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Liverpool and the IAAF: two sporting victories for the mad as hell

February 11, 2016

Olympics 2

Two smallish news items on the back pages of today’s UK newspapers might not seem immensely significant against a backdrop of financial instability in China, the battles raging in the Middle East and the prospect of a narcissistic property developer entering the White House.

But the stories about Liverpool Football Club’s owners bowing to supporter protests over ticket prices, and Nestlé’s decision to terminate its sponsorship of IAAF, the international athletics governing body, are evidence of two very different sets of customers saying “we’re mad as hell, and we’re not going to take it any more”.

In Liverpool’s case the decision to raise ticket prices for an upgraded section of the stadium would seem perfectly logical from a business standpoint: I offer you better facilities, you pay more money. Whether the club’s owners factored a tipping point into their equation – the possibility that customers in a city that has been struggling economically over the past half century might vote with their feet – is known only to them.

But the football business isn’t driven exclusively by logic. It’s vulnerable to the emotions of its customers who don’t see the objects of their support as businesses at all. Fenway Sports Group, who own Liverpool, are smarter than most, as witness their acknowledgement of the mystical element of the game, when they referred to “the unique and sacred relationship between Liverpool Football Club and its supporters” in the climb-down announcement.

It would be hard to imagine Apple reducing the price of the IPhone 7 in the face of customer pushback and citing as a reason that it was mindful of the sacred bond between itself and its users.

Liverpool could recoup the £4 million shortfall in its planned annual revenue by buying a star player less or selling another, so the impact in the context of elite football’s bloated economics will be minimal. But I’m one of those who firmly believe that your relationship with your customers is often better strengthened by the way you recover from a mistake than by making no mistakes at all. So Fenway – if they’re as smart as I think they are – will have learned from the mistake and come out smelling of roses.

Whether their gesture will provide a lesson for owners of other clubs remains to be seen. I suspect that the corporate owners will take note, whereas the wannabe Donald Trumps who use their clubs as flagships for their personal prestige might consider that to back down in the same manner would constitute an unacceptable loss of face. Vincent Tan, owner of Cardiff City, would probably be one of those. Here’s a previous post about Mr Tan and other autocratic football owners.

Be that as it may, club owners need no reminding that there’s a delicate balance to be struck in keeping fans onside while trying to run their businesses on principles recognised by the London School of Economics and the Harvard Business School. Though perhaps gate receipts are less critical in an age of monstrous television fees, Liverpool’s retreat might make a few potential investors think twice before taking on a sports franchise in the United Kingdom. And this could have a knock-on effect on valuations for owners looking to make an exit – those of Everton and Aston Villa, for example. A downturn awaits?

The other decision is that of Nestlé to pull out of its sponsorship deal with the IAAF. It’s doing so because it believes that the organization’s failure to deal with doping and financial corruption is damaging its brand. Nestlé funds the organisation’s children’s programme. Its decision comes hot on the heels of Adidas, which has cancelled a far more valuable sponsorship deal. Sebastian Coe, the IAAF’s president, reacted with predictable anger. Compared to the Adidas deal, Nestlé’s support is relatively small beer. But the withdrawal of two big-name sponsors does not bode well.

And so it shouldn’t. Millions of pious and angry words have been spoken over the past couple of decades about unfair completion through the use of performance-enhancing drugs. Yet still the IAAF has failed to come to grips with the problem. Under Coe’s predecessor, corruption, a type of cheating better known within FIFA, football’s governing body, has also taken hold.

Is it not a sign of our times that in two sports that lift the spirits of those who follow and take part in them, money seems to be trickling up as fast as it’s trickling down?

Most of the sports administrators who have enriched themselves seem to be pretty insignificant figures on the global stage – tin-pot emperors in their little fiefdoms. Few if any of them have made it to the top of any rich list, and most probably won’t, because such prominence would quickly lead to questions about their new-found wealth. Instead they hide their gains under the banking equivalent of the mattress.

So we’re not talking here about a major contribution to the polarisation of societies between very rich and the very poor. But what we are talking about is the same uneasy relationship between business and sport that so often alienates football fans – a sense that the underlying joy of sporting competition is being taken away from them.

While it’s true that the serious money is to be made from major competitions and by the relatively few high performers whose prowess attracts the TV dollars, it’s surely depressing for all who take part in and follow athletics to know that to find international success you must dope, and that no high-level competitive sport, be it tennis, cricket, football or running, is immune to match-fixing. And that therefore no result can unequivocally be considered clean. And if that’s not bad enough, that so many of those entrusted with the well-being of sport are quietly growing fat on the proceeds of shady deals.

All of which suggests that although we still need governing bodies for international sport, there are some, IAAF and FIFA being prominent examples, that are not fit for purpose. They should be taken down. Disbanded. Not reorganised, but re-built.

That doesn’t mean that the good stuff they do should be shut down and thrown away. But the structures that protect the corrupt and prolong the tenure of the powerful should be done away with. Those who lose their jobs in the process should be invited to apply for new ones, but subject to new rules and new standards of transparency. In other words, no more jobs for the boys. No more Sepp Blatters.

The problem is, as the Roman poet Juvenal said, quis custodiet ipsos custodes? Who guards the guardians? For most sports, it’s the supporters and the sponsors. In the case of FIFA, it seems, it’s the FBI.

I’m one of billions who both take part in sport and watch others doing so. I don’t have much in common with kids from impoverished communities in Ethiopia, Brazil and Cambodia. But if I mention the names of Messi and Ronaldo, and even good old Wayne Rooney, the light of recognition shines through linguistic, cultural and economic barriers just about everywhere in the world.

That’s one of the glories of sport. It transcends barriers. So I congratulate the Liverpool fans and, whatever their self-interested reasons, Adidas and Nestlé, for taking a stand against those who have forgotten that sport is a common denominator  for humanity before it’s a business. And I only wish that the companies that fund FIFA would do the same as IAAF’s sponsors instead of just talking about it.

Every house needs a spring clean from time to time. Some need demolishing. For FIFA, IAAF and one or two others of that ilk, time is running out for them to sort themselves out before someone else does it for them.

From → Business, Social, Sport, UK

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