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].
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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.