The economics of sport (1979)

From the March 1979 issue of the Socialist Standard

Anthropologists sometimes refer to sport as an example of how codes and conventions can radically alter the significance of everyday activities, pointing out that anyone anywhere can kick a ball past a post but that only within the institutional framework of a football match can one score a goal. This can be taken further: only in a society based on commodity production can one get paid for scoring goals, making runs, serving aces, converting tries, and so on.

As with everything else under capitalism, sporting activity cannot be carried on in isolation from harsh economic realities. This applies also to participatory sports of non-experts. Providing sporting equipment (pitches, clothing. rackets, balls) is big business, geared to making a profit. There is no point in producing only top quality cricket bats and tennis balls, since most workers cannot afford to buy them. As a result, thousands of workers spend their time producing cheap saleable sub standard goods.

But when most people speak of the money involved in sport, they are referring to the vast sums earned by leading professional players, for instance £40,000 to the winners of a recent tennis doubles tournament that involved playing just five matches. Top boxers like Muhammad Ali can earn a million dollars a fight, though much of this money goes to support a large retinue of hangers-on. In most sports, the possibility of such huge earnings is comparatively recent; the maximum wage for footballers was only abolished in 1961, and we have all seen stories of how yesterday's goalscoring heroes are today's social security "scroungers''.

In fact the vast majority of professional sportspeople sell their labour power (their sporting proficiency) for a wage not noticeably greater than they would receive in a factory of office. Indeed, there was a case a couple of years ago of a Fourth Division footballer returning to his previous job as a carpenter because it was better paid.

Many county cricketers—those who have not caught Kerry Packer’s eye—spend the winter on the dole and on the breadline. And it should not be forgotten that for most a career at the top will last fifteen years at the outside. Even the highly paid George Best looked to his post-footballing future by opening a chain of boutiques while he was opening up opposing defences.

Let's look a little more closely at the economics of football. Only a handful of league clubs can exist on income from gate money. Others survive by selling their best players for huge transfer fees, but most rely on various fund-raising schemes run by their supporters’ clubs or on money made available by their directors. Football club boards are usually self-perpetuating elites who deny their players and other employees any say in the running of the club, are often prepared to sack the manager after a handful of adverse results and yet themselves remain in charge no matter how badly things are going. At Newcastle United the directors refused to appoint as manager a man the players preferred: this was one of the causes of the disputes which led to many of the best players leaving the club and the remainder becoming so demoralized that United were relegated. The directors stayed put. however.

In view of the unprofitability of most clubs, directors aren’t in it for the money (the recent controversy over the issue of new shares at Manchester United, perhaps leading to enormous profits for the chairman and his family, is exceptional).. Directors are normally wealthy businessmen who either regard football clubs as rich men’s playthings (the way other capitalists view their mistresses) or aim to acquire some local kudos or publicity. The very last people to be considered at any football club are the paying spectators: at far too many grounds the view from the terraces is atrocious if more than a handful turn up to watch, while sanitary facilities are a disgrace. Part of the explanation for this is that money spent on new players entitles the club to tax relief, while that spent on ground improvements does not.

The most recent example of the impact of financial considerations on sport is undoubtedly Kerry Packer’s World Series Cricket. The world’s leading cricketers were persuaded by merciless application of the cheque book to play against one another in matches not under the jurisdiction of the official cricketing authorities but concocted for the benefit of Packers’ television cameras. Packer’s TV station had been unable to wrest coverage of Test matches from the Australian government broadcasting service, and his response was to stage and televise his own matches. Various commercially-directed gimmicks followed such as portable pitches and floodlit cricket played with a white ball. One hilarious episode was a match played in the United States, which introduced such variants as bowling all overs from the same end (to make things easier for Americans brought up on baseball). America, you see, offered an enormous potential market where there was no built-in opposition to Packer’s series. It may be arguable that spectators will see more and better cricket under Packer’s scheme, but what is certain is that the ordinary county cricketer has in no way benefitted.

One effect of increased commercialization has been the disappearance of the amateur from many sports. Lawn tennis was made open just over a decade ago, ending the ludicrous situation where full-time tennis players were officially amateurs, their jobs usually being “representatives” for sports goods firms. In football the FA Amateur Cup has been discontinued and cricket no longer distinguishes between Gentlemen and Players. Amateurs still exist at or near the highest level in some sports (Scotland’s Queen’s Park Football Club, for instance) but as a rule the part-time player cannot hope to compete with the full-time, professionally-coached, opponent. Hence the proficiency of Eastern European athletes, who are able to devote almost the whole of their time to sport while being strictly amateurs whose official occupation is student or teacher. Variations on this idea are by no means new. Arsenal Football Club was founded in 1896 as a works team of the Woolwich Arsenal, but soon players were conscripted for the team and then placed in jobs specially created for them (an ignominious start to such a famous team).

The lack of profitability of most sports has led to an increased reliance on two sources of revenue, sponsorship and television. The winners of the £40,000 prize mentioned earlier can proclaim themselves not just as World Double Champions but as Braniff Airways World Doubles Champions. Other lucky people can win the John Player League or the Texaco Cup, or can take part in a Coca-Cola International. He who pays the piper calls the tune, of course, and events are often modified to suit the sponsors' requirements.

The importance of television’s financial support for sport is graphically illustrated by the deal between the Football League and London Weekend Television, an agreement so momentous that it led to questions in the House of Commons and investigation by the EEC. Sports like Rugby League, which has permitted live televising of games, have seen gates diminish and hence an even greater dependence on cash from TV. One of the problems with marketing (an appropriate word) soccer in the US is that, unlike American football, it lacks those brief natural breaks so suitable to the insertion of advertisements during a live broadcast; perhaps players will be encouraged to waste even more time at throw-ins so that the precious ads can be slotted in.

So while watching and taking part in sport is one of the ways in which many workers relax and enjoy a respite from their daily toil, it is as well to remember that even there the requirements and limitations of capitalism still make their ugly presence felt.

Paul Bennett

The Yesterday League (1987)

From the September 1987 issue of the Socialist Standard

With Wimbledon well in the past and the first class cricket season nearing its end, we must be approaching winter and the beginning of the football season. So get out your scarf and woolly hat and get yourself ready for another nine months of cliches and clobbering.

How you view the new season may depend on whether you live in Scarborough or Lincoln. The innovation of automatic promotion and relegation between Division Four and the GM Vauxhall Conference was intended to catch perennial strugglers like Rochdale and Halifax: instead it ensnared Lincoln City, who the previous season had only just been relegated from Division Three and who now find themselves cast into something approaching outer darkness. Their replacement is not a team from the desirable commuter suburbs like Altrincham or Barnet but down-market Scarborough, who are pledged to try and survive by continuing to play part-time. As league clubs cut their playing staff to the bare minimum, the difference between Division Four and top non-league clubs diminishes all the time anyway.

At the other end of soccer's ladder of success. the pre-season headlines were made by the moves of Howard Kendall. Peter Shilton and Peter Beardsley. Kendall, having managed Everton to the League Championship, has been lured by the pesetas of Athletic Bilbao. Even if he returns to Britain after a couple of years, he is likely to be a millionaire by then — easily so if Bilbao win a trophy or two. So he may not stay long enough to need to learn Spanish (or Basque for that matter).

The rest of the transfer market has concerned players rather than managers. Glenn Hoddle left Spurs to join Monaco, who. according to the Guardian, play on the fourth floor of a shopping precinct before crowds of just over four thousand. Shilton has gone from Southampton to newly-promoted Derby County, in a deal widely described as worth a million pounds (most of which will apparently find its way into the bank account of Shilton himself rather than that of Southampton). This is the first big purchase at Derby since publicity-hungry capitalist Robert Maxwell took over as chairman from his son and it surely will not be the last.

Maxwell, in case you didn't know, is also owner of the Daily Mirror. It's an interesting combination, as football clubs and newspapers have a lot in common besides relying on each other for publicity and sales. Both are often poor investments from the ordinary capitalist standpoint, delivering more losses than profits (the continuing ban of English clubs from the European competitions sharply limits the profit-making possibilities). But both can be attractive toys to play with, providing publicity, excitement and a chance to impress people and do down the opposition.

The most shattering pre-season event was the abrupt withdrawal of the League sponsorship by Rupert Murdoch's Today. This proved that Murdoch's rivalry with Maxwell is unlikely to extend to the field of sport-, the big boss of the Sunday Times, News of the World and the rest is interested in the glamour only of a healthy balance sheet. Todays withdrawal may lead to legal action by the League to get some of the money it presumed was coming its way through the sponsorship. This one will run and run.

An extra bit of excitement was added at the end of last season by the promotion/relegation play-offs (a return to something very like the system originally abolished in 1898). While the introduction of these coincided with changes to the sizes of the top two divisions, this could easily have been achieved simply by adjusting appropriately the numbers of teams promoted and relegated. The play-offs were in fact set up purely for financial reasons — which is bad news for. say, Oldham, who got sizeable crowds at playoffs but thereby lost out on a lucrative promotion to Division One. Automatic relegation from Division Four may have helped boost some end-of-season gates too — at least. Burnley don't draw crowds of fifteen thousand for any other reason any longer.

As they say, may the best team win. Sometimes, of course, the best team may win. but more often it's the one with the richest chairman.

Paul Bennett

This One Will Run and Run (2005)

From the September 2005 issue of the Socialist Standard

The news that the 2012 Olympic Games had been awarded to London sent the Stock Exchange Index up to a three-year high — the biggest gains in share price were for a company that specialises in wiring sports stadia and other landmark attractions. Clearly many companies hope for an economic bonanza, especially those involved in construction and the hotel industry. Staging the games may be enormously expensive, but some firms at least will make an awful lot of money out of it. The Olympics, after all, are only in passing about sport; they are also about nationalism and, primarily, profits.

Only a small part of the income will come from ticket sales — the overwhelming majority is from the sale of broadcasting rights and corporate sponsorship. So important is this last point that companies who aren’t official sponsors are likely to be banned from associating themselves with the games in any way (Evening Standard 7 July). The government will guide an Olympics Bill through parliament, designed among other things to prevent ‘ambush advertising’, where companies pass themselves off as somehow linked to the games, whether as sponsors or not. However ludicrous this sounds, it’s not unique. The 2003 cricket World Cup in South Africa was sponsored by Pepsi, and spectators drinking Coca-Cola were ejected from venues; moreover, this was sanctioned by new marketing laws introduced by the government. (In No Logo Naomi Klein mentions an American high school which held an official Coke Day with lots of promotional activities, but where one student was suspended for going to school in a T-shirt with a Pepsi logo.) At the 2000 Olympics in Sydney, companies had to pay to use any kind of Olympic name or logo (including some that had been established for years under the name of ‘Olympic’).

One of the principles of capitalism is that ownership of something gives you exclusive rights over its use, including whether, and how, you allow others to have access to it. This applies not just to physical things such as land, oil, rivers and factories but also to ideas and inventions — hence the development of patents and protection for ‘intellectual property’, and the clamping down on counterfeit and imitation goods. And, as we can now see, it also holds for particular names and logos, and for advertising space.

The International Olympic Committee jealously guards its control over the Olympic name and advertising at the games venues. Companies who pay hefty fees for sponsorship buy the ‘right’ to advertise and sell their products, to the exclusion of any direct competitors. Just as football stadia are now named after corporations and products such as Reebok and Walkers’ Crisps, and clubs do their best to stop the sale of bogus ‘official’ kit, so the Olympic ‘movement’ says that only companies who stump up the money to them can gain any kudos from the magic O-word and the five rings.

Naturally money has long been talking the Olympic language with regard to the 2008 games in Beijing. Three levels of corporate involvement are envisaged, including partners (cost $40 million), and sponsors (over $20 million). Budweiser, for instance, is the official international beer sponsor, giving its owners Anheuser-Busch the right to use the 2008 games logo for promotional purposes in China and many other countries. And it’s not just a matter of getting money in for 2008. In the words of one marketing expert, ‘The Beijing Olympics will not be about sport, it will be about creating a superbrand called “China”’ (LINK). So as China flexes its muscles in terms of currency revaluations and provides financial support for Mugabe’s thuggish regime in Zimbabwe, it also competes in staging the Olympic free-for-all and marketing itself within world capitalism.

Paul Bennett

Action Replay: Naming Ceremonies (2012)

The Milk Cup back in the day.

The Action Replay Column from the April 2012 issue of the Socialist Standard

You may well have thought that the Zambian football team won the Africa Cup of Nations back in February. But in fact it was the Orange Africa Cup of Nations, since this is one of the increasing number of international sporting competitions that have adopted sponsorship to the extent of incorporating a multi-national company into their name.

It is, however, mostly domestic competitions and stadiums that have attracted sponsors’ names. Football’s Carling Cup has had several, such as the Milk Cup when it was sponsored by the Milk Marketing Board (something scarcely credible now).  It had started life as the simple League Cup. Rugby union has the Aviva Premiership, rugby league the Stobart Super League, and cricket the Clydesdale Bank 40. Some mileage is got from the fact that it’s the FA Cup with Budweiser, rather than the Budweiser FA Cup, as if that made a big difference. Alcohol, banking and insurance seem to be popular sources of sponsorship.

The trend to new stadiums in recent years has led to sponsors’ names being commonly used to label the new ground, such as the Etihad and the Emirates. Sometimes existing stadiums have been renamed, if only temporarily: for a few years, York City’s ground rejoiced in the name of KitKat Crescent, under a deal with Nestlé. Newcastle United have played at St James’ Park since 1892, but last year the owners decided that this was not ‘commercially attractive’ (St James himself not having very deep pockets presumably) and so renamed it the Sports Direct Arena after the company run by the club’s owner. This is only a temporary move, mind, pending the identification of a long-term sponsor.

Clearly sport is just part of the increasing importance of the global brand in modern-day capitalism.

Paul Bennett

Action Replay: Playing Partners (2012)

The Action Replay column from the June 2012 issue of the Socialist Standard

The Olympics will soon be on us, with their massive TV and press coverage and their never-ending opportunities for sponsorship and money-making, as well as some sporting contests. The International Olympic Committee is a brand in its own right and a very powerful one at that, as it can require host governments to introduce legislation protecting its copyright.

So in 2006 the UK parliament passed the London Olympic Games and Paralympic Games Act, which went even further than existing law in preventing companies who have not paid for sponsorship or partnership rights from making any use of Olympic terminology or symbols. Even using ‘Games’ and ‘2012’ together might constitute an offence, unless you’ve paid for permission. So Coke and Adidas (as official sponsors) will be OK, but Pepsi and Nike will have to be very careful about what they say. During the Games themselves, athletes will not even be able to blog about their breakfast cereal unless it’s made by a Games sponsor. A spokesperson for the local organising committee put it bluntly: “Without the investment of our partners, we simply couldn’t stage the Games.”

This is not working as well as those behind it might wish, however, with so-called ambush marketing (where a non-sponsor manages to link itself to an event in some way) proving very effective. Thus Adidas is apparently less associated with the Games in people’s minds than Nike, and British Airways (the official airline partner) less so than Lufthansa.

Just imagine the effort that intelligent and creative people are putting into ensuring that companies keep within the law but exploit the Olympics for their own profit.

Paul Bennett

Money games (1988)

From the August 1988 issue of the Socialist Standard

Sponsorship is the game these days, as can be seen from the names of the competitions. From the Sherpa Van Trophy to the Ever Ready Derby, sponsors have taken an ever more prominent role. Since the advent of the Gillette Cup in 1963. sports sponsorship has become big business. It seems to be good business, too. with the Cornhill Insurance Company having doubled their turnover since beginning their association with test cricket. Sports sponsorship, together with smaller projects like financial support for opera, provides companies with cheap mass exposure.

The rising costs of organising sports events — especially the income of a handful of top performers — and the long-term decline in numbers of paying spectators have forced many sports into the arms of the sponsors. Loss of sponsorship can trigger a major financial crisis. There was panic when the Today newspaper suddenly dropped its backing for the Football League (though Barclays soon stepped in) and. more recently, when a unit trust group decided not to continue supporting the British Open snooker championship. Sports like hockey, with a million pounds in sponsorship over the last four years following British medal wins, are more fortunate. There is even a special credit card for channelling funds to Britain’s Olympic rowing squad.

In addition to outright sponsorship, the other major source of funds is broadcasting, especially TV. Millions of pounds are available from this source, but only so long as the viewers keep tuning in. When they don't, the supply of money will be switched off too. Most cataclysmic, perhaps, was ITV's decision to stop screening professional wrestling after over three decades. Channel 4 has stopped televising snooker. Administrative bodies for other sports have begun to flex their muscles, with the BBC forking out larger sums than in the past for coverage of golf and rugby union. Now the most televised sport of all, cricket, is seeking to sell itself to the highest bidder.

Most interesting and revealing, however, are the current shenanigans in the world of football. The potential of satellite TV and European-wide broadcasting has raised the stakes and introduced new bidders into the game. The Football League approved a ten-year deal with a satellite company worth a cool £200 million, with the prospect of further money from ITV and BBC. ITV then contacted some of the top clubs directly, with the aim of exclusive rights to broadcasting from their grounds. This led to accusations that a Super League was being introduced through the back door. Super-capitalist and football entrepreneur Robert Maxwell then threatened to throw his weight into the competition. At the time of writing, the outcome is unclear, though it is a fair bet that the interests and preferences of the ordinary football supporter won't determine the upshot.

Ordinary supporters are now, in many cases, "members" of their clubs. But the membership scheme, designed to reduce and control violence, has done little but inconvenience supporters and line the pockets of some of the clubs. Being a member does not entitle you to any kind of say in how the club is run.

Sponsorship does not just go to tournaments or governing bodies, but also to individuals. It is here that the tennis superstars, with their media exposure and world wide reputations, come into their own. They can "earn" a million pounds a year or more by endorsing everything from clothes to watches and fruit juice. Even while playing they are like highly-paid sandwich-board men. flaunting adverts for this and logos for that. It helps, of course, to meet conventional ideas of attractiveness, like Becker or Sabatini. It really would have been appropriate if Pat Cash had won the Wimbledon title again this year.

It should not be forgotten, though, that most sport is played not by the idolised and pampered but by ordinary people for the fun of it. Practically any activity beyond a kickabout in the local park requires some kind of established facility. Many municipally-owned sports centres and swimming pools exist, and these have recently come under the government's privatisation obsession, with a plan to put their running out to tender. Of course, some people aren't too worried by the prospect of increased fees at council centres, such as the members (who include Princess Diana) of the Vanderbilt Indoor Racquet Club, who pay £650 just to join, and £500 annual subscription No problem here with too many players for too few courts and showers that don't work.

The state's involvement in sport goes way beyond providing tennis courts and putting greens. Since 1974 there has been a Minister for Sport, and government lackeys frequently pronounce on topics from hooliganism to drug-taking. It was the increasing internationalisation of sport, with its opportunities for boosting national prestige, that led to state interest in and supervision of various aspects of sport. The government does very well financially out of sport, with a huge income from betting tax. Top persons' horse racing trainer Henry Cecil complains that the government should put a lot more money into racing — state subsidies are acceptable for the sport of kings and queens, apparently.

A reader of the Sun could no doubt be forgiven for thinking that sport exists primarily to provide salacious stories and sell newspapers. A specifically sporting press has existed for a century and a quarter, providing lots of publicity, sometimes sponsoring its own events, and surely increasing the number of spectators. When radio first emerged, the newspaper owners thought of no more than their own profits, trying in vain to prevent the broadcasting of football and racing results on the grounds that this would hit their sales.

In a society where nearly everything is for sale and virtually nothing is produced or provided without an eye to profit, it would be naive to expect sport to be in any way different. Sponsorship by business and the media is often the only way of staying afloat. If ordinary practitioners and spectators enjoy no benefit from the sponsorship money, too bad. If facilities for watchers and players remain abysmal, too bad. If the money instead lines the pockets of a favoured few, too bad. Capitalism, after all, is not about meeting the interests of the person in the street, so why should things be different for the person on the sports field?

Paul Bennett