his stated desire of closer links to the EU. A political boycott would also deprive Mr Yanukovich of the chance to use the tournament as proof of his international standing in crucial parliamentary elections this year. Euro 2012 is about sport, not politics.
A "political boycott" is probably not the best vehicle for showing that "Euro 2012 is about sport, not politics."

Of course, the FT is not alone in trying to swim without getting wet. Bayern Munich Uli Hoeness struggled with the issue in an interview in Der Spiegel and UEFA's president Michel Platini has tried to distance himself from the controversy. The head of the Spanish football federation however recommended that the tournament be moved to Spain, demonstrating a slightly different political take on the situation.

Sports and politics are inevitably intertwined, there is no use pretending otherwise. While Euro 2012 is indeed about sport, the politics are never far away.

Tuesday, May 1, 2012

Harmonization of Doping Sanctions: A Victory for Sports Governance

Earlier this week the Court of Arbitration for Sport ruled against the British Olympic Association in a dispute with the World Anti-Doping Agency over sanctions on athletes convicted of doping in sport (CAS press release here in PDF). 

The BOA had implemented a lifetime ban on such athletes.  WADA had deemed such sanctions to be non-compliant with their code, which seeks to making doping policies consistent across the world. WADA explains:
WADA has spent the last decade harmonizing the fight against doping in sport across the world by creating one set of rules in consultation and in accordance with the wishes of all its stakeholders, both sport and government.

In order to achieve this harmonization, the rules have had to be proportionate and respectful of the rights of individuals within the framework of international law. They are not based on emotive arguments or the wishes of any one signatory or individual.
The CAS was careful to point out that its judgment in this case was based on procedural considerations, and not a judgment on the merits of what might constitute an appropriate punishment for doping (from the decision, here in PDF):
[T]he Panel wishes to reiterate its comments in paragraph 8.27 of the USOC Award, which indicate that the Panel’s Award is not an opposition to the sanctions imposed by the IOC Regulation or, in this case, the BOA Bye-Law. Rather, the awards in both cases simply reflect the fact that the international anti-doping movement has recognized the crucial importance of a worldwide harmonized and consistent fight against doping in sport, and it has agreed(in Article 23.2.2 WADA Code) to comply with such a principle, without any substantial deviation in any direction. 
The arbitration panel notes that the BOA continues to have recourse by working within the WADA Code to secure support for the harsher sanctions for doping that it advocates:
[T]he Panel notes that the BOA and the IOC are free, as are others, to persuade other stakeholders that an additional sanction of inability to participate in the Olympic Games may be a proportionate, appropriate sanction of an anti-doping offence and may therefore form part of a revised WADA Code. At the moment, the system in place does not permit what the BOA has done.
Whatever one thinks about doping and what constitutes an appropriate sanction, the CAS decision represents a victory for sports governance overall, and for WADA in particular.