Business and Society Economics

Money and Sport Don’t Mix

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Does professional sport as we know it have much longer to go? Clubs are bankrupt, the play is ignored in favour of endless analysis and criticism over refereeing or umpiring decisions, and the players are subject to pressure and scrutiny that while commensurate with their earnings is obviously not compatible with family life. Even the great sporting love of my life, cricket, has become enslaved by the need to maximise income with the advent of zero-subtlety twenty-twenty franchises and the dragooning into the England team of anyone with a feasibly British connection.

There is an incompatibility between the purpose of sport and running its teams as businesses in a competitive environment. So much is intuitive, but it is also the result of a considerable amount of research into the economics of sport. Recent research* suggests that competition at both the sporting and economic level must become destructive by leading to over-investment in playing talent. This propensity is likely to be exacerbated by inequality within and between domestic leagues, and by the existence of additional rewards (such as Champions’ League participation for football clubs) to those reaching the top of domestic leagues. Empirically, what is currently happening on and off the pitch in English football seems to fit pretty well with these findings.

The problem professional sport faces is that any organised network of competing clubs in a sport has to be a fine balance between co-operation and competition. Without co-operation there is no durable framework of rules, either of the game by neutral officials or of the competition by league or association office-bearers. Without competition there is no challenge to perform well and to improve, and little interest for committed spectators. The nature of the dual competition described above is that, without intervention, it is likely to undermine co-operative endeavour. Fragmentation of the sport becomes increasingly probable.

The fact is that sports and games are displacement activities. The great games were developed for the instilling of teamwork and discipline into the young, the training of officers for military leadership and for the engagement and relaxation of men who endured mindless toil during their working week. To this end they were created with deliberately artificial rules and boundaries that marked them off from the real world of danger, death and trade. We know from numerous business scandals such as Enron and Lehman’s that even rules specifically crafted to be robust in the face of real-world motives and rewards are seen as challenges to be overcome by crafty accounting techniques. What chance rules and co-operative norms developed for recreational games where no great rewards or losses were ever intended to be at stake?

We hear football managers expressing their disgust at refereeing decisions that will cost their club millions of pounds, but the problem is not with the referees – they are human beings trying to adjudicate rules that were never intended to have that much freighted upon them – but with the millions. Many are apparently appalled at the antics of ‘role models’ such as John Terry or Tiger Woods, but these guys are not even in the real world – they are only playing a game. We should have no more moral concern or interest in their behaviour than any other fictional characters. They shouldn’t get paid much more either, and they only do thanks to a skewed system of capitalism that lands wealth in the hands of the likes of Abramovich or Murdoch who can find nothing more constructive to do with it than parade these paragons across the globe (or the Premier League – whichever is thought to be the bigger).

The bankruptcy of clubs like Portsmouth and my club, Livingston (twice in 6 years), and possible debt crises for Manchester United and Liverpool may turn out to be the best thing that ever happens to sport, if it means we can get back to the pleasure and excitement of simple sporting competition rather than endless ruminating about clubs’ finances, players’ sex-lives and how to move refereeing decisions from the pitch to the TV studio. We are seeing grassroots movements such as those supporters protesting against the Glasers at Manchester United with their green and yellow scarves, and the Chester City supporters planning to restart their wound-up club in a lower league. Perhaps more groups such as these will take over when wealthy owners finally see that they can only lose money (and reputations) on their ‘investments’.

 *Published as Dietl, Franck and Lang (2008), Scottish Journal of Political Economy, Vol 55, No 3

© Diarmid J G Weir 2010

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