One cap fits all

The FIA today announced its plans to introduce an F1 GP budget cap. From 2010, all teams will be encouraged to operate within the £40 million cap, although this limit will exclude driver salaries, engine costs, fines, marketing and hospitality. For teams that comply with the cap, they will be given greater technical freedom and be entitled to unlimited out-of-season testing. It seems though that teams will nevertheless be entitled to ignore the cap and carry on as normal. Does the cap therefore constitute a great leap forward? Or is it, at best, simply a compromise; at worst, a 'fudge'? And how will teams seek to benefit from the advantages that cap compliance will bring, while actually using by-pass strategies to minimise its effects? For instance, might a team be able to run a modest car but pay huge sums of money for the best drivers and the best engine? There are also other issues: to what extent is the cap a reflection of the various global pressures and constraints the FIA faces? Would any other approach to capping have attracted the attention of the EU whenever the F1 series arrived in Europe? Is the cap going to change the balance of competition or simply intensify it, moving competition off into different directions? And how will teams like Ferrari respond when the team is currently spending hundreds of millions of pounds? Will such teams reduce spending or simply spend the same amount of money (or more) in different ways?

Super models?

Early season estimates indicated that teams reaching the semi-finals of this season's UEFA Champions League could generate upwards of Euros 60 million from the achievement (winning the Final could be worth as much as Euros 110 million). In one sense therefore, Arsenal, Barcelona, Chelsea and Manchester United will be pleased to have reached this stage of the competition. However, one has to ask whether getting to the semi-finals is desirable or a necessity for the clubs, especially as each of them is carrying a significant amount of debt? In other words, to what extent are the business models of the four clubs still involved in the competition premised on the need to at least secure a semi-final place? If they had reached the quarter-finals, if they had failed to progress from the group phase, just how significantly might this have affected their business models? And if such clubs actually failed to qualify for the Champions League, especially in consecutive seasons, would their business models thus become unsustainable?

Football's World Cup 'shock'

South Africa has reached agreement with twelve members of the Southern African Power Pool (SAPP) to provide the country with additional electricity in order to prevent demand outstripping supply (thereby inducing power cuts) during next year's FIFA World Cup in the country. Is this natural and sensible contingency planning or an indication that South African infrastructure is unable to cope with hosting a major sporting event such as the football World Cup? And, given FIFA's intent at staging the World Cup in Africa, should or shouldn't the organisation assist in helping with any costs that such an arrangement might inflict on any of the SAPP members?

When ambushers attack

When Holland played the Czech Republic in Leipzig during the 2006 FIFA World Cup, the match was characterised more by the confiscation from fans of orange lederhosen handed out by the Bavaria Beer company (the official event sponsor was Budweiser). In Britain's 2006 Olympic and Paralympic Games Act, provision is made to control such ambush marketing tactics, and also Olympic trademark infringements. While some people are aware of this particular legislative provision, most are not, including many businesses. As we head towards 2012 therefore, how many people and organisations are likely to be 'dealt with' under the provisions of the 2006 Act? What proceedings will be taken against them? And what defences might people/organisations have? Will members of the general public and unknowing domestic businesses get caught in the crossfire of the major international ambushing battles that always take place around sporting mega-events? What will be the marketing, commercial and legal ramifications of this for all concerned? Might there also be some issues around civil liberties too, as the movement of people around venues is regulated as the authorities attempt to address the threat of ambushing? At which point will Britain actually start to realise what ambushing is and how the authorities intend to handle the problem, and how will the public react once its members know what is happening?

What not to wear

The agents of Great Britain's leading Olympic athletes have recently been meeting with officials from UK Sport to discuss the sponsorship arrangements that will be in place for Team GB at the 2012 London Games. It is anticipated these meetings will lead to athletes and UK Sport formulating an agreement that all will be expected to sign. Reaching an agreement and then enforcing it is likely to be a potential minefield, fraught with difficulty, and characterised by a myriad of image rights and personal endorsement considerations. There are too many issues for one blog posting to consider, but here are some questions that highlight the territory UK Sport and the athletes are operating in: once an athlete signs the agreement, just how likely is it that we will witness any British athletes in 2012 having an 'Usain Bolt moment', waving their heavily branded personally endorsed footwear in front of an official scoreboard before the world's media? During the victory parade that will inevitably take place for Team GB in Trafalgar Square some time towards the end of 2012, what will each of the athletes be wearing, and which company will it be produced by? On what products and in which media will we see British athlete images appearing? Will this be under the auspices/jurisdiction of Team GB? Under the terms of their own personal deals? And where will the boundary between personal and team-related deals actually lie?

Draft response

With the National Football League's (NFL) player draft set to take place, and with the outcome of the Indian Premier League's draft now on show in South Africa, centralist models of sport are clearly designed to ensure the maintenance of competitive balance. In the European Union, while we are still struggling to get to grips with freedom of movement in sport, one way to address issues in competitive balance might be to consider a draft in sports such as football. Could this ever work? With no real system of college sport, where would players for the draft come from? Would teams, clubs, governing bodies or a central agency such as the Union control and manage such a player allocation mechanism? How difficult would it be to secure the agreement of clubs like Manchester United and Real Madrid to consent to a democratising and balancing allocation of players across European football? How would any such draft work? Would it be the 'first pick' system or one of the other draft systems currently employed elsewhere in the sporting world? What possible outcomes might there be for European football if a widespread agreement could be reached that a draft is the best way forward for the sport? Or is the whole idea of a European football player draft completely nonsensical? And wouldn't it be set for failure once more until such time that the EU agrees upon the specificity of sport? But then, if F1, cricket et al. can change the way they have always done things, then why can't European football?

What about whereabouts?

Having considered WADA's 'whereabouts rule', the European Union has decided that it breaches the right to privacy of athletes and is thus in conflict with the EU's fundamental principles. Interesting, but potentially challenging for the Union. If the Lisbon Treaty is ratified, thereby leading to the establishment of the specificity of sport, the EU may well have the opportunity to support the 'whereabouts' code as sport would be exempt from laws and regulations applied in other industrial sectors. Is the choice this stark? Is it a case of privacy versus 'whereabouts'? Or would specificity provide a way out of the current contradiction? Is the EU's desire to uphold the principle of privacy so strong that it won't even use the Lisbon Treaty and/or specificity as one way of addressing drugs problems? In which case, does the EU have other plans in mind for controlling drug taking in sport? And what does the rejection of a global sport organisation's regulations by an international governmental organisation tell us about the way forward in drug control, and indeed sport generally?

Modhi's operandi

In any sport, there is an implied code of behaviour enshrined within a set of rules. Hence, when an athlete is called before a governing body to explain or justify their behaviour, an implicit statement is being made about what is and isn't acceptable. However, cricketer Kevin Pietersen, currently playing in the Indian Premier League, has been explicitly told by the IPL's Commissioner, Lalit Modhi, to improve his behaviour and play 'within the spirit of the game' (Pietersen was found guilty of dissent following a weekend game). Was it acceptable for Modhi to make such a comment? Should codes of behaviour be clear and openly stated? Does this approach to regulating athlete behaviour constitute good governance on Modhi's part? Should other sports follow suit? Do these other sports pander too much to the whims of athletes by dealing more quietly and subtlety with unacceptable behaviour? Or is this the best way? The most democratic way? Should Modhi have come out so openly in admonishing Pietersen? Could it actually be that Modhi's comments have less to do with Pietersen's specific behaviour, and more to do with ensuring that the IPL loses none of its commercial lustre as the result of some 'naughty boys' and their bad behaviour?

Open, but potentially closed

According to various reports, the Royal and Ancient Golf Club (hosts of this year's British Open), are offering to pay for some people to travel to the championship because tickets sales, especially in corporate hospitality, are down significantly on recent years. Is this a desperate measure for desperate times, or a creative approach to sustaining business during a harsh economic downturn? Perhaps it is an after-thought, evidence of an organisation that failed to manage customer retention during the good times? That said, surely retaining customers for an event that runs only once a year is a huge challenge, especially during tough times? Does this mean the travel offer is therefore one of few tools the R&A has in its box? Is it creative, or is it actually a poor attempt to deal with much more fundamental problems facing the organisation?

Steroid abuse, financial flab and Anglo-French diplomacy

Following on from yesterday's posting, one report today has suggested that debt in English football, particularly at the top level, is the financial equivalent of steroid abuse. Thus, while public concern about debt grows and the British government expresses its concerns, there is a remarkable convergence with broader European interests, particularly in France (where the government is also very keen to eliminate the advantages that football club debt confers upon those that have incurred it). Are the French and the British therefore on course for a moment of joint agreement? Or are they in agreement about (English) football's financial problems but for different reasons? And possibly with a different view of how such problems should be dealt with? Could we be heading for a consensus or is there a big battle ahead? And what influence might UEFA President, Frenchman Michel Platini, have on the outcome of this conundrum?

Interventionism, dabbling and the laissez faire management of sport

The British authorities have effectively 'intervened' twice in English football today: firstly, the Office of Fair Trading has successfully exerted pressure on Manchester United to adopt a fairer ticket pricing policy (in spite of United facing excess demand for tickets and being £750 million in debt); and secondly, a group of British MPs has called for foreign owners of football clubs not to saddle their English acquisitions with high levels of debt. While it seems meaningless (and rhetorical) to ask whether or not football fans agree with the interventions, an alternative view necessitates asking why football alone attracts so much political interest when there are numerous other sports that have their own problems to address and would benefit from political assistance? Moreover, when the British government tends towards a light-touch in its dealings with sport, how can a more interventionist stance in relation to football be justified and explained? Yet, can what the British government is doing actually help in creating a model that could be applied to other sports at some stage in the future? Might we therefore see a more proactive and interventionist British sports strategy gradually beginning to emerge?

China takes the rains

Last season's F1 Grand Prix in Shanghai was held in October whereas the 2009 race was held in April. According to official statistics, the average rainfall in Shanghai during April is likely to be almost double that in October. This year's race was therefore - predictably - run in heavy rain, almost breaching F1's two hour rule as a result of the atrocious conditions. Should the race have been rescheduled from October with the above information in mind? Or was it a sensible decision to have a race in April as it coincided with races in Malaysia, Australia and Bahrain, thus reducing the travelling times and distances faced by F1 teams, a particularly important issue in these times of F1 austerity? And what does the China GP decision tell us about the issues and challenges faced in scheduling sporting events?

Diffuser diffusion

Now that a court has ruled the diffusers on the Brawn, Williams and Toyota are legal (and within the spirit of the law), the race is now on for other teams to develop and perfect their own diffusers. How quickly will this happen? What knowledge do the other teams already have of their rivals' diffusers? If they have some knowledge, how might this be used and incorporated into their own designs? If they have no knowledge, what will be the process of adding diffuser technology to their cars? In summary, how is knowledge about diffusers being diffused? And might we ultimately see diffusion of the technology into road-going vehicles?

Barak - blunder or bonus?

At the request of Henry Kissinger, a bid team member, Barak Obama has apparently personally written to FIFA President Sepp Blatter imploring him to award the 2018 World Cup finals to the United States. Given that the US only last held the tournament in 1994, doesn't such a move represent undue and unfair pressure? Or is high level support an important and necessary part of the sporting mega-event bid process as it demonstrates a country's commitment to hosting these events?

Camps for everything

In the UK at the moment, there is something of a scramble amongst cities as they try to attract 2012 Olympic squads to train at their facilities. Quite why cities are doing this is an interesting issue, particularly as local governments will often have to pay a hosting fee to overseas squads. Add in to this the cost of security, policing etc., and the negligible economic benefits that a squad of athletes are likely to bring to a city, and one is left to ask: is it kudos alone that is motivating British cities to seek to host 2012 Olympic Games squads?

Losers can be winners

Recent research indicates that losing a bid to host the Olympic Games can still have a positive economic impact on the bid city. Is this really true? If so, on what basis does the positive impact occur? Does the positive economic impact actually contribute to an overall net economic gain? In which case, should cities simply bid in the expectation of losing because they still stand to win? Does it make people view cities in a different way, possibly inducing them to visit and spend? Wouldn't bidding to lose make mega-event bid processes a complete mockery? Surely the notion that losing a bid to host the Olympic Games is akin to actually winning a bid, is a rather fanciful one?

For Hillsborough, read Abidjan

As football commemorates 20 years since the terrible events at Hillsborough in 1989, when 96 people lost their lives in stadium accident, it is worth remembering that less than a month ago 19 people lost their lives in a stadium accident in Abidjan, Ivory Coast. There have clearly been major developments in European stadium design and safety since 1989, but whether such developments have reached other parts of the world is debatable. We therefore have to ask, how can what happens in some parts of the world inform and help what happens in other parts of the world? And this doesn't just hold for stadium design and safety; given developments in sport in places like the UK, the US, Germany, Australia etc, how do we ensure that there is equity, fairness and sharing across the world? If we want to prevent the parallel development of sporting worlds, where the richer nations prosper and grow while other nations fall behind, is there a need for a global sporting body that can work towards developing and implementing a global sport strategy?

Simply the best?

The big global sporting battle is often thought to pitch European football against US basketball, certainly the case in South-East Asian markets such as China. However, according to Forbes magazine, it is the American NFL that has more commercial clout than the NBA despite the former essentially being focused only on the North American market. Forbes has also recently noted that European football is actually second only to the NFL in commercial terms. Surely this leaves European football standing alone as the world's leading and mostly commercially lucrative sport, with extensive domestic, international and global appeal/success? The problem is though, that as with other league tables of performance, Forbes considers only commercial revenues. Hence, if one was to factor costs into a comparison of European football and the NFL, would the same relative position of both sports still hold?

.....and then along came Candace Parker

US female basketball player, with her first target being Sharapova's earnings of $25 million per year (most of which comes from commercial contracts). Thereafter, Parker apparently has Jordan and Woods' achievements in her sights. Will Parker become THE leading athlete brand of this century's second decade? If so, why? What has her brand got that other brands haven't? If not, then: a) why is she being touted so heavily at the moment? And b) might there by structural or institutional barriers that prevent her ascent to brand success?

Brand it like.....

With Brand Beckham in a period of transition, Woods having been injured for almost a year, Kournikova having faded from the scene, Hamilton struggling at the back of the F1 grid, Federer losing his tennis battle to Nadal, and Messi lacking physical appeal, who should the athlete be that sport looks to 'brand it like'? Is there an obvious candidate? What qualities and characteristics must they have? Is there anyone at the moment that has sufficient global reach? Or anyone that would actually want such global reach? Or are we entering a period where athletes will simply be able to concentrate on being athletes? What role might the downturn have played in the current relative anonymity of athlete brands?

Super6 the trick?

In an attempt to broaden the global appeal of snooker, governing body World Snooker is planning to introduce a new Super6 tournament in which there will only be six red balls (in addition to the normal colours) and shorter games, thus making snooker a shorter, faster game. While changes to competition structure in sport are essential if the 'core product' (i.e. the uncertainty of outcome) is to retain its appeal, the growing emphasis for sports to be 'short and sharp' raises some interesting issues: is this the way sport is going to be from now on? Are we so time impoverished that many of us are unable watch sport for any length of time? Is sport effectively being dumbed down through the use of short-format sports? May be it is simply about money, with all sports keen to respond to some of the increasingly commercial influences evident across the sporting landscape? And what are we supposed to think about market-led sport, particularly when many of us engage in sports that have developed socio-culturally? Or were sports in their previous incarnations unnecessarily long and over-burdening? Are market signals a more effective way of planning and organising sport? Perhaps the process of change implied in moves towards short-format sports indicates that sport is becoming more outwardly focused and thinking more about fans and customers? Could it actually be that we are witnessing the splintering or segmentation of sport where 'old school' and 'new school' exist side-by-side, but appeal to different people for different reasons?

The last summer of youth?

Lazio have accused Manchester United of 'buying' the parents of Federico Macheda in order to secure the player's services. United allegedly offered Macheda's parents jobs worth millions of pounds in order to get him to sign for the club thereby circumventing FIFA laws relating to the transfer of teenagers across international boundaries. From 1st October 2009, FIFA will be tightening their laws to prevent such practices leading one to ask: will the summer of 2009 be remembered for the mass migration across Europe (and indeed from across the rest of the world) of teenage footballers and their parents? As such, can we therefore expect to see a very different summer of transfer activity than we do normally?

Bury the evidence

Following yesterday's early post about match-fixing, news later in the day reported that five players have been charged by the English Football Association with gambling on the outcome of a match between Bury and Accrington Stanley. Four of the players were from Accrington, the other being from Bury. Two of the five players took part in the match, which Bury won 2-0. Some bookmakers had stopped taking bets on the match when it began to emerge that there had been irregular betting patterns around the fixture. Was the match fixed, or was it simply some 'lads' having an ill-thought through bet? If the match was fixed, what was the anatomy of the fix? Again, was it just four 'lads' trying to make a bit of cash, or was there something much better organised and sinister at the core of the gambling activity? Who was involved? What was on offer to the players? How was any fix that may have been planned supposed to work? Who would have been the winners if the betting had gone undetected? And, if such activity has happened once, how many other times has it taken place and will it take place?

The businessman, the writer and the match-fixer

At the forthcoming Play the Game conference, to be staged at Coventry University in June, Mark Davies (Managing Director of Betfair), Declan Hill (journalist, writer and academic) and Michael Franzese (convicted mafia boss and former match fixer) will go head-to-head in a public debate about match-fixing in sport. Is such a debate relevant and necessary? Is match-fixing a massive problem that is getting worse, given the influx of 'big' money into many sports allied to the advent of online gambling? Or is the debate likely to over-emphasise a practice which, at worst, is almost insignificant and essentially confined to the margins of sport? At the heart of the debate will be a fundamental and challenging question: what actually constitutes match-fixing?

Is France showing Europe the way?

Hot on the heels of Frenchman Michel Platini's work to regulate the football player labour market on behalf of UEFA, the French rugby union league (LNR) is thought to be on the verge of introducing a salary cap and a limit on the number of overseas players that can appear for its domestic clubs. There are consequently a number of very important issues bound up in moves the French are making to ensure that prevailing labour market challenges do not spiral out of control. These range from, for example, legal (are the proposed regulations compliment with or in breach of European Union laws?) and socio-political (is France seeking to serve its own interests, make a play for preeminence across Europe, or are the French genuinely concerned about the general future of sport in Europe?), through to managerial (how will the LNR stop player drift to countries with fewer regulations and higher salaries?) and the macro-sporting environment (will what works in France necessarily work elsewhere in Europe?).

Spygate, Liegate and Water(gate)

Although the early cancellation of today's F1 race in Malaysia due to heavy rain may have been the day's biggest highlight, the McLaren team's conduct is yet again being called into question. Following the 'Spygate' row of a couple of years ago, the spotlight is now on the team again following allegations that they instructed Lewis Hamilton to lie to race stewards following the first race of the season in Australia. Notwithstanding the moral and philosophical dimensions of the McLaren team's behaviour, there have surely got to be some major team management issues which they have got to get to grips with? Is the team's organisational culture one that fosters a 'win at all costs' mentality? If so, how does this impact upon the drivers, the technical and managerial staff, and McLaren's relationship with the other F1 teams? If the team's culture is not 'win at all costs', then how is the constant scrutiny of and allegations against them influencing motivation and morale? Indeed, given that a senior member of the team has now been suspended by McLaren following recent events, could it be said that the team's culture (as well as its values, vision, management style and strategy) is actually tearing McLaren apart?

27,750 - love

The Wimbledon tennis Grand Slam has announced that it will be seeking to raise almost £60 million through an issue of debenture tickets, tickets which will give their owners a reserved seat on Centre Court everyday for the tournaments 2011 to 2015 inclusive (cost per ticket: £27,750). Why does Wimbledon need to do this, and doesn't it simply exacerbate the already often acute shortage of tickets for the tournament? Accepting that it is a good source of revenue for the organisers, does it not nevertheless reinforce the view that tennis is an elitist sport by effectively denying preferential access to anyone other than those who can afford £27,000+? The debenture issue, which Wimbledon has a history of engaging in, also recalls past developments in football, notably the stadium debenture issues associated with West Ham and Arsenal. When these two clubs proposed the idea of a debenture scheme to fund stadium re-development projects, there was uproar. Why is it that many felt so passionately about these cases but that the Wimbledon case will simply disappear from view? Are such debentures bound up in the history and heritage, the social class system, and British attitudes towards sport? Or do we actually just like and care more about football than we do tennis?

Web of intrigue

Italian football club Juventus has recently launched new official websites in China and Japan, providing services including an online store, match highlights, interviews and discussion forums. The club and its advisors are making some very confident claims about the Chinese and Japanese markets, and apparently seem to believe that the sites will be a major success for the club. Is this the case? Is Juve big enough in China and Japan to succeed? Or will the club have to continue playing second best to Manchester United and Real Madrid in South-East Asia? Has the recent scandal in which the club was involved damaged the Juve brand, and are the effects of this enduring? And what about the websites, are they really so important in achieving market-entry, and building affiliation and securing retention amongst fans in South-East Asia? What do fans in this part of the world actually want from their European football clubs, is it simply a website or do they want something more? What does the online experience provide them with? What should it provide them with? Isn't a website simply a holding strategy, and tour games and direct access to players is much more important to fans? In which case, what part does a website play in terms of marketing, international and overall corporate strategies? May be websites are dead? Is the creative use of Twitter, Facebook, You Tube etc. a better way to engage with distant (sometimes referred to as 'dislocated') fans?

A G20 for sport?

Sport across the world currently faces a myriad of challenges: for example, in countries like Argentina and Brazil, there are issues about football player migration to other countries; in the US, so badly hit by the downturn has NASCAR been that the sport's governors are considering fundamental changes to the model of operation, possibly leading to the introduction of a franchise system; in relation to South Africa, some remain concerned about the stadium building programme in place for the FIFA World Cup 2010, just as people are concerned in the same way about UEFA 2012 in Ukraine; in India and Pakistan, major security concerns have beset cricket, both country's most popular sport; in Japan, leading motor sport teams such as Honda, Subaru and Kawasaki have all withdrawn entries from respective competitions in which they were involved; and across Europe there are concerns about debt levels, competitive imbalance and falling crowds in professional football. Add to these examples, matters pertaining to corruption, changing ownership patterns, the shifting balance of power in sport etc, and we are thus left to ask: does sport need the equivalent of a G20 summit?

Going South

Trading in the shares of Southampton FC was today suspended amidst fears that the club is about to go into financial administration. In the meantime, Cheltenham Town FC faces an anxious wait to find out whether their local council will loan them £100,000 to see the club through a difficult period. Add to this information, the following: in the last 20 years, an English football club has been in administration at least 65 times; moreover, there are claims that the accumulated debt of English football is running at somewhere between £2 billion and £3 billion. Given the precedent set by recent government bailouts of financial institutions, is it: a) time for the government to step in and bailout football? b) feasible for the government to bailout football? and c) morally and/or socially acceptable for the government to bailout football? Or has football created its own financial problems and should therefore be left to deal with them on its own? And what might the European Union, Michel Platini, Sepp Blatter et al. have to say about such a move?