An explanation of sports capitalism (first published on CNN site)

Worth a read.

From Stefan Szymanski:

http://edition.cnn.com/2014/01/24/business/davos-sports-capitalism-real-world/index.html

About John Harms

JTH is a writer, publisher, speaker, historian. He is publisher and contributing editor of The Footy Almanac and footyalmanac.com.au. He has written columns and features for numerous publications. His books include Confessions of a Thirteenth Man, Memoirs of a Mug Punter, Loose Men Everywhere, Play On, The Pearl: Steve Renouf's Story and Life As I Know It (with Michelle Payne). He appears on ABCTV's Offsiders. He can be contacted [email protected] He is married to The Handicapper and has three kids - Theo13, Anna11, Evie9. He might not be the worst putter in the world but he's in the worst three. His ambition is to lunch for Australia.

Comments

  1. Glen Potter says

    I disagree with Szymanski’s assertion that the European model of modern professional sport, in a sense, is a successful manifestation of modern capitalism alongside the American model. Fancy supporting an EPL side that wasn’t Man. Utd., Man. City, Chelsea, Liverpool, Arsenal??? Not on your nelly. No way! You’re destined to be an also-ran. Where is the hope? I’ve always felt this EPL example of large monopolising teams v. the rest, was reflective of its own society passively accepting its own social hierarchy. It mimmicks the class system in life. You’re either born to rule or you’re the ‘great unwashed’. The socialist model adopted by the AFL softens our own social positioning and we embrace the attempt at equalisation. As an AFL follower, I feel incredulous toward the lop-sided, European model and don’t see the sense. I can’t fathom how the English soccer supporters who follow minnow clubs sustain the interest. Is it purely because they love their sport? Do they not have anything else in life to take up their interest? If I just happened to be born in Scunthorpe, and soccer was the pre-dominant winter code, I’d probably go along to local games due to indoctrination and a love of sport, but there’d be something uneasy about the promotion/relegation model used to govern and manage my sport, knowing that it was highly improbable in life that my team would indeed make the big stage, and if they did, at what compromise of integrity is made? What compromise is made by a promoted League One team entering the Premier League? I don’t know but I’ll bet there’d be all sorts of posturing, manouvering and changes made that wouldn’t sit well with me, so leave me out of that. The European (soccer) model doesn’t just apply to the EPL, I’m sure it does for all the other Euro soccer leagues. Someone else can enlighten me otherwise. Regardless the model is highly flawed and nonsensical.

    Let’s bring the point back to the AFL as an example. If the (quasi-socialist model) draft, salary cap and nationalised competition wasn’t brought in through the 80s, what would an alternate VFL/SANFL/WAFL look like now? Would we have the big teams continually dominating? As a Victorian, I feel I could safely say yes. Followers of Collingwood, Carlton, Essendon, probably Hawthorn and possibly Richmond, would be the only supporters not taking in the Ascot Vale Stakes at Flemington in the first week of September. Would we have established and sustained the large memberships we have now? Maybe. Possibly due to exponential population growth. But would we have a Footscray at all? St. Kilda? North Melbourne? If we didn’t have the vision of Allen Aylett and Jack Hamilton, would we have gone down a promotion/relegation model with the VFA teams? I’m thankful that hasn’t happened. The current AFL model has got it right to some point. Inhibitors have been expansion and the consequent compromises; and most certainly the unequal supporter bases, which now expose unfortunate flaws such as how clubs like Collingwood – whose strangehold on membership numbers was borne out of historical VFL successes – can now enjoy the fiscal benefits to excessively resource their own support-staff departments. Can the Bulldogs, Kangaroos and Saints gloat about anything near near the quality of a Westpac Centre? The aforementioned Collingwood point also applies to Carlton, Essesndon and Hawthorn, who benefit excessively from membership numbers. As for the Cats, well they just beat the system and did it ‘purrfectly’.

    Just a few thoughts. Anyhow, happy New Socialist Republic of Australia Day!

    Glen

  2. Have to agree, Glen, and I’m saying that as a long-term supporter of one of the aforementioned EPL heavyweight clubs – Liverpool. Even at their exalted level, the red-in-tooth-and-claw capitalist model of European football has them seemingly perennially destined to finish some between 3rd and 6th in the League, never quite able to assemble (i.e afford) the depth and quality to go that next step. Some Middle Eastern billionaire may buy the Reds and achieve the transformation that’s occurred at Manchester City, but as you say, Glen, at what cost to integrity?

    I also agree with your point about the seemingly passive acceptance of this state of affairs among the supporters of lesser clubs. Despite my recent rant about my lack of real colour and passion in professional sport, one player who has been giving me great joy this season is Luis Suarez, a classic example of a flawed genius that opponents love to hate. Whatever you think of Suarez and his chequered track record, no-one could doubt his sublime skills and his infectious exuberance. With Suarez up forward, Liverpool has a talent who can challenge any opponent. He recently signed a four year deal which should keep him at Anfield through the prime of his career. And yet I hear the supporter base sigh with resignation that it’s only a matter of time before one of the really big European clubs blows that contract out of the water, and that if Liverpool fails to return to European football next season, Suarez will be only too happy to move on. I find it very sad that good (but not great) clubs seem incapable of hanging onto marquee players like Suarez who could enable them to get to the next level, instead willingly accepting the fat transfer fee and usually squandering it on a bunch of also-rans.

    I’m sure the American and Australian models have their flaws, but they clearly allow for greater opportunity for success among all teams and the rather quaint notion that a smart club can assemble a title-winning team through astute judgement rather than a giant chequebook.

  3. Malcolm Ashwood says

    Guys I too hate Soccer in that very few clubs can win the title each year but do not forget the stupidity of the AFL to not have it’s own reserves competition it’s attitude and arrogance has ruined the VFl , WAFL and now this year the SANFL

  4. Glen Potter says

    Stainless – I adopted the Reds as my ‘team’ back in the 80s for no other reason than I love The Beatles. I’m merely a moderate supporter but have to agree with on Suarez – a breath of fresh air.
    Malcolm – On the subject of state-based Australian Rules, there’s been a concerted push from Victorian AFL clubs with VFL affiliation to move away from alignment with an (old VFA) club to having a stand alone ‘reserves’ team in the VFL in recent years. Geelong maintained their stand-alone VFL status from the start but part of their VFL success has been a catalyst for Collingwood (formerly with Williamstown) to go it alone, just as Essendon (Bendigo), Western Bulldogs/Footscray (Williamstown and Werribee). Old VFA clubs like Coburg (formerly with Richmond) and Frankston (alone) are nowhere near cashed-up as most teams and I fear for their future in the VFL as they desperately need AFL-club alignment. I’m not sure how Port Melbourne, Williamstown and Sandringham will survive in the long-term (not wanting to sound alarmist).
    How do the SANFL clubs cope, Malcolm? How regulated is the SANFL in relation to salary caps? Are there power clubs, destined to stay on top? Are there struggling clubs who are destined never to succeed and have cloudy futures?

  5. Malcolm Ashwood says

    Glen my beef is you can’t have clubs playing in the same comp with different agendas
    Crows ( develop the player trying to get them ready to play AFL footy ) v Norwood
    ( winning the game ) it has ruined the other state comps . In The good old days when you went to watch the ressies kick the dew off the grass we were all on the same page
    Development in the magoos, win the league game
    Norwood have been the dominant team in the last 2 yrs but with all the players drafted are expected to come back to the field . There is a salary cap and clubs have been punished for breaches . No club is a financial powerhouse to my knowledge
    Give us a National res comp !

  6. Interesting article and comments. As a much younger man I actually read Adam Smith’s “Wealth of Nations” – often cited as the capitalist manifesto.
    Smith was an idealist libertarian who believed that free markets were the best way of optimising wealth and well-being for the common man.
    He railed against ‘mercantilism’ under which restricted entry/artificial scarcity/concentrated market power delivered unreasonable wealth to the big business owners – who maintained power by sucking up to/manipulating governments.
    That is what the big US sporting owners do; and what the AFL clubs are doing now with their evil pokies revenue/destruction of state comps/ and coaching arms race based around their unregulated off-field budgets.
    For all those flaws its comparatively regulated environment and relatively even playing field appeals much more than the open slather free market of European soccer. What the AFL really needs is an AFL Commission that is genuinely committed to the WELFARE of the game and not just the INCOME of the game. I’m not holding my breath, but it has cosied up to commercial interests far too much under Demetriou’s regime.
    The facts in the Szymanski piece that I found most interesting were how unprofitable European football is compared to the US. Of course this is what Adam Smith exactly argued – that competition would bid down profits and prices to marginally above the cost of production. But what the real world of complex modern capitalism shows is that the simple theoretical models of economists founder under the web of transfer pricing and artificial capital overheads.
    As the fruit growing industry and SPC Ardmona head to the bottom of the cliff (as an insignificant element of the Coca Cola Amatil monolith) I look forward to the ACCC and Tony Abbott reassuring us that “having created a demand the parachutes will shortly appear.”
    In the companion article on CNN
    http://edition.cnn.com/2012/08/23/sport/football/football-financial-fair-play-trabzonspor/index.html
    they discuss the “Financial Fair Play” rules attempting to put some constraints around the uneven playing field of big club domination. The difficulty is how do you define the boundaries of a corporatized ‘football’ club? A Turkish club with a civil engineering wealthy Chairman is building a hydro electric plant to guarantee it the income to buy top players and not have its expenditure exceed its revenue (as required under the new ECC rules).
    As my political mentor always told me:
    “Freedom for the pike is death for the minnow” (RH Tawney).
    The AFL structure is sound – it just needs a commission that puts common interest before self interest.

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