Globalization
has changed the very nature of the way sports has
been traditionally played and organized worldwide.
It has threatened the existence of indigenous sports
and traditional games that have so far played significant
roles in shaping local and national identities. Today
sports, instead of being a social tool, is put into
use by the sponsors to promote their brands and products.
The overall dominance of values of trade is, therefore,
leaving a negative impact on the future of sports.
Nowadays no sporting event is organized just for sheer
enjoyment. On the contrary, the new generation in
almost all communities wants to play games that would
help them in securing status, sponsorship deals and
international acclaim. Anything that local communities
might cherish, but the market might find not profitable
enough cannot survive in today's world. A recent
example is the withdrawal of Castrol as sponsors of
the Indian men's hockey team (once the best
in the world, but currently not attracting too many
spectators) as part of the company's cost-cutting
exercise. The emphasis is solely on mass-market communication,
sponsorships and television ratings. As Anthony Giddens
has pointed out, globalization has increasingly detached
people from local traditions [1],
while David Harvey[2] has
emphasized on the speeding up processes that have
been a result of the technological and economic changes
made possible through globalization, particularly
since the end of the 1960s [3].
Sports has become inextricably linked to capitalist
firms that have the sole objective of maximizing profits,
and the new global political economy has facilitated
this process. International sports bodies and federations
like the International Olympic Committee (IOC), Federation
Internationale de Football Association (FIFA), International
Amateur Athletics Federation (IAAF), International
Cricket Council (ICC)) earn enormous revenue by selling
television and sponsorship rights to Multinational
Companies (MNCs). Only thirty years ago the total
sponsorship money in sports was to the tune of US
$5,00,000. In the last few years it has skyrocketed
to US $20 billion. The television rights to the last
Soccer World Cup and Olympic Games combined were reported
to be over US $2.3 billion.
The distribution of this sponsorship money, however,
has been far from egalitarian. In 1998, of the total
money that came to sports from sponsors, 37.8 per
cent was spent in North America, another 36.4 per
cent was spent in Europe, and 20.8 per cent in Asia.
South America got a very small amount, while Africa
got almost nothing. One wonders why Brazil, the reigning
FIFA World Cup champions, got almost nothing, and
why its players mostly play for European clubs to
earn more. It has to do with the reach of the cable
television-through which the sponsors reach out to
the potential consumers with their products-in Brazil,
with only 3.3 per cent of Brazilian households having
access to the same.
Also, no longer do the financial gains from sports
go back to benefit sports. Sports is being treated
as any other merchandise. Profits generated from organizing
sporting events now go into the pockets of agents
and merchants who use sports merely as a means of
financial speculation[4].
As mentioned of by George Wright, the global sports
industry consists of multiple forces that have overlapping
relationships and increasing concentration and centralization
tendencies. A categorization of those constituent
parts include: conglomerate oligopolies that own a
range of subsidiaries, including sports-oriented firms
as well as other firms that can complement the sports-related
businesses; firms whose sole activities centre around
sports, some in the service sector, some in mass entertainment,
others in manufacturing; national sports leagues that
promote their teams and athletes and have sponsorship
and merchandizing relations with TNCs and local businesses,
and international sports organizations and federations
and national sports bodies. Businesses that are allied
to the sports industry include suppliers of food and
beverages at stadiums, raw material suppliers for
sports apparel and shoe producers, public relations
firms, sports lawyers, and the sports medicine industry.
Finally, gambling, which has legal and illegal components
overlapping formal and informal economies worldwide,
is also integral to the global sports industry[5].
As discussed by Mike Marqusee [6],
with the convergence of a deregulated financial regime
and the spread of information technology, substantial
sums of money now flow from one account to another
with blithe disregard for national boundaries or legal
niceties. In the globalized economy, information is
not only the driving force but a precious commodity
in its own right: informants inside the dressing rooms
or the press box provide bookmakers with the valuable
information, and are rewarded accordingly.
Recent sporting events have witnessed increased involvement
by multinational business houses and global telecommunication
and media oligopolies, including News Corporation,
Disney and Time Warner. It is these companies which
now decide the scheduling and production of sporting
competitions, rather than the international bodies
that govern the games. These companies use sports
as a marketing device and often own teams in different
games, from soccer to baseball to basketball to motor
sports, besides sponsoring a number of national and
regional teams in several countries in the world.
Disney, for example, owns ABC Sports, ESPN, Eurosport,
and teams like the Anaheim Angels (Major League Baseball)
and the Mighty Ducks (National Hockey League). 'The
ownership model of the 21st century is you buy the
franchise, you buy the sports facility, you develop
other opportunities around the sports facility, including
retail and entertainment developments. You buy radio
stations or television stations, or create a regional
sports network', says Bonham, the Denver sports
consultant. 'You basically create a sports conglomerate
from the ground floor up.[7]"
Sports associations and governing bodies have structures
ill equipped to deal with the dramatic changes that
result from the involvement of media companies such
as those owned and controlled by Murdoch. This is
bound to happen to any game if it is taken over by
someone who treats sports not as a performance, but
simply as just another product. In fact owners of
several teams, be in baseball, basketball, rugby,
soccer, or any other sport, have often made millions
by selling the teams off to others.
All these purchases would not have taken place if
not for the immense opportunity that ownership of
such teams provide in popularizing and merchandizing
the business houses that own them, and the money they
can make from the sale of advertising, televising
and other rights, as well as sports-related merchandise
endorsed and popularized by top players playing for
these teams.
During the period when Ronaldo played for Inter Milan,
2000 jerseys with the number used by Ronaldo during
the games sold daily from the club. Inter Milan saw
their sale of season tickets soar from 35,000 to 48,000
once Ronaldo joined the club. Barcelona also enjoys
similar business booms riding on Ronaldo's association
with the club. In 1999 the English soccer club Manchester
United earned only US $56 million through sale of
tickets. However it earned another US $70 million
through commercial activities and US $46 million from
the television channel that it owns. In the year ending
in July 2002 Manchester United earned revenue of US
$190 million, with a net profit of US $22 million.
Manchester United has 50 million fans worldwide, with
30 million of them in Asia. The club's property
is estimated at more than US $800 million. Figures
for Juventus and Barcelona FC also tell similar stories.
As Mark Cuban, who bought the Dallas Mavericks, an
NBA side, for US $280 million has openly admitted,
'having paid $200 million [sic] for my franchise,
I want, and need, the NBA running on all cylinders
in order to maximize the return on my investment
[8]". This, in fact, is the guiding
principle and bottom line of all investors in today's
world of corporate sports business.
Endorsement of goods marketed under multinational
brand names by popular sportspersons, while boosting
the earnings of the players, have furthered the cause
of the companies to a great extent. Nike went public
in 1980 and shortly afterwards signed the basketball
player Michael Jordan. Jordan is credited with raising
the profile of the brand to new heights. Combined
with Nike's 'Just Do It' advertising
campaign that reached all corners of the world the
company saw staggering growth in revenues from $269
million to over $2 billion during the decade.
The sporting-goods industry alone is estimated to
have an annual retail market possibly of over US $600
billion, linked to a global network of small and big
businesses, focused primarily on the 16-25 age
group-an amount, more than the GDP of many countries.
This doesn't count in media revenues and sponsorship,
travel and tourism, infrastructure, associated food
and beverages, gambling, corporate entertaining, and
millions earned from sports club and entrance fees.
European soccer leagues alone are said to be a $10
billion market [9].
Following the success of Michael Jordan, Nike continued
to make huge endorsement deals. These included Andre
Agassi, Mary Pierce, Pete Sampras and Carl Lewis.
The objective of these endorsements has been to project
the Nike brand as being used by the number one athlete
in their respective sports. The cost incurred by Nike
because of these deals is counted in millions. However,
revenues generated with the success of each of these
sportsmen and women can be counted in the billions.
Latest available figures put Nike's revenues
at US$ 9 billion. With net income of $579 million,
Nike is the biggest player in the global sports business.
The vast majority of these sales come from selling
of shoes-basketball shoes, athletic shoes, tennis
shoes and more recently soccer boots [10].
However, the irony is that those who make these shoes
in factories without basic facilities and safety standards
might themselves be and have to remain barefooted.
Nike employs 35,000 mostly female workers in Vietnam.
For an eight-hour day they are paid on average $1.60.
The shoes they make can retail for upto $165 in the
United States. In a different forum Doug Hall, Chairman
of Newcastle United FC once said, 'We sell 600,000
shirts a year. Every shirt costs £50, but the
shirts cost only £5 to make in Asia
[11]." Other manufacturers of sporting
equipments, be it Reebok, Adidas, Mitre or Umbro,
are no different when it comes to paying the workers
poorly.
Sports has indeed become increasingly important to
the globalization process as a means to promote commodity
consumption. In 1993 the four major professional leagues
in the United States sold US$ 9 billion worth of franchised
goods, while the three major television networks generated
$2.2 billion in sports-related advertising, and the
cable networks generated US$ 800 million. When the
Japanese JLeague football games were put on commercial
television that same year, it generated US$ 300 million
worth of sales for Sony Creative Products and one
million new depositors for Fuji Bank.
Soccer is not a popular sport in the United States,
and just banking on the non-American workforce in
that country would not have made the FIFA World Cup
1994, organized in the US, a huge success. However,
with the commodification of sporting events, and the
development of a global mass consumption culture,
companies could advertise their products all over
the world, while the US organizers of the Cup kept
all the profits and revenue from selling of sponsorship
and television rights.
However, while sponsorship deals have made players,
many of whom (significantly in games like soccer and
athletics) had spent their childhood in abject poverty,
rich, these deals have also affected the health and
longevity of careers of several players. Countries
and players sponsored by the companies have become
hostage to the interests of the sponsors. International
sports management firms, such as the International
Management Group (IMG) control athletes and players,
promote events in which these players compete, and
produce the televising of these competitions. Nike,
the sponsors of the Brazilian soccer team, forced
an injured Ronaldo, who had convulsions the night
before the 1998 World Cup final against France led
by Adidas-sponsored Zinedine Zidane, to take the field
after being injected with painkillers. Apparently
it is because of Ronaldo's presence in the team
that Nike has committed US $2 billion for the Brazilian
national squad over ten years. And it is Nike, which
has been charting out Brazil's playing schedule
since 1997.
Entry of the corporate sector into sports inevitably
leads to concentration in the sporting industry. Business
houses, and media companies in particular, own or
purchase teams, be it in soccer, baseball or basketball,
or even athletics. Till such time that they own the
teams, the teams become marketing tools in the hands
of the owners to sell luxury suites, seat licenses,
premium seats, season tickets and multimedia content.
Companies can run teams at a loss but make up for
it through advertisements and subscription fees. Media
tycoon Rupert Murdoch purchased the US Baseball team
LA Dodgers for twenty-five times the team's then earnings
in the late 1990s. He also signed pitcher Kevin Brown
on a seven-year contract at US $105 million (about
$400,000) per game.
Salaries of players playing with major clubs have
indeed gone up many times during the recent decades.
While, not long ago, US $100,000 was a lot of money
that an entry-level player in the US league could
hope for, nowadays, signing amounts of about a million
dollars no longer make any wave. Players' salaries
have outstripped inflation by absurd proportions.
Babe Ruth, the baseball icon of the 1920s, got US
$10,000 per year in 1919, which doubled in the next
year, and in 1921 his salary went up to US $52,000
when the Boston Red Sox sold him to the New York Yankees
for US $125,000 [12].
In contrast, average annual salaries of players representing
the Sonics in the NBA League have increased 162 times
in thirty-three years. Even if one takes into account
the inflation factor, these salaries have grown at
thirty-one times the rate of inflation. Between 1976
and 2001 average salaries of those playing for the
Seahawks in the NFL rose twenty-three times, while
that of those playing for the Mariners in the MLB
went up by twenty-eight times between 1976 and 2001.
The graphs below show the rise in salaries of players
of three top teams (since they started playing) in
the United States, one each from the National Basketball
Association, National Football League, and Major League
Baseball [13].
Such deals threaten the competitiveness of smaller
clubs that are not able to spend so much on the teams.
It is inevitable that smaller clubs will soon be left
with no player of any repute resulting in fans deserting
these clubs, thereby pauperizing the smaller clubs
further and pushing them to the brink of extinction.
Eventually these uncompetitive clubs may be forced
to sell off the teams and tycoons can consolidate
and monopolize control over national leagues and sports
federations. In some other cases smaller clubs end
up as mere talent spotters and providers of a steady
flow of talented players to the richer clubs, not
only inside the country but also in different parts
of the world. The involvement of multinational companies
in the conduct of sports, and in organization of sporting
events, has often eroded the national boundaries of
the players. International soccer players are often
accused of saving their best for their clubs and not
putting in their best while representing national
squads. 'The global labor market for athletic
talent confers a de facto dual citizenship on elite
athletes that frequently devalues service to the nation
in favor of service to professional clubs [14]."
As Jayati Ghosh has cited, 'of the 23 main players
in the team from Senegal that won so many hearts at
the 2002 FIFA World Cup, as many as 21 play in the
French league. The real Senegalese football, it has
been pointed out, is not played within Senegal, but
in the clubs of Europe [15]."
National leagues in Latin America are floundering,
resulting in even lower spectator interest and increased
pauperization of the clubs. The players also lose
their obviously more attractive Latin American style
of soccer, as they play to survive in the European
circuit.
However, even as some players are getting increasingly
higher salaries, and clubs are making more profits,
one can witness growing animosity between club owners
and players, players and supporters and supporters
and club owners. Players and their agents often complain
that team owners and team managers cultivate resentment
surreptitiously among supporters toward athletes'
salary demands, knowing that media attention would
then be focused on athletes' earnings, diverting
attention away from the monstrous profits the teams,
leagues and networks make. Supporters blame the rising
salaries of the players partially for rising costs
of tickets and often create a bedlam if these players
cannot perform. Supporters also accuse club owners
of increasing the ticket prices to cover 'ever-increasing
costs', but making enormous profits, and even
selling off the teams to make windfall gains.
During the last decade fans in the US have seen seven,
nine and seven hikes in ticket rates by the Seahawks
(National Football League team), Mariners (Major League
Baseball team), and Sonics (National Basketball Association
team) respectively. Many stadiums in the US are restructuring
the seating arrangements by drastically reducing the
number of cheaper, affordable seats, and increasing
the number of box and premium seats. Corporations
rather than traditional fans purchase nearly 60 per
cent of NBA season tickets, according to Team Marketing
Report in Chicago. Not only has this driven up prices,
the tickets often go unused [16].
TPeople who used to buy the cheaper tickets, and were
usually more active supporters vociferously cheering
their teams, are now condemned to watching games on
television, or worse, reading about them in the newspaper
the next day[17]. The
games have become venues for the rich to meet and
greet, and perhaps discuss business deals.
Corporatization has changed the entire running of
sports from a traditional, fan-led model of club ownership
to private, US-style run-for-profit franchises with
fewer teams, each with territorial rights and market
zones. This indeed has been a major shift that the
world has witnessed after the corporate takeover of
sporting events and teams worldwide. Fans and supporters
no longer remain the most important stakeholder group
for any club. The corporate owner wrests control even
as the fans keep adding to the financial kitty of
the owner through increased subscription and gate-money
rates.
Corporatization of sports has also taken its toll
on players in more than one way. Even as earnings
from winning events are paling into insignificance
when compared to the sponsorship deals that top players
now command, even as players become apt symbols of
the fusion of consumerism with national chauvinism[18],
burn-outs and exhaustion of established stars have
become regular owing to over-commercialization of
sports and sporting events. Pressure on the top players
to perform in every game or event has ruined the life
of many a player, who to combat failure and depression
often take to drugs. The cases of the NBA star Shawn
Kemp, or the more illustrious one of the Argentine
soccer superstar Diego Armando Maradona, both of whom
finally ended in rehabilitation clinics for drug dependency
are just two of the innumerable sportspersons to have
fallen victim to the pressure of modern-day sports.
Besides, money in sports has led parents into pressurizing
their kids to aspire and train to become world champions
from a very early age. Parents are taking up part-time
jobs to fund their kids' training costs. Parents
often hope that a sports scholarship would pay for
their wards' tuition costs in college and hence
put additional pressure on kids to perform. This pressure
to perform is taking its toll on the kids, and coaches
have warned that they have come across kids who show
promise at the age of seven, but burn out by the time
they reach twelve years of age. As Greg Patton, a
coach with the USTA juniors has said, the kids are
often pushed too hard, when too young. As Patton says,
everybody is in a hurry to be great, and is lost when
pushed too fast and hard. For every child who ascends
to stardom, there are thousands more who never cash
in. The National Collegiate Athletic Association (NCAA)
figures in the US reveal that out of 1 million high
school rugby football players only 150 make it to
the NFL. The National Alliance for Youth Sports reports
that only 33 out of the 1 million prep basketball
players can make it to the NBA.
Doping is another cause of worry plaguing modern-day
sports. With lots of money and job offers chasing
a successful player, participants now want to win
by any means, and this has led to a massive increase
in the number of doping cases reported from all over
the world. A recent case in point is that of athletes
from several states switching over to compete for
Andhra Pradesh in the recently-concluded National
Games in India, lured by the monetary incentives Chandrababu
Naidu, the Chief Minister of the state, had promised
to all those who would win medals for the state. Even
though there is nothing wrong in athletes getting
monetary incentives, what is really worrying is that
Andhra Pradesh had the maximum number of athletes
caught for doping-related offences in these games.
As costs of watching a game is soaring, sponsors on
the other hand are trying to attract viewership by
portraying a match as a war that needs to be won by
any means. This has led to growing animosity between
the fans of 'warring' teams. Indian fans
now consider Pakistani fans as enemies. A supporter
of Steffi Graf, the German tennis player, stabbed
Graf's rival Monica Seles so that Graf could
win tournaments easily. Fans in recent times have
often disrupted sporting events when the teams they
were supporting faced a possible loss. A win against
a rival team leads to a frenzy of excitement among
the masses, who forgetting all the ills plaguing the
country get immersed in 'what' their team
has 'won'.
It is not without reason that the Brazilian soccer
player Tostao, a contemporary of the legendary Pele,
wanted Brazil not to fair too well in World Cups.
It is not because he did not support Brazil. As he
told the author of the book Football: The Brazilian
Way of Life, fans get so obsessed with Brazil's
success that they ignore the government's failure
in taking the country ahead. The people in the government,
riding on the people's obsession with Brazil's
success in soccer, can get away with amassing personal
wealth out of public funds, and still coming back
to power when elections are due. Socrates, the captain
of the Brazilian squad during the early 1980s also
once said that it is in Brazil's interest that
the team performs very badly in the World Cup.
In the world of sports those who wield that power
today are not the federations supposed to govern the
game but the corporate sponsors (most of them are
US companies), some of whose annual revenue is several
times the GDP of smaller nations. How can anyone,
otherwise, explain a sick Ronaldo's inclusion
in the Brazilian squad against France for the final
match of the FIFA World Cup 1998? One can, once he
is able to find corporate interest behind it.
As cited in an article by Ian P. Henry [19],
sports is no longer viewed as part of a welfare policy
pursued by the state, with the aim to make 'sport
for all' a reality. According to him, 'the
demise of the welfare philosophy of universal rights
has led to a de-emphasizing of the notion of sport
for all'. Almost in every part of the world
the promotion of individualist, rather than collectivist,
policy goals and a shift away from the universal provision
of sporting facilities are becoming increasingly evident.
The marketization of sporting services has made such
services unaffordable for the majority. This is just
one of the inherent dangers resulting from the globalization
of sports governance, alongside the no-less worrying
tendencies of corruption (doping, betting and bidding
scandals), mediatization of sports ownership and the
commodification of team loyalties.
Media barons like Murdoch have so far been successful
in making sports a globally-traded commodity. As is
evident by now, organization of sporting events in
today's world has more to do with trying to
increase profits of the sponsors through various means
like popularizing their products and trying to increase
sales of the same. No longer is popularization and
spread of the sport an intended objective. And this
the sponsors are doing with the hope of increasing
their markets and finding a way out of the recession
that is plaguing most 'advanced capitalist economies'
of the world today. The tendencies in the global sports
industry today towards concentration, specially by
the media houses (who are the most important players
in making sports globally tradable), are attempts
to beat the crisis of overproduction or underconsumption.
Mergers and acquisitions, or alliances between major
houses in the industry, are targeted towards reducing,
if not altogether eliminating, competition. The corporate
sponsorship of popular sporting events is expected
to open up new markets for the products of the sponsors.
However, the chances that the corporate houses will
be able to meet their desired objective are grim.
While the initial stages may see these transnational
companies being successful in penetrating the limited
upper-middle and elite consumers in the new markets,
greater impoverishment and greater inequality in mass
markets resulting from the layoffs and the transformation
of the work force into part-time, temporary, freelance,
and home-based workers will cut the very consumer
demand that needs to be boosted to counter overproduction.
While industry concentration and globalization of
sports might succeed in postponing the inevitable,
the inherent contradiction of global capitalism-that
of tremendous concentration of wealth among the few
at the top, severe poverty among the billions at the
bottom, and a middle stratum whose incomes are eroding
or are stagnant - will definitely make this
solution short-lived[20].
In other words, the stagnationary tendencies facing
capitalism cannot be countered without a conscious,
demand-driven policy from the forces that govern the
world economy today.
[1] Anthony Giddens
(1990): The Consequences of Modernity; Cambridge:
Polity Press
[2] David Harvey (1989): The Condition
of Postmodernity; Oxford: Basil Blackwell
[3] Both the references noted in footnotes
1 and 2 are mentioned in the article, 'The Governance
of Sport and Leisure: the roles of the Nation-State,
the European Union and the City' written by Ian P.
Henry, and available at http://fag.hit.no/af/if/kjerne/seminar_des_2001/Plenumsinnlegg_Henry.htm
[4] Boris Bergant: "Entertainment
for the Privileged? - The Economic Avalanche
of Televised Sports", available at http://www.play-the-game.org/articles/1997/1997/the_economic.html
[5] Wright, George: Globalisation
and Sport; New Political Economy, Spring 1999
[6] http://www.flonnet.com/fl1709/17090140.htm
[7] Angelo Bruscus: Money in Sports:
The empire builders; Seattle Post-Intelligencer Reporter,
June 20, 2002
[8] Angelo Bruscus: Cuban swears by
the bottom line, Seattle Post-Intelligencer Reporter,
June 20, 2002
[9] Robert Davies: Media Power and
Responsibility in Sport and Globalisation; 3rd International
Conference for Media Professionals in a Globalised
Sports World, Copenhagen, 12th November, 2002
[10] www.macduffgolf.com/article5.htm
[11] Globalisation - the human cost
http://www.heureka.clara.net/gaia/global02.htm
[12] See http://seattlepi.nwsource.com/specials/moneyinsports/sportstimeline.pdf
for details of salary hikes in US Leagues during the
last century.
[13] Amounts are average salaries
in millions of dollars.
[14] http://www.hum.au.dk/ckulturf/pages/news/news3.html
[15] http://www.macroscan.net/cur/feb03/cur210203Global_Game.htm
[16] Dan Raley: Money in Sports:
The high cost of fandom; Seattle Post-Intelligencer
Reporter, June 18, 2002
[17] NFL has an antiquated TV blackout
rule of home games that are not sold out.
[18] Mike Marqusee: Mammon at the
wicket, Frontline; Volume 17 - Issue 09, Apr. 29 -
May 12, 2000
[19] Ian P. Henry: 'The Governance
of Sport and Leisure: the roles of the Nation-State,
the European Union and the City'
[20] For a detailed discussion see
Walden Bello's No Logo: A brilliant but flawed portrait
of contemporary capitalism, A review of No Logo by
Naomi Klein in http://www.globalsolidarity.org/articles/nologo.pdf
June 05, 2003.
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