Thursday, June 30, 2011

Friday Funny - FIFA Rankings

FIFA's latest rankings are out and have led to much mirth among observers for the apparent oddity of England being ranked 4th, above Brazil.

Dirty Tackle writes:
In case you were somehow duped into believing that the official FIFA world rankings held any semblance of meaning or value at all, this should clear things up for you. In this totally real and not photoshopped screenshot of the latest FIFA rankings, that's England sitting fourth. Ahead of Brazil.
But The Fiver gets the best line from a contributor:
"England fourth in the world rankings? Yeah, like we needed further evidence of Fifa's incompetence" - John Young.
Before you laugh too hard, remember that FIFA has the US at 24th, so perhaps there is a bit more truth to the rankings after all ;-)

Wednesday, June 29, 2011

The Governmental-ization of Sports Governance

One emerging trend in international sports governance appears to be in the direction of public governance of sport, and away from NGO governance.  Such steps are initial and halting to be sure, and may be limited in their reach, but they are there.  Perhaps the best example in practice is the World Anti-Doping Agency, which combines non-governmental and governmental mechanisms of governance.

An example of a call for further governmental-ization of sports governance comes from a group of the Parliamentary Assembly of the Council of Europe for a new international body to police corruption in sport.  The Council of Europe is a 47-member body separate from the EU, with a focus on governance and culture, but with no ability to legislate.  Its Parliamentary Assembly is comprised of members of parliaments the Council's member states.

Courtesy of Play the Game here is a summary of the call (full text here in PDF and more here from the COE) :
A call for the establishment of an International Agency to protect the integrity of sport supported by 60 MP’s was forwarded last week in Strasbourg at a special hearing on match-fixing and corruption hosted by the Council of Europe. 

At the hearing, organised by PACE’s Committee on Culture, Science and Education, Cecilia Keaveney, President of the Youth and Sports Committee of the Council of Europe, intensified previous calls for action to protect sport by forwarding an International Written Declaration calling for the creation of an International Agency to protect the integrity of sport signed by 60 MP’s from 33 countries.

“Match-fixing is a clear and present danger to European sport. The need to create an international anti-corruption agency to protect sport is not a debating point, it is inevitable”, Keaveney said according to a press release.

While acknowledging an existing goodwill towards battling the threats to sport, Keaveney underlined that co-operation is vital to win the fight:

“The evidence to date indicates that, while many individuals and organisations are talking about the right issues, no-one is capable, on their own of delivering a meaningful solution. There is no time to lose.” 
Will such calls become more common across international sport?  It seems likely. The Council of Europe is expected to propose an international convention on match-fixing later this year.

Transparency International on FIFA Reform

Transparency International explains that the good feelings toward FIFA emanating from Germany this summer, due to the Women's World Cup, don't counter the issues of governance that the organization faces.  Here is a lengthy excerpt:
It is clearly time for FIFA to leave the old ways of doing business – the “old boys network”, “behind closed doors solutions” and keeping problems “in the family” – in the past, and join other organizations in modernizing their governance.

There are already examples of anti-bribery codes in the world of business: take the OECD Recommendations on Good Practice, Internal Controls, Ethics, and Compliance or the Business Principles for Countering Bribery, a TI-led initiative with a wide range of recommended good practice.
  • clear rules on how to deal with allegations of corruption;
  • institution-wide zero tolerance for corruption;
  • an empowered ombudsman;
  • a review of the existing code of ethics including the competences of the ethics committee;
  • compliance clauses for all contracts, for FIFA’s financial support for member federations etc.;
  • review of the tender and awarding procedure of events as well as TV-rights and sponsorship contracts;
  • clear reporting and accounting rules.
Around the same time that FIFA was selecting Russia and Qatar to host the World Cups of 2018 and 2022, UN Secretary-General Ban Ki-moon was calling on business leaders worldwide to denounce corruption and to back their words with strict prohibitions against it, by adopting anti-corruption policies. FIFA should hold itself to the same standard.

Good governance has to start at the top – even all the attempts of FIFA to fight match-fixing will be wasted if the leadership in football all over the world does not adhere to ethical standards thus setting an example of integrity for those who are in danger of being involved in match-fixing, especially players and referees.

Unlike companies, FIFA has no external directors, shareholders, supervisory boards or stakeholder processes applying direct external influence. Pressure for change may therefore need to come from fans, national federations, professional clubs, sponsors, governments, the media and civil society.
I have drafted a paper on holding FIFA accountability that I will share soon.  It turns out that actually holding FIFA accountable is not so easy.

Tuesday, June 28, 2011

Campus Subsidies of College Athletics

USA Today has released an accounting of university subsidies for their athletic programs.  Rutgers has the unwelcomed distinction of finding itself at number one in that league table. But a closer look at the issue suggests that the it is far more complicated than just subsidization.

From USA Today:
Last year, Rutgers used nearly $27 million in university and student-fee money to balance its athletics budget. It was not unusual: Since 2006, Rutgers has spent more than $115 million to cover athletics spending, a USA TODAY analysis finds.

Also last year, Rutgers said it would withhold scheduled negotiated raises for its employees because of state funding cuts, a move expected to save $30 million.

The battle between academics and athletics is brewing nationally. Subsidies account for $1 of every $3 spent on athletics at NCAA Division I schools. Since 2006, athletics budgets at 219 Division I public schools have increased 22%, and subsidies — the part of the budget that comes from student fees and university money — have increased 26%.

But no athletics program has matched Rutgers' subsidies; $115 million is the highest for any public school and nearly twice the subsidy of the next highest school among the power conferences — those whose football champions automatically qualify for the Bowl Championship Series.
The fact that the athletic department subsidy at Rutgers just about exactly matched the foregone employee raises certainly won't go unnoticed and helps to explain why many faculty members at large universities abhor their athletic programs.

Of note is that many of the biggest programs -- such as Texas, LSU, Nebraska, Michigan -- operate with no subsidy.  Of course, having your own TV network helps to balance the books.  But this reflects a key aspect of the issue, according to USA Today only 22 Division I athletic programs (out of 346) balanced their books.

In this sense, athletic programs are like most every other program on campus: only a select few are actually financially self-sufficient and the rest are subsidized -- by funds that come from tuition, state and federal governments and private donations.  (In fact, college athletics are not so different from professionals in this respect, but I digress.)  Further, a lot of these funds are moved around campus from revenue generating sources to revenue depleting sources.  And there is little evidence to suggest that many people are troubled by these transfers.

So when faculty members complain about the athletic program receiving a subsidy from other parts of their campus, the odds are that their own salary is heavily subsidized as well.  The deeper questions go to the role of the modern university and the place of athletics in it, versus other priorities, issues that I'll be revisiting here on a frequent basis.

Note: According to the USA Today data, my university -- Colorado -- has a relatively low level of subsidy for its athletic program, about $7.3 million in 2010 or 15% of the athletic program budget.  And faculty here have not seen raises for the past 3 years.

Sunday, June 26, 2011

FIFA vs. Belize -- Global NGO vs. National Sovereignty

Do FIFA rules trump national sovereignty?  This would seem like a silly question, but in international football you'll find not just silly questions, but silly answers.  In this case the answer is "yes."

Consider current goings-on in Belize:
World football's governing body, FIFA, has suspended the Belize football federation with immediate effect citing "severe government interference".

FIFA issued a statement on Friday after its emergency committee had issued the ban.

The suspension means that the return leg of the qualifier for the 2014 World Cup against Montserrat, which was scheduled for Sunday, has been postponed, after Belize won the first leg 5-2 on Wednesday.
What violation has the Belize government made to incur the wrath of FIFA?  It appears to be nothing more than holding its national football association accountable to its domestic laws:
The government of Belize in Central America has accused local football boss Bertie Chimilio of banning opponents from elections so he can remain in perpetual power. On June 7, after eight years of urging the Football Federation of Belize (FFB) to publish its accounts and hold transparent elections, the government gave up and told Chimilio his federation ‘was no longer authorised to represent Belize.’
The sanctions that FIFA can impose are severe:
Belize’s footballers are currently competing in qualifiers for the 2014 World Cup. On June 17 Blatter summoned FIFA’s emergency committee. Not surprisingly it ruled that the Belize government must stop ‘their severe interference.’ Until FIFA gets this guarantee, the national side is banned from playing further World Cup matches. A game against Montserrat has been postponed and may be cancelled if Belize doesn’t bow to Blatter. The team are heartbroken.
Who in FIFA made the decision to suspend the Football Federation of Belize from participating in 2014 World Cup qualifying?
FIFA ‘s emergency committee is comprised of Africa’s Issa Hayatou (under investigation by the IOC for allegedly taking a $30,000 bribe), Paraguay’s Nicolas Leoz (accused of taking five bribes totalling $730,000) and Sepp Blatter (accused of forwarding a bribe to Joao Havelange and also being investigated by the IOC).

Mohammed Bin Hamman couldn’t vote; he is suspended, accused of paying $1 million in bribes in this month’s FIFA presidential election campaign. Oceania’s David Chung is a new member and alongside him is Uefa’s Michel Platini.
Michel Platini is thought by many to be the leading candidate to succeed Sepp Blatter as FIFA president.  Of note UEFA recently demanded that FIFA follow through on its promise to reform its governance to eliminate corruption:
Allegations of bribery during the recent presidential election led to FIFA executive committee members Mohamed bin Hammam and Jack Warner being suspended indefinitely, with Sepp Blatter being re-elected as president unopposed.

UEFA president Michel Platini wants Blatter's promised changes to FIFA to be carried out as soon as possible.

"The executive committee takes good note of the will of FIFA to take concrete and efficient measures with regards to good governance, expects to see results within the next three months and is following the situation closely," UEFA officials said in a statement.

These sentiments were echoed by UEFA executive committee member Jim Boyce, who also happens to be vice president of FIFA.

"All of the UEFA executive committee are absolutely adamant that FIFA has to do something and has to be seen to be doing something," Boyce said.
"We have given three months to see if appropriate action is taken by FIFA. Obviously we will discuss that again at the next meeting (in September)."
Platini has thus far been silent on Belize, but it marks a notable case to assess the degree to which FIFA is actually serious about reform.  All indications are that it is business as usual.  

National governments must retain the right to hold their national football associations accountable to national laws.  FIFA should not provide cover for corruption, but that appears to be exactly what it is doing when it invokes its "political non-interference" principle.  Any effective reform of FIFA will take this into account.

Friday, June 24, 2011

Diminishing Returns

Today's FT helps to put the economics of sports franchises into perspective:
The combined big five soccer leagues in Europe made €8bn in revenues last year, estimates Deloitte – less than Marks & Spencer.
That can be put into another context -- FIFA's annual revenues are about $1.3 billion.

Here is another calibrator:
The headline grabbing $400m Platinum Equity supposedly paid for the Detroit Pistons this month is equivalent in size to Stein Mart, 468th in the S&P 600 small cap index. (And the retailer makes 10 times the revenues.
Sports franchises are less profitable because of the high cost of player salaries:
Incredibly, the market cap of Juventus FC is only 30 times the annual salary of its best paid player. Goldman Sachs’s market cap is 5,000 times its boss’s last pay packet.
It kinda turns on its head the notion of bosses exploiting workers.

Thursday, June 23, 2011

Stuff I've Written Elsewhere

This post will be periodically updated as a running list of commentary, articles etc. that I've published elsewhere.

12 January 2014, Law in SportUS immigration policy negatively impacts US Soccer

28 October 2013, Play the Game, A Deeper Look at FIFA's Reform Scorecard

19 June 2013, Play the Game, A Report Card on FIFA Reform

6 June 2013, The Guardian, How Innovations Such as Goal-Line Technology Make Sport Better,

3 June 2013, Play the Game,  Which Way for Sunil Gulation the FIFA ExCo?

29 January 2013,The Breakthrough Institute, On Lance Armstrong: Why Sports Need Stronger Institutions.

15 January 2013, How can FIFA be Held Accountable? Sport Management Review (PDF).

17 Sept 2012, The Breakthrough Institute, The Politics of Prediction: A Review of Nate Silver's The Signal and the Noise (Penguin, 2012).

July 2012, OST: Bridges, Science, Sex and the Olympics

10 June 2012, Boulder Daily Camera, We need more transparency in college athletics

3 May 2012, Financial Times, Action on Governance Gathers Pace

22 March 2012, Freakonomics Blog, False Positive Science: Why We Can't Predict the Future

3 March 2012, Boulder Daily Camera, The enduring importance of higher education

24 November 2011, New York Times Room for Debate, Competing for TV Contracts

26 September 2011, Transparency International's Space for TransparencyWhat are the Prospects for FIFA Reform? and also posted at Play The Game, 29 September 2011

7 August 2011, New York Times, Klinsmann Will Find There are No Points for Style

24 July 2011, Boulder Daily Camera, Pay-for-play in college athletics

20 July 2011, New York Times Room for Debate, Holding the agency accountable

1 June 2011, Financial Times, England shows the way for members to tackle FIFA crisis

Welcome to my new blog

This blog is where I'll be writing about issues related to my work on sports in society. My interests are primarily in three areas: 1) the governance of international football (soccer), 2) the governance of college athletics, and 3) sport as a laboratory for social science research.

Your participation in this blog is welcomed and encouraged!