Grant Wahl, a senior writer for Sports Illustrated and SI.com, has put his name in the hat for the position of President of FIFA. The elections will be held on June 1. Wahl is campaigning behind the promise of sweeping reforms to the FIFA Executive Committee; using the momentum of recent allegations of corruption by The Sunday Times in the UK to drive support for his election. Even though it is a somewhat unexpected announcement, it is very possible he could successfully restore credibility to an organization that desperately to perform damage control on its tarnished image.
The only other opposition current lame duck president Sepp Blatter faces is the president of Asia's Football Federation, Mohamed Bin Hammam of Qatar. I think the Cleveland Cavaliers will win the NBA Championship before Mr. Hammam makes any substantial progress reforming the system.
Wahl's proposed changes include implementing instant replay for calls on the goal line, restructuring the system for referee selections so it is based on merit, and eliminating "stupid yellow cards" for celebrations such as removing your jersey.
His most substantial reform proposals include a term limit for the president (there have been 2 in 37 years), the appointment of women to prominent roles on the committee (All 27 are men at the moment), and revealing past financial records and confidential documents. He plans on "going Wikileaks on FIFA".
The biggest hurdle will be for Mr. Wahl to have a country nominate him as a candidate, a requirement to be on the ballot. No one else is taking action and challenging Sepp Blatter and FIFA as a governing body. Grant Wahl has covered 5 World Cups, and is aware of the glaring black eye that FIFA has as a professional organization. I believe FIFA needs Grant Wahl to make the changes no one else is willing to make.
Here are the links to an article announcing his candidacy and a campaign video:
Official Announcement:
http://bit.ly/hVmEw4
Campaign Video:
http://bit.ly/dJomg5
If you want to offer your support and help make Grant Wahl's candidacy gain a following on Twitter and Facebook, and make his nomination official, here are those links:
Grant Wahl's Twitter:
http://twitter.com/GrantWahl
Petition on Twitter for his candidacy:
http://bit.ly/eAf1ME
Facebook Page:
http://on.fb.me/hZYvds
Thursday, February 17, 2011
Thursday, February 10, 2011
With a Lockout Looming: Will There be a NFL Football Season in 2011?
March 3rd, 2011 is "D-Day", so to speak, for the NFL Players Association and the owners to hammer out an acceptable Collective Bargaining Agreement. That is not to say all hope is lost if both sides haven't reached an agreement by then, but it would be an uphill battle to make the 2011 NFL season a reality at that point.
There are 3 major issues that the players and owners disagree on after their most recent discussions Wednesday, February 9, 2011.
1. The owners are asking for changes to be made to the current revenue sharing agreement. Initially reports were that the owners were demanding a $2.4 billion credit be taken from the pool of total revenue each year for costs related to stadium renovation and other business operating costs.
Currently, the credit stands at $1 billion before the revenue is split 60% to the players and 40% to the owners.
The players didn't go for that. They have had the same deal in place since 2006, the owners opted out of that deal, and because the owners aren't releasing all of the financial documents for each franchise, the NFLPA isn't buying the business cost explanation the owners are selling. The owners say they have provided the necessary information to make an informed decision, and that the other paperwork and financial data is irrelevant to the decision at hand.
Wednesday things took a turn for the worst between the sides. The owners walked away from the bargaining table, and canceled a meeting set for today, as well as an owners meeting set for next Tuesday. The major issue? The players proposed a 50/50 split with no credit or requirement for full disclosure of financial records, and the owners aren't budging on their demands for a credit.
The owners proposed $2.4 billion credit would essentially leave the split between owners and players at close to 60/40 of total revenue. A huge shift in compensation for the players.
If I'm the NFLPA, I stick to my guns at this point. If the owners won't provide them all financial documents for each team to be reviewed, it is irresponsible to accept a nearly 20% decrease in revenue. This clearly doesn't bode well for an agreement by the March 3rd deadline.
As soon as the deadline passes, the owners are estimated to lose $120 million in revenue due to expiring sponsorship contracts. If this drags out to September, and impacts the 2011 season, the number may climb to $1 billion.
2. The second issue at hand is the owners' proposal to expand the season to 18 games. Truthfully, I would love to see this happen; if I didn't have a conscience, or justified concern for the players safety. The effects that football has on the players involved, especially long term, are serious and need to be taken into consideration. See Chris Henry or William "The Refrigerator" Perry. They are undeniable, and if you want to be shallow and consider it solely from a business standpoint; they are costly for the teams as well. Apparently not costly enough to offset the revenue generated by two additional regular season games.
And still NFLPA DeMaurice Smith hasn't said this would be a dealbreaker. It would just likely require more compensation and less time participating in "mandatory workouts" during the off season.
Sounds reasonable enough from the outside looking in.
3. The third major issue holding up an agreement, but by far the least troublesome, is the implementation of an adjusted rookie wage scale. Both sides agree a new compensation structure needs to be in place for rookies, but there is no agreement to this point on how that should be set up. The NFLPA has conceded a cap on incentives that would reduce the amount rookies are paid with the savings being passed to veterans. The owners have crafted a counter proposal that would require first round picks to sign 5 year contracts at a reduced salary (QBs in the first round have to sign 6 year deals), and picks from rounds 2-7 have to sign 4 year contracts at reduced pay. Ultimately, this is the issue both sides are closest on, and at the same time it can't be resolved completely until a revenue sharing agreement is reached.
It does seem to be the so-called 11th hour for Cinderella. I'm not holding my breath for a 2011 season. It is tough to see a valid reason for the owners' demanding a significantly larger piece of the pie. In the end, it is their responsibility to prove the need for the additional $1.4 billion credit for business operations by providing their individual team's financial information.
If progress isn't made soon, the damage done to the relationship between the fans and the league will likely be long term and severe.
- NLW
There are 3 major issues that the players and owners disagree on after their most recent discussions Wednesday, February 9, 2011.
1. The owners are asking for changes to be made to the current revenue sharing agreement. Initially reports were that the owners were demanding a $2.4 billion credit be taken from the pool of total revenue each year for costs related to stadium renovation and other business operating costs.
Currently, the credit stands at $1 billion before the revenue is split 60% to the players and 40% to the owners.
The players didn't go for that. They have had the same deal in place since 2006, the owners opted out of that deal, and because the owners aren't releasing all of the financial documents for each franchise, the NFLPA isn't buying the business cost explanation the owners are selling. The owners say they have provided the necessary information to make an informed decision, and that the other paperwork and financial data is irrelevant to the decision at hand.
Wednesday things took a turn for the worst between the sides. The owners walked away from the bargaining table, and canceled a meeting set for today, as well as an owners meeting set for next Tuesday. The major issue? The players proposed a 50/50 split with no credit or requirement for full disclosure of financial records, and the owners aren't budging on their demands for a credit.
The owners proposed $2.4 billion credit would essentially leave the split between owners and players at close to 60/40 of total revenue. A huge shift in compensation for the players.
If I'm the NFLPA, I stick to my guns at this point. If the owners won't provide them all financial documents for each team to be reviewed, it is irresponsible to accept a nearly 20% decrease in revenue. This clearly doesn't bode well for an agreement by the March 3rd deadline.
As soon as the deadline passes, the owners are estimated to lose $120 million in revenue due to expiring sponsorship contracts. If this drags out to September, and impacts the 2011 season, the number may climb to $1 billion.
2. The second issue at hand is the owners' proposal to expand the season to 18 games. Truthfully, I would love to see this happen; if I didn't have a conscience, or justified concern for the players safety. The effects that football has on the players involved, especially long term, are serious and need to be taken into consideration. See Chris Henry or William "The Refrigerator" Perry. They are undeniable, and if you want to be shallow and consider it solely from a business standpoint; they are costly for the teams as well. Apparently not costly enough to offset the revenue generated by two additional regular season games.
And still NFLPA DeMaurice Smith hasn't said this would be a dealbreaker. It would just likely require more compensation and less time participating in "mandatory workouts" during the off season.
Sounds reasonable enough from the outside looking in.
3. The third major issue holding up an agreement, but by far the least troublesome, is the implementation of an adjusted rookie wage scale. Both sides agree a new compensation structure needs to be in place for rookies, but there is no agreement to this point on how that should be set up. The NFLPA has conceded a cap on incentives that would reduce the amount rookies are paid with the savings being passed to veterans. The owners have crafted a counter proposal that would require first round picks to sign 5 year contracts at a reduced salary (QBs in the first round have to sign 6 year deals), and picks from rounds 2-7 have to sign 4 year contracts at reduced pay. Ultimately, this is the issue both sides are closest on, and at the same time it can't be resolved completely until a revenue sharing agreement is reached.
It does seem to be the so-called 11th hour for Cinderella. I'm not holding my breath for a 2011 season. It is tough to see a valid reason for the owners' demanding a significantly larger piece of the pie. In the end, it is their responsibility to prove the need for the additional $1.4 billion credit for business operations by providing their individual team's financial information.
If progress isn't made soon, the damage done to the relationship between the fans and the league will likely be long term and severe.
- NLW
Wednesday, February 2, 2011
Critique of the World Cup Host Selection for 2018 and 2022 World Cups
In the final article of my 3 part series looking at FIFA and the World Cup Host Selection Process, I will analyze FIFA's choice to have Russia and Qatar host the 2018 and 2022 World Cups respectively. Specifically, I will look at the individual merits for the perceived front runners for hosting the tournament for each year, as well as give my thoughts on why Russia and Qatar ended up getting the nod over the other candidates.
2018 World Cup
Countries on the ballot:
Belgium/Netherlands
England
Portugal/Spain
Russia*
Out of the 4 bids for the 2018 World Cup, it was widely considered to be between England and Russia for the right to host the football championships.
Belgium/Netherlands were unlikely from the start. Between the joint bid, the fact they hosted the Euro 2000 tournament, and FIFA expressing concerns about the necessary government cooperation to host a successful tournament; it seemed a longshot from the start.
England went into voting as one of the favorites to host the 2018 World Cup. It is the birthplace of modern football. The bid was led by famous public ambassadors such as Prime Minister David Cameron, Prince William, and, of course, David Beckham. Much of the infrastructure necessary to host the World Cup is already in place, and the country hadn't hosted the event since 1966
Portugal/Spain was hurt by accusations of an alliance with Qatar in a deal to trade votes for the Middle Eastern country's support. Russian Sports Minister Vitaly Mutko openly criticized the agreement in an apparent act of gamesmanship. Cristiano Ronaldo ended up not attending the announcement. Not to mention the region isn't exactly thriving financially with concerns about the countries' rapidly expanding national debt. Ultimately, they were unlikely to win from the start, and didn't appear to attempt to dispel this foregone conclusion through additional lobbying.
Russia was a favorite under the premise that FIFA is actively trying to spread the game to all corners of the world. It also benefited from its successful bid to host the 2014 Winter Olympics in Sochi, demonstrating confidence in the country's ability to host major international sporting events. Money isn't a problem for major bureaucrats who are willing to pony up the funds, an estimated $3.82 billion, which is the largest amongst the 4 candidate bids. The decision by Vladimir Putin to not attend the ceremony in Zurich, which he indirectly credited to "the unscrupulous actions of the British media", concerns about racism and corruption in Russia, and the lowest projected ticket allotment were the only considerable obstacles to a successful bid.
2022 World Cup
Countries on the ballot:
Australia
Japan/South Korea
Qatar*
United States
Australia was considered the dark horse pick for the 2022 World Cup. The country hosted a successful Summer Olympics in 2000, and the majority of the stadiums that would be used for matches are already built within the major cities. The major argument against their bid was the time zone difference effecting television viewership in the United States and Europe. I disagree with this assertion simply because ratings weren't severely impacted during the 2002 World Cup in Japan/South Korea which shares a very similar time zone; although I personally would watch fewer games for this reason.
Japan/South Korea hosted the event in 2002. For this reason I don't think either country had a chance to host the World Cup in 2022. It was simply too soon, and I believe the next host from Asia will be China or India due to their growth potential.
Qatar was considered a legitimate candidate to host the FIFA World Cup in 2022 pretty much from the outset. Not only does the country have an outrageous amount of money to invest in the tournament; it would promote FIFA's self-proclaimed "vision" of bringing football to all corners of the earth (see Russia above), and the first in the Middle-East. At the same time, there are clearly many drawbacks to hosting the event in Qatar. First, the average temperature in the summer is around 106 degrees Fahrenheit in June/July, and can reach 120 degrees Fahrenheit. The proposed remedy to this issue, air conditioned stadiums, certainly wouldn't be good for the environment, another aspect FIFA claims to take into consideration when looking at bid proposals. The fact that the country is slightly smaller than the state of Connecticut isn't appealing either, and the city where the final is proposed to be played doesn't currently exist. I could list more concerns, but I digress...
The United States had a simple case to make to host the World Cup in 2022. All of the stadiums that would be used are in place with nothing more than minor renovations necessary. The official bid cited 18 venues in 18 cities, and that is high-balling the actual number that would be used. The estimated number of tickets that would be put on sale for the World Cup in the United States was 4,957,000. That number was 42% more than Qatar is predicted to provide, and over a million more than any of the countries bidding for the 2018 or 2022 World Cup estimated selling. The argument against having it in the United States is the potential for terrorist attacks or violence, and then the rest of the world hating America/Americans. I make the latter argument, tongue-in-cheek. These two points are quickly offset by the fact that Bill "Slick Willie" Clinton was one of our ambassadors.
Host of 2018 World Cup: Russia
FIFA Executive Committee were caught on camera agreeing to sell their World Cup votes, one in exchange for £500,000, the equivalent of about $800,000, and the other for payment "to finance a sports academy". The officials involved were the Nigerian executive committee member and the president of the Oceania Football Confederation respectively, and the report was openly condemned by a lobbyist for Russia's bid, as well as the president of the Asian Football Confederation (Qatar). Then on November 29th, the Panorama current news program on BBC ran a segment alleging 3 senior FIFA officials, all with votes in the 2018 and 2022 World Cup Host Selection, accepted bribes from a sports marketing firm in the 1990's in exchange for World Cup rights.
This was the nail in England's proverbial coffin.
Putin not showing up to accept the decision on Russia's behalf was more likely a tactical move, a public demonstration of Russia's growing international influence and arrogance, than him conceding defeat in their bid proposal.
Host of 2022 World Cup: Qatar
Admittedly, I am slightly biased in regards to this decision. At the same time, I can't find one good reason for why Qatar was chosen to host the World Cup in 2022. Advocating the spread of football to all corners of the earth doesn't hold weight in this instance because Australia/Oceania has never hosted a World Cup either. Maybe in the case of the 2018 decision advocating the promotion of the game is an acceptable explanation, but not when there are 2 other viable candidates, the U.S.A and Australia, who have established infrastructure in place and a track record of success hosting international sports competitions.
The fact that Qatar's football team, currently ranked 90th in the world, will automatically qualify for the 2022 World Cup is unfortunate. They have never qualified for the tournament in its existence, and it will likely be an embarrassing showing for their team. I realize Qatar/Middle Eastern culture is different than in the United States, but if the U.S. men's national team got destroyed on its own turf it would likely erase any interest and forward progress previously made in legitimizing football in the country. Since this is a likely scenario for Qatar, I would argue that this is not the best way to spread the game to that region.
In my opinion, Qatar was chosen because of the estimated $65 billion dollars they plan on investing over the next 11 years on building the stadiums, hotels, and the city where the World Cup Final will be hosted. This will be good for the Middle Eastern economies in the near future, and will certainly continue to provide jobs in the region up to the 2022 tournament. Yet, I don't see any sustainable positive economic effects from the event after its conclusion. Apparently the organizers don't either since they are planning on dismantling many of the stadiums that will be used and shipping off seats and other parts to less fortunate countries for use there. While this is a nice gesture, this is tough to justify, especially in light of the recent world economic environment.
In the end, I hope that Qatar is able to host a successful World Cup in 2022, but they clearly have their work cut out for them over the next 11 years. Ultimately, I think that the United States or Australia would have been much better choices, but the key to that statement is "I think" and in reality, "money talks".
-NLW
Afterthoughts:
My next article will take a closer look at the potential for a lockout in the NFL next season, and the economics behind the current deadlock between players and owners.
I also hope to be able to post with a little more frequency for the foreseeable future. I have been in the midst of juggling a few projects professionally over the past month, and I recently freed up a little extra time by postponing my involvement in one of them. I look forward to getting back to writing on issues that interest me, and providing a look into the reach of money within athletics at all levels.
2018 World Cup
Countries on the ballot:
Belgium/Netherlands
England
Portugal/Spain
Russia*
Out of the 4 bids for the 2018 World Cup, it was widely considered to be between England and Russia for the right to host the football championships.
Belgium/Netherlands were unlikely from the start. Between the joint bid, the fact they hosted the Euro 2000 tournament, and FIFA expressing concerns about the necessary government cooperation to host a successful tournament; it seemed a longshot from the start.
England went into voting as one of the favorites to host the 2018 World Cup. It is the birthplace of modern football. The bid was led by famous public ambassadors such as Prime Minister David Cameron, Prince William, and, of course, David Beckham. Much of the infrastructure necessary to host the World Cup is already in place, and the country hadn't hosted the event since 1966
Portugal/Spain was hurt by accusations of an alliance with Qatar in a deal to trade votes for the Middle Eastern country's support. Russian Sports Minister Vitaly Mutko openly criticized the agreement in an apparent act of gamesmanship. Cristiano Ronaldo ended up not attending the announcement. Not to mention the region isn't exactly thriving financially with concerns about the countries' rapidly expanding national debt. Ultimately, they were unlikely to win from the start, and didn't appear to attempt to dispel this foregone conclusion through additional lobbying.
Russia was a favorite under the premise that FIFA is actively trying to spread the game to all corners of the world. It also benefited from its successful bid to host the 2014 Winter Olympics in Sochi, demonstrating confidence in the country's ability to host major international sporting events. Money isn't a problem for major bureaucrats who are willing to pony up the funds, an estimated $3.82 billion, which is the largest amongst the 4 candidate bids. The decision by Vladimir Putin to not attend the ceremony in Zurich, which he indirectly credited to "the unscrupulous actions of the British media", concerns about racism and corruption in Russia, and the lowest projected ticket allotment were the only considerable obstacles to a successful bid.
2022 World Cup
Countries on the ballot:
Australia
Japan/South Korea
Qatar*
United States
Australia was considered the dark horse pick for the 2022 World Cup. The country hosted a successful Summer Olympics in 2000, and the majority of the stadiums that would be used for matches are already built within the major cities. The major argument against their bid was the time zone difference effecting television viewership in the United States and Europe. I disagree with this assertion simply because ratings weren't severely impacted during the 2002 World Cup in Japan/South Korea which shares a very similar time zone; although I personally would watch fewer games for this reason.
Japan/South Korea hosted the event in 2002. For this reason I don't think either country had a chance to host the World Cup in 2022. It was simply too soon, and I believe the next host from Asia will be China or India due to their growth potential.
Qatar was considered a legitimate candidate to host the FIFA World Cup in 2022 pretty much from the outset. Not only does the country have an outrageous amount of money to invest in the tournament; it would promote FIFA's self-proclaimed "vision" of bringing football to all corners of the earth (see Russia above), and the first in the Middle-East. At the same time, there are clearly many drawbacks to hosting the event in Qatar. First, the average temperature in the summer is around 106 degrees Fahrenheit in June/July, and can reach 120 degrees Fahrenheit. The proposed remedy to this issue, air conditioned stadiums, certainly wouldn't be good for the environment, another aspect FIFA claims to take into consideration when looking at bid proposals. The fact that the country is slightly smaller than the state of Connecticut isn't appealing either, and the city where the final is proposed to be played doesn't currently exist. I could list more concerns, but I digress...
The United States had a simple case to make to host the World Cup in 2022. All of the stadiums that would be used are in place with nothing more than minor renovations necessary. The official bid cited 18 venues in 18 cities, and that is high-balling the actual number that would be used. The estimated number of tickets that would be put on sale for the World Cup in the United States was 4,957,000. That number was 42% more than Qatar is predicted to provide, and over a million more than any of the countries bidding for the 2018 or 2022 World Cup estimated selling. The argument against having it in the United States is the potential for terrorist attacks or violence, and then the rest of the world hating America/Americans. I make the latter argument, tongue-in-cheek. These two points are quickly offset by the fact that Bill "Slick Willie" Clinton was one of our ambassadors.
Host of 2018 World Cup: Russia
FIFA Executive Committee were caught on camera agreeing to sell their World Cup votes, one in exchange for £500,000, the equivalent of about $800,000, and the other for payment "to finance a sports academy". The officials involved were the Nigerian executive committee member and the president of the Oceania Football Confederation respectively, and the report was openly condemned by a lobbyist for Russia's bid, as well as the president of the Asian Football Confederation (Qatar). Then on November 29th, the Panorama current news program on BBC ran a segment alleging 3 senior FIFA officials, all with votes in the 2018 and 2022 World Cup Host Selection, accepted bribes from a sports marketing firm in the 1990's in exchange for World Cup rights.
This was the nail in England's proverbial coffin.
Putin not showing up to accept the decision on Russia's behalf was more likely a tactical move, a public demonstration of Russia's growing international influence and arrogance, than him conceding defeat in their bid proposal.
Host of 2022 World Cup: Qatar
Admittedly, I am slightly biased in regards to this decision. At the same time, I can't find one good reason for why Qatar was chosen to host the World Cup in 2022. Advocating the spread of football to all corners of the earth doesn't hold weight in this instance because Australia/Oceania has never hosted a World Cup either. Maybe in the case of the 2018 decision advocating the promotion of the game is an acceptable explanation, but not when there are 2 other viable candidates, the U.S.A and Australia, who have established infrastructure in place and a track record of success hosting international sports competitions.
The fact that Qatar's football team, currently ranked 90th in the world, will automatically qualify for the 2022 World Cup is unfortunate. They have never qualified for the tournament in its existence, and it will likely be an embarrassing showing for their team. I realize Qatar/Middle Eastern culture is different than in the United States, but if the U.S. men's national team got destroyed on its own turf it would likely erase any interest and forward progress previously made in legitimizing football in the country. Since this is a likely scenario for Qatar, I would argue that this is not the best way to spread the game to that region.
In my opinion, Qatar was chosen because of the estimated $65 billion dollars they plan on investing over the next 11 years on building the stadiums, hotels, and the city where the World Cup Final will be hosted. This will be good for the Middle Eastern economies in the near future, and will certainly continue to provide jobs in the region up to the 2022 tournament. Yet, I don't see any sustainable positive economic effects from the event after its conclusion. Apparently the organizers don't either since they are planning on dismantling many of the stadiums that will be used and shipping off seats and other parts to less fortunate countries for use there. While this is a nice gesture, this is tough to justify, especially in light of the recent world economic environment.
In the end, I hope that Qatar is able to host a successful World Cup in 2022, but they clearly have their work cut out for them over the next 11 years. Ultimately, I think that the United States or Australia would have been much better choices, but the key to that statement is "I think" and in reality, "money talks".
-NLW
Afterthoughts:
My next article will take a closer look at the potential for a lockout in the NFL next season, and the economics behind the current deadlock between players and owners.
I also hope to be able to post with a little more frequency for the foreseeable future. I have been in the midst of juggling a few projects professionally over the past month, and I recently freed up a little extra time by postponing my involvement in one of them. I look forward to getting back to writing on issues that interest me, and providing a look into the reach of money within athletics at all levels.
Wednesday, January 12, 2011
The FIFA Host Selection Agreement: The Legal Framework of a Monopoly
In part 2 of my 3 part series on FIFA, the world football organization, I will take a closer look at some of the concessions countries make in order to be considered to host the World Cup. The absence of alternative supervisory bodies for the sport allows for FIFA to siphon the majority of revenue from the lucrative competition unabated, and leaves host countries with tourist activity as the major source of positive impact on their national balance sheet.
The source of FIFA's control of the cash flow brought in by the World Cup is the FIFA Host Selection Agreement. In the introduction, the agreement states that FIFA has ultimate authority in the manner in which the competition is staged and organized. The organization founded the World Cup, and as the governing body of the sport it should oversee the successful execution of the tournament.
If you invent the game, inherently you have an obligation to organize and administer related competitions.
The opportunity to exploit the tournament and the countries hosting it for its personal benefit arises in the next sentence of the introduction when it states, "FIFA exclusively and solely owns and controls on a world-wide basis any and all Media Rights, Marketing Rights, Intellectual Property Rights and all other commercial or other rights and opportunities."
I am not a lawyer, nor have I studied law extensively, but I would wager this statement alone would allow for FIFA to control the majority of revenue sources made available by the World Cup. Despite this fact, FIFA's lawyers proceed to extensively define their control of "Media Rights, Marketing Rights, and Intellectual Property Rights" to eliminate any chance of engaging in a legal battle that would require an outside interpretation of the agreement or, more consequentially, its validity.
Some of the more astonishing rights granted to FIFA by the countries who are on the ballot as candidates to host the tournament include:
The result of this agreement in 2010? Using the exchange rate between the USD and South African Rand on the day the data was published, 09/06/2010, the 2010 World Cup in South Africa made approximately $4 billion profit for FIFA. Meanwhile, South Africa generated about $1.52 billion dollars in additional revenue from tourism during the tournament, but profits totaled only about $474 million dollars, or 10% of the country's total investment.
Interestingly enough, based on the amount of resources invested in the bid process by countries, it appears that the perceived future benefits of the exposure provided by the FIFA World Cup are what drives countries to lobby so aggressively to be host the tournament. The final installment of this 3 part series will investigate whether that perception could be enough to motivate countries to try and influence the vote through unethical business practices, as well as a closer look at the decision to have the 2018 and 2022 World Cup tournaments in Russia and Qatar respectively.
- NLW
The source of FIFA's control of the cash flow brought in by the World Cup is the FIFA Host Selection Agreement. In the introduction, the agreement states that FIFA has ultimate authority in the manner in which the competition is staged and organized. The organization founded the World Cup, and as the governing body of the sport it should oversee the successful execution of the tournament.
If you invent the game, inherently you have an obligation to organize and administer related competitions.
The opportunity to exploit the tournament and the countries hosting it for its personal benefit arises in the next sentence of the introduction when it states, "FIFA exclusively and solely owns and controls on a world-wide basis any and all Media Rights, Marketing Rights, Intellectual Property Rights and all other commercial or other rights and opportunities."
I am not a lawyer, nor have I studied law extensively, but I would wager this statement alone would allow for FIFA to control the majority of revenue sources made available by the World Cup. Despite this fact, FIFA's lawyers proceed to extensively define their control of "Media Rights, Marketing Rights, and Intellectual Property Rights" to eliminate any chance of engaging in a legal battle that would require an outside interpretation of the agreement or, more consequentially, its validity.
Some of the more astonishing rights granted to FIFA by the countries who are on the ballot as candidates to host the tournament include:
- The right for FIFA to market itself and FIFA's Commercial Affiliates in any Host City Event
- Entities in competition of FIFA's Commercial Affiliates may not be granted marketing rights in Host City Events
- Commercial Affiliates in any food and beverage product category shall have a first right of negotiation and right of last refusal for the right to offer and/or sell their products at any Host City Event
- The sale of official licensed products at any Host City Event shall be exclusively conducted by the entity appointed by FIFA, with utilities and space provided on an at cost basis (tax free)
- FIFA controls naming rights of all stadiums and training sites for term of agreement
- These rights can be granted to FIFA's Commercial Affiliates
- FIFA has the right to determine a perimeter around sites where certain commercial activities are prohibited, and may require the removal or concealment of advertisements in competition of FIFA's Commercial Affiliates within the perimeter.
- FIFA controls ticket allocation to Host City, and tickets must be purchased from FIFA by the Host City
- The Host City cannot devote more resources to promotion of other major sporting events outside of FIFA competitions in Host City in year prior to competition period
- The Host City shall be responsible to bear all costs for the fulfilment of its obligations
- FIFA and its subsidiaries are held free and harmless from and against any tax payments and costs shall be borne by Host City
The result of this agreement in 2010? Using the exchange rate between the USD and South African Rand on the day the data was published, 09/06/2010, the 2010 World Cup in South Africa made approximately $4 billion profit for FIFA. Meanwhile, South Africa generated about $1.52 billion dollars in additional revenue from tourism during the tournament, but profits totaled only about $474 million dollars, or 10% of the country's total investment.
Interestingly enough, based on the amount of resources invested in the bid process by countries, it appears that the perceived future benefits of the exposure provided by the FIFA World Cup are what drives countries to lobby so aggressively to be host the tournament. The final installment of this 3 part series will investigate whether that perception could be enough to motivate countries to try and influence the vote through unethical business practices, as well as a closer look at the decision to have the 2018 and 2022 World Cup tournaments in Russia and Qatar respectively.
- NLW
Thursday, January 6, 2011
FIFA: A Monopoly on International Football and The World Cup, Part 1
This article is the first in a three part series where I will examine the FIFA World Cup Host Country Selection Process, the monopoly that FIFA has on International Football and the World Cup, and provide a critique of how FIFA's position has allowed for money to control the selection process.
In order to begin to understand the decision to have Russia host the 2018 World Cup and Qatar to host the 2022 international football championship, it is useful to be familiar with the short history of the host selection process for the tournament.
First held in 1930, the early years of the FIFA World Cup were hosted on one of two continents: Europe or South America. Only once was there a vote until 1962, and often countries had unchallenged bids as a result of opposing nations withdrawing from consideration. In a symbolic effort to foster diversity and equality in the selection process, North America was allowed to enter a bid to host the tournament, and as a result from 1962-1998 the tournament was alternated between Europe and the Americas.
In 2002 Japan and South Korea hosted the World Cup in a revolutionary move by the FIFA Executive Committee, who voted in favor of the two countries after they merged their individual bids against Mexico at the last moment; resulting in the actual globalization of the tournament. The voting process has continued up until today with subsequent competitions being held in Germany (2006), South Africa (2010), Brazil (2014), Russia (2018), and Qatar (2022).
Confused? Don't over-analyze it. I liken it to a country who operates under a theocratic government, a religion whose leader is appointed by divine intervention, or the governance of Emerald City by the Wizard of Oz.
The next logical question is "What are the criteria that eligible host countries are judged on during the selection process?" This is tough to answer. FIFA's Executive Committee never explicitly states what factors into their decision, but a close look at the Host Selection Agreement all countries must submit to be officially considered provides some "clarity" on the topic. The 60+ pages of legal jargon ultimately provides broad, completely subjective requirements for the country selected to host the FIFA World Cup, including:
The next installment in the series will delve further into the Host Selection Agreement to reveal some "interesting" demands FIFA makes of countries wishing to be considered to host the FIFA World Cup.
- NLW
In order to begin to understand the decision to have Russia host the 2018 World Cup and Qatar to host the 2022 international football championship, it is useful to be familiar with the short history of the host selection process for the tournament.
First held in 1930, the early years of the FIFA World Cup were hosted on one of two continents: Europe or South America. Only once was there a vote until 1962, and often countries had unchallenged bids as a result of opposing nations withdrawing from consideration. In a symbolic effort to foster diversity and equality in the selection process, North America was allowed to enter a bid to host the tournament, and as a result from 1962-1998 the tournament was alternated between Europe and the Americas.
In 2002 Japan and South Korea hosted the World Cup in a revolutionary move by the FIFA Executive Committee, who voted in favor of the two countries after they merged their individual bids against Mexico at the last moment; resulting in the actual globalization of the tournament. The voting process has continued up until today with subsequent competitions being held in Germany (2006), South Africa (2010), Brazil (2014), Russia (2018), and Qatar (2022).
Confused? Don't over-analyze it. I liken it to a country who operates under a theocratic government, a religion whose leader is appointed by divine intervention, or the governance of Emerald City by the Wizard of Oz.
The next logical question is "What are the criteria that eligible host countries are judged on during the selection process?" This is tough to answer. FIFA's Executive Committee never explicitly states what factors into their decision, but a close look at the Host Selection Agreement all countries must submit to be officially considered provides some "clarity" on the topic. The 60+ pages of legal jargon ultimately provides broad, completely subjective requirements for the country selected to host the FIFA World Cup, including:
- The ability to provide sites for competitions and "fan related promotional events" that adhere to the highest technological, commercial, and infrastructure international standards, and if necessary, develop existing facilities to meet these requirements
- The ability to provide utilities, parking facilities, and security/emergency services for competition related events, along with volunteer and ticket facilities near the stadiums.
- Provide one stadium per Host City, and host cities, as well as 4 potential venue-specific training sites in aforementioned cities located close to respective venue-specific team hotels (Max 20 min drive)
- Provide a traffic management plan, public transportation, emergency routes, as well as shuttle bus routes for matches and FIFA Fan Fest on match days for duration of the competition
- Provide hotels to serve as "Team Base Camps" for each participating team within 20 min of their respective training sites
- Provide established local, regional, and national communication plan to promote competitions
- AND be able to minimize environmental impact :)
The next installment in the series will delve further into the Host Selection Agreement to reveal some "interesting" demands FIFA makes of countries wishing to be considered to host the FIFA World Cup.
- NLW
Tuesday, January 4, 2011
The Argument for Compensation of College Athletes and the Hypocrisy of the NCAA: The OSU Model
As a recent graduate of the University of Michigan, I never thought that I would see the day that I would offer my support to any cause associated with the Ohio State University or any of its student athletes. Perhaps even more surprising is that the player in question is Terrelle Pryor, who 3 years ago chose to attend OSU over Michigan in a devastating recruiting loss for the Wolverines football program and incoming coach Rich Rodriguez.
On December 23, 2010, Pryor and four teammates were suspended for the first five games of the 2011 season for selling awards and accepting improper benefits. Personally, I believe that college athletes need to be compensated in addition to their tuition, room, and board, an opinion that I have found to be fairly widespread amongst those who follow college athletics closely. Alas, such a model doesn't exist, so logically one would expect that the NCAA would act according to its guidelines; which appear to be subject to a loose, incident specific interpretation.
On December 29th, 2010 the NCAA posted an explanation for their decision on its website stating, "They [the Ohio State football players] indicated they were not aware there was a violation and learned of the issue based on later rules education, which was confirmed by OSU through interviews and supporting documentation."
Gene Smith responded to the NCAA's decision explaining,"We were not explicit with these young men that you cannot resell items that we give you. They stated in their interviews with us and with the NCAA that they felt those items were theirs, that they owned them, that they could sell them to help their families. … We were not explicit and that's our responsibility to be explicit."
All indications are the sale of the memorabilia and gifts were not used to "help their families", but rather in exchange for tattoos, and possibly other benefits. As former Buckeye Antonio Pittman tweeted, "Cats been getting hookups on tatts since back in '01", and there have been reports that the owner of the tattoo parlor in question has pictures of Ohio State player memorabilia on his Facebook page.
Furthermore, it seems to me that it is highly unlikely that Jim Tressell or other administrators at Ohio State didn't make clear that selling memorabilia and gifts for personal profit was a violation of NCAA rules, but I was willing to give the players the "benefit of the doubt" and consider them "innocent until proven guilty". Then an article by the OSU student newspaper came to light. The article states that former Buckeye Thaddeus Gibson, now with the San Francisco 49ers, said they were told fairly often not to sell personal items. Gibson is quoted as saying, "Oh yeah, they (OSU athletic director Gene Smith and the coaches) talked about it a lot." Later Pryor quipped, "I already knew what I shouldn't have done back two years ago".
I think the old saying goes "Where there is smoke, there is fire". This appears to be a wildfire that is quickly getting out of the NCAA's control and is tarnishing its own integrity.
Further along in the NCAA's statement, the governing body explains the decision to allow the players to play in the bowl game by saying, "It [A Student-Athlete Reinstatement Policy implemented in 2004] recognizes the unique opportunity these events provide at the end of a season, and they are evaluated differently from a withholding perspective for student-athlete reinstatement." In its conclusion to the statement, the NCAA declared, "Money is not a motivator or factor as to why one school would get a particular decision versus another."
The validity of this statement has been contradicted in a number of revelations. On December 30 PlayoffPAC, a federal political committee dedicated to establishing a competitive post-season championship for college football, declared the Orange Bowl provided a free, five-day Caribbean cruise in 2010 to 40 athletic directors, conference officials, and their wives, allegedly in violation of IRS rules. Followed by comments from Sugar Bowl CEO Paul Hoolhan in the Columbus Dispatch that he lobbied for Pryor and others to be considered for exemption to the rule, "to preserve the integrity of this year's game", and "That appeal did not fall on deaf ears".
Clearly, "Money is not a motivator or factor".
In 2006 the Sugar Bowl had a revenue of $12.9 million with its main expense being a payout of $6 million to the payout pool for BCS teams. Using the most recent CPI data to compensate for inflation, in 2011 the revenue generated can be expected to be around $14,234,000 with expenses of around $6,620,000. The rest of the revenue is distributed amongst committees for the game such as $1.3 million in employee salaries, about $453,000 to Paul Hoolihan, and $118,000 for decorations, all in 2006 dollars. In 2006, the Sugar Bowl managed to generate $1.1 million in profit, tax free. The rest of the money the schools receive are from TV and sponsorship revenue. Here lies the major problem, and likely a decisive factor for the NCAA deciding to allow Pyror and his teammates to play in the game. If they don't play, the game isn't competitive, ratings suffer, the Big Ten is further embarrassed as a whole, and the bowl loses $X amount of dollars.
Terrelle Pryor, some former OSU football players, and the local Columbus media, appear to have provided the average sports fan with a birds-eye view of the corruption and hypocrisy that exists in college athletics today. The athletes save maybe $40,000 - $50,000 a year from their scholarships, can't take advantage of their power to generate revenue because of their amateur status, and all the while the Universities and NCAA are making millions of dollars exploiting them.
Until the NCAA steps up and takes a firm stance against the practice of accepting improper benefits, or more appropriately, creates a compensation model for all athletes who participate in college athletics; the NCAA will continue to be embarrassed and face appropriate public scrutiny.
On December 23, 2010, Pryor and four teammates were suspended for the first five games of the 2011 season for selling awards and accepting improper benefits. Personally, I believe that college athletes need to be compensated in addition to their tuition, room, and board, an opinion that I have found to be fairly widespread amongst those who follow college athletics closely. Alas, such a model doesn't exist, so logically one would expect that the NCAA would act according to its guidelines; which appear to be subject to a loose, incident specific interpretation.
On December 29th, 2010 the NCAA posted an explanation for their decision on its website stating, "They [the Ohio State football players] indicated they were not aware there was a violation and learned of the issue based on later rules education, which was confirmed by OSU through interviews and supporting documentation."
Gene Smith responded to the NCAA's decision explaining,"We were not explicit with these young men that you cannot resell items that we give you. They stated in their interviews with us and with the NCAA that they felt those items were theirs, that they owned them, that they could sell them to help their families. … We were not explicit and that's our responsibility to be explicit."
All indications are the sale of the memorabilia and gifts were not used to "help their families", but rather in exchange for tattoos, and possibly other benefits. As former Buckeye Antonio Pittman tweeted, "Cats been getting hookups on tatts since back in '01", and there have been reports that the owner of the tattoo parlor in question has pictures of Ohio State player memorabilia on his Facebook page.
Furthermore, it seems to me that it is highly unlikely that Jim Tressell or other administrators at Ohio State didn't make clear that selling memorabilia and gifts for personal profit was a violation of NCAA rules, but I was willing to give the players the "benefit of the doubt" and consider them "innocent until proven guilty". Then an article by the OSU student newspaper came to light. The article states that former Buckeye Thaddeus Gibson, now with the San Francisco 49ers, said they were told fairly often not to sell personal items. Gibson is quoted as saying, "Oh yeah, they (OSU athletic director Gene Smith and the coaches) talked about it a lot." Later Pryor quipped, "I already knew what I shouldn't have done back two years ago".
I think the old saying goes "Where there is smoke, there is fire". This appears to be a wildfire that is quickly getting out of the NCAA's control and is tarnishing its own integrity.
Further along in the NCAA's statement, the governing body explains the decision to allow the players to play in the bowl game by saying, "It [A Student-Athlete Reinstatement Policy implemented in 2004] recognizes the unique opportunity these events provide at the end of a season, and they are evaluated differently from a withholding perspective for student-athlete reinstatement." In its conclusion to the statement, the NCAA declared, "Money is not a motivator or factor as to why one school would get a particular decision versus another."
The validity of this statement has been contradicted in a number of revelations. On December 30 PlayoffPAC, a federal political committee dedicated to establishing a competitive post-season championship for college football, declared the Orange Bowl provided a free, five-day Caribbean cruise in 2010 to 40 athletic directors, conference officials, and their wives, allegedly in violation of IRS rules. Followed by comments from Sugar Bowl CEO Paul Hoolhan in the Columbus Dispatch that he lobbied for Pryor and others to be considered for exemption to the rule, "to preserve the integrity of this year's game", and "That appeal did not fall on deaf ears".
Clearly, "Money is not a motivator or factor".
In 2006 the Sugar Bowl had a revenue of $12.9 million with its main expense being a payout of $6 million to the payout pool for BCS teams. Using the most recent CPI data to compensate for inflation, in 2011 the revenue generated can be expected to be around $14,234,000 with expenses of around $6,620,000. The rest of the revenue is distributed amongst committees for the game such as $1.3 million in employee salaries, about $453,000 to Paul Hoolihan, and $118,000 for decorations, all in 2006 dollars. In 2006, the Sugar Bowl managed to generate $1.1 million in profit, tax free. The rest of the money the schools receive are from TV and sponsorship revenue. Here lies the major problem, and likely a decisive factor for the NCAA deciding to allow Pyror and his teammates to play in the game. If they don't play, the game isn't competitive, ratings suffer, the Big Ten is further embarrassed as a whole, and the bowl loses $X amount of dollars.
Terrelle Pryor, some former OSU football players, and the local Columbus media, appear to have provided the average sports fan with a birds-eye view of the corruption and hypocrisy that exists in college athletics today. The athletes save maybe $40,000 - $50,000 a year from their scholarships, can't take advantage of their power to generate revenue because of their amateur status, and all the while the Universities and NCAA are making millions of dollars exploiting them.
Until the NCAA steps up and takes a firm stance against the practice of accepting improper benefits, or more appropriately, creates a compensation model for all athletes who participate in college athletics; the NCAA will continue to be embarrassed and face appropriate public scrutiny.
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