Let the (economic impact) games begin!

We are just days from the opening ceremony of the 2012 London Summer Olympic Games, and as we lead up to the Games there has been a great deal of discussion about the economic impact of the games.  Over at NPR, they have blogged about the economic impact of the games, with Goldman Sachs noting that a large number of Olympic Games have made a profit.  They do have a footnote which says:

“In accounting for the cost of hosting an Olympics, most countries (including the UK) have treated the cost of constructing facilities and infrastructure, together with security and other ancillary costs, as being separate from the cost of running the Games themselves. The London Games are expected to make a profit (in the sense that revenues will exceed the cost of running the Games) but this will still leave the government with a significant (£8-9bn) bill from construction, security and other costs.”

Yeah, so if we don’t include costs, there is a profit.  I’m sure there are a lot of companies which wish they could get away with such a spin.  Others have been getting into the debate, I may be one of the few Americans who watches C-SPAN where they play the Prime Minister’s questions from the UK on television every week (which I encourage everyone to watch, if you love spirited debates), but many have known current Prime Minister David Cameron for his focus on trying to cut costs in the UK government.  Yet, he has come out and said the Olympic Games:

They should be great for our economy. We shouldn’t see them as some sort of expensive luxury in tough times.

The PM is noting that i may bring a $20 billion boost the UK economy.  Many disagree, with some analysts noting that the construction phase has been completed, and that sector of the economy doesn’t seem to be doing too well with the games about to begin.  Not to mention the cost will be approximately about $200 per person just to host the Olympic Games in London this year.

The back and forth about the economic impact of the London Games has begun, my guess would be from past research and what we are seeing in terms of costs, that this will be another games that will not be bringing positive economic impact to London or the UK.

Manchester City’s New Record Losses!

Manchester City has announced that they have achieved a new Premier League milestone, they have posted the worst losses for any club in a single year, at a sum of £194.9 million.  The team owned by Sheikh Mansour currently sits on top of the Premier League table, and seems to show that better performance (and potentially championships) can be won by just dumping money into a team.  UEFA has now implemented a “Fair Play” financial rule requiring teams to be more financially responsible if they are to be allowed to play in confidential competitions such as Champions League and the Europa League.  Man City’s losses would have gotten them banned in future years, but because the losses come before the accounting window begins, they are safe for now.

The ESPN soccernet article linked above did note that the change in financing has taken consistently mid-table Man City to top of the table, and while costs have increased, so has revenue.

The Blues are also pointing out that commercial revenue has risen 49.7% to £48.5 million and TV rights, thanks to the club’s third place Premier League finish, winning the FA Cup to end a 35-year trophy drought and a run to the last 16 of the Europa League, have increased 27.4% to £68.8 million.

The question is, will Man City be able to keep up their performance in future years with more limited ability to spend money because of the “Fair Play” rules.

Match fixing in Pakistan Cricket

I’ll admit it, I never understood the sport of Cricket that much.  I’ve watched a few times, and I get the general idea of the game, but have never developed a true love for the sport.  That said, every year I make my students here in the United States watch videos to try and better understand the game as part of an international sport class I teach.

The big news which hit the cricket world today was of match fixing (in this case called “spot-fixing”) during the highly prestigious Lord’s Test match against England earlier this summer.  Those who were on trial for this match-fixing included Salman Butt (the former Pakistan captain) and Mohammad Asif.  Both of these two individuals, along with another bowler for Pakistan are said to have conspired to bowl no-balls during the match.  The BBC’s explanation as follows:

Spot-betting involves gamblers staking money on the minutiae of sporting encounters such as the exact timing of the first throw-in during a football match or, as in this case, when a no-ball will be bowled.

All of this started with a tabloid claiming the players took money to deliberately bowl no-balls (a bowl which is illegal in some manner, and results in the awarding of a point to the opposing team) during the match, and ended with both bowlers being found guilty of conspiracy to cheat by a jury earlier today.

Following this, there was lots of talk of this being a good example to young athletes as to why not to cheat, because the consequences can be quite heavy.  It is said that the bowlers found guilty today were being leaned on heavily by others to bowl the no-balls on purpose.

And yet, I somehow think this may not change things that greatly in the sport.  While young players may see the dangers, there have been similar issues of match-fixing with many sports around the world, and often is the case where we see repeats of similar match-fixing incidents over and over again.  Though in the spirit of the game, I do hope things are cleaned up.

How a landlady may have changed the face of Broadcasting sport in Europe

This is a story of a landlady for a Portsmouth pub in the UK, who bought a satellite television decoder from another European country to show Premier League games.  Karen Murphy, the landlady for the Red, White and Blue pub in Portsmouth bought a Greek decoder card to show Premier League games, the key point in all of this is the decoder card is cheaper than paying to show the games on BSkyB, as most establishments do in the UK.  This case made it all the way to the European Court of Justice (ECJ), where a ruling was made yesterday against Ms. Murphy who will be allowed to continue broadcasting games using the decoder.  The ECJ states that prohibiting:

“import, sale or use of foreign decoder cards is contrary to the freedom to provide services and cannot be justified either in light of the objective of protecting intellectual property rights or by the objective of encouraging the public to attend football stadiums”

However, the ECJ said that this area does fall under copyright protection in the UK which means that while Ms. Murphy lost because the card is used for broadcast to the public, it does open the door for private use of the cards.  The Guardian article notes:

However, the ECJ said live match coverage itself was not covered by copyright protection, although the Premier League could claim ownership of FAPL-branded opening video sequences, theme music, on-screen graphics and highlights of previous matches.

This means that as long as the FAPL and BSkyB ensure that match coverage includes enough copyright elements pubs will not be allowed to show foreign broadcasts.

The big implications of this case, is for individuals.  The ruling basically counter acts the territorial region-by-region rights which the Premier League sells.  It is now possible for fans to go out and get the cards and get Premier League for cheaper.  This means that fans could potentially try and get around paying the high BSkyB fees, which BSkyB can’t be a fan of as they paid over one billion pounds for the broadcast rights in the U.K.  The big implication is that the Premier League may be forced to change the method in which they sell broadcast rights from regional, to a single Pan-European package.

The Premier League had this to say:

“The areas of law involved are complicated and necessarily we will take our time to digest and understand the full meaning of the judgment and how it might influence the future sale of Premier League audio-visual rights in the European Economic Area.”

The Premier League will have to wait for some further court rulings in the UK high courts in regards to this case, but they are probably worried.  They are said to make a billion pounds for their non-UK television rights this year, and are receiving around 1.6 billion pounds for UK rights from BSkyB.  How they will potentially switch their sales of broadcast rights is an important question, with big financial implications for the league as well as fans and consumers alike.  As a side note, the Guardian had a poll, and almost 75% of people said they would now try to buy the foreign decoder cards to watch Premier League matches.

Tottenham suing for a stadium, and Fulham’s owner message to fans…

In the new this week around the Premier League this past week, Tottenham has gone forward with their lawsuit over the 2012 London Olympics Stadium which was awarded to West Ham United.  I had discussed the two proposed plans that both of these clubs had for the Olympic Stadiums and their bids in a previous post.  After West Ham United’s bid was chosen as the winner, Tottenham had been considering about whether it would be worth the risk of paying around $1 million in legal fees to launch a lawsuit.  As this article notes, Tottenham has begun their legal proceedings and have claimed there were issues with the process in which the winning bid was chosen.  As the stadium is said to be worth around $777 million U.S. dollars, it is not surprising that Tottenham was quite unhappy with this decision.  While their bid required them to put money into the project, it was much less than the cost of having to build a brand new facility, especially a state of the art one like that which is being built for the Olympics.  Clearly, Tottenham believes the $1 million in legal fees is a small risk, when the potential payoff is a three-quarter of a billion dollar brand new facility.

It’ll be curious to see how this plays out, however the Olympic group which is in charge of the stadium have already come out and said they believe that their decision to award the bid of converting the Olympic Stadium into a stadium for West Ham and other events will be vindicated in the courts. It is interesting to note that if the season ended today, Tottenham would be playing in the Europa League next season, while West Ham United would be relegated down to the nPower Championship League.

In one other piece of strange news… Fulham’s owner Mohamed Al Fayed decided to erect a statue of Michael Jackson in front of the clubs stadium.  Mr. Al Fayed who was a good friend of the late King of Pop did have some curious words for any Fulham fans who questioned his decision to put up the statue:

“I don’t want them to be fans. If they don’t understand and don’t believe in things I believe in, they can go to Chelsea, they can go to anywhere else.”

I checked the iTV site which has attendance numbers, and Fulham are at about 94.2% capacity in their 26,000 capacity stadium this season… while Chelsea are around 98% in their 42,000 seating stadium.  It seems to me that there is a higher demand for Chelsea, and another of the other clubs in London based on both percentage of capacity and total number of fans going to the games of other clubs.  Furthermore, Fulham is in the bottom quarter of the league in regards to average attendance.  I don’t why Mr. Al Fayed would even think of suggesting that fans go to other clubs, especially ones like Chelsea who are battling near the top of the table, while Fulham hovers at mid-table with no chance of playing in Europe.  If I was Fulham I would be worry about bringing fans into the games, not putting up statues for individuals who haven’t even really affected the Premier League on or off the field.

World Cup Decision: Anger and Frustration

Let the recriminations begin.  Yesterday, Russia was awarded the 2018 World Cup, with England’s bid being eliminated at the first stage.  Vladimir Putin has described the vote and decision as “fair”, and I’m sure it is in his eyes.  Just not in the rest of the world’s eyes.

In somewhat similar conditions, the US also lost out for the 2022 World Cup to Qatar.  In both situations it seems clear: The best bid did not win.  It seems also clear that large quantities of money were involved.  Clearly, Qatar could throw a huge amount of money at their bid and did, as could Russia.  In both cases, another host would have provided a more lucrative profitable World Cup for FIFA.

As can be inferred thus far from this post, the outcome has left a huge amount of questions unanswered – as Declan Hill is pointing at.  How is it that the most profitable, commercially successful bid crashed out at the first stage for 2018?  Most of the England entourage have pointed at something: The total lack of integrity of FIFA members voting.  They’ll say yes to your face, but when voting it’s a different story.  Moreover, it is coincidence that the country from which two exposes of FIFA’s corrupt nature originated got just two votes from 22?

I’m personally not all that disappointed England didn’t get the World Cup.  I’m not sure how much I really wanted it.  But it’s fair to say it would have been, along with the other European bidders, the World Cup leaving the least White Elephants (Qatar, incredibly enough, plans on exporting its stadia to better uses after the tournament – and air condition when while in the desert – it is nice to see how much FIFA is concerned about the environment), since all stadia would have been the homes of English football clubs.  And therein lies a huge issue yet again unanswered for by FIFA’s unaccountable committees.  Stadia still lie barely used in Japan and South Korea after 2002, and I wonder what the legacy is for the stadia in South Africa now the world has left.  Yet FIFA commits itself to a load more such stadia in Russia, and wherever the Qatari stadia end up.

Then: The positive spin of course is that new places get to see the World Cup.  Wasn’t it nice to have it in Africa in the summer?  And won’t it be lovely to have it in mafia land in 2018, and in the desert (where alcohol is banned amongst other things natural to the football fan).  Sarcasm aside, it is nice to spread the tournament around, but this leaves, along with the legacy issue, another big and frustrating issue.  Why didn’t FIFA make this abundantly clear before the bidding began?  Why did it let old, established nations (which I think the US has to belong to in football terms these days) waste so much money on bidding if it was all in vain?  As this Guardian piece makes clear, David Cameron could have instead been back in the UK making important decisions, and perhaps not closing quite so many school sports programmes as part of the austerity his party is foistering onto the UK.

It’s been mooted for years (as the first page of Declan Hill’s ‘The Fix’ makes clear) that FIFA is unaccountable and corrupt and the biggest upshot of all this has to be that the institution needs reforming.  As it stands it continues to drive football fans to despair the world over yet has no incentive to actually take their views into account – instead taking bribes and saying one thing to one person and another to another and making corrupt decisions affecting billions worldwide.  How long must we endure this?

International Friendlies and Injuries

Ignoring the FIFA World Cup fiasco for the moment, there’s been another furore keeping the press busy in England.  On Wednesday evening an experimental England side was comprehensively beaten at home by France in an international friendly.  Cue naturally laments of how depressing the future of English football is looking (on the back of 90 minutes), but the funny undertone of the entire thing was how seemingly pointless such friendlies are.  This has been an attitude growing over the years as club teams play more and more important fixtures in Europe and domestically, and so some of the less events (the League Cup and international friendlies) have lost their importance.  It’s funny then that there was so much soul searching for a defeat in a pointless game – where most of the usual England team didn’t play.  But I guess it gets readers on to your website…

Moreover though, as hinted by the BBC blog linked earlier, an additional controversial aspect of the friendly was that Steven Gerrard of Liverpool was played for a devastating 85 of the 90 minutes, instead of the reportedly agreed 60 minutes.  The Liverpool staff apparently weren’t too impressed.  So there have been mootings from others, including Tony Pulis, manager of unfashionable Stoke, that the FA should be liable for the injuries to players when playing in international friendlies.

Now that’s all well and good; it may be an effective and sensible system: After all, the players are contracted to their clubs and their clubs pay their wages.  But of course it’s all part of a power struggle in English football between the clubs and the Premiership and the national team, one that seems to be increasingly won by the Premiership, usually at the expense of the national team.  Perhaps we must just accept this; we love the way the Premiership is, apparently, and wouldn’t miss it for the world.  But perhaps that Premiership doesn’t allow for a successful national team because that national team is pushed to the margins.

The implication of making the FA liable in friendlies is basically that friendlies will stop happening: Why would the FA even bother to play these games if an injury means that it will be liable for hundreds of thousands of pounds, maybe millions?  And of course, if we pander to the brigade who tell us that all international friendlies are now pointless, then we end up that the only games the national team plays are meaningful and hence there is no time for the international-level players to gel into playing together via some less high-pressure games – the standard way in which any team prepares for a new season.  It strikes me those proposing to abandon all international friendlies haven’t really thought this through, and the implications of it.

Liverpool + Moneyball = Unhappy Fans & Media?

The Liverpool sale has been widely discussed here by both Brad Humphreys and James Reade.  Just recently, Paul Hayward of The Guardian wrote up an editorial piece about how it would be bad news for Liverpool if their new owners took a Moneyball approach to managing the club.  The author perpetuates fear of statistics and analytical thinking and analysis of players in sport, especially in football (soccer).  Mr. Hayward especially notes that Arsenal, one club in Europe who is run with such an approach by their manager Arsene Wenger (who has a degree in economics).  He claims that the dictatorship that Wenger runs at Arsenal has been bad for the club, and lead to many bad decisions, yet if one looks at the standings over the last few years, it is quite clear that Arsenal seems to have fared better from one year to the next.

Two reconnaissance stops were the clue. At Fulham, where Roy Hodgson, coincidentally, was manager, success sprang from the restoration of stalled careers – Danny Murphy, Bobby Zamora, Zoltan Gera – and the digging out of hidden treasure (Brede Hangeland). At Arsenal, NESV was touring the Bloomingdales of worldwide scouting: a club where analytical models were so ingrained that Arsène Wenger shipped out Gilberto Silva for taking a fraction of a second longer to redistribute the ball than he had a season earlier.

The authors main argument: statistics may work for baseball in North America, but they will not work for football in England.  He even states:

The urge in matters of scouting is to defend not a computer model but the human eye, intuition, knowledge, the moment of revelation. There was no Moneyball when Liverpool spotted Kevin Keegan or Alan Hansen or when Manchester United, to quote Sir Alex Ferguson, first saw on a parks pitch a young, spindly Ryan Giggs – “a dog chasing a piece of silver paper in the wind”.

Already, this piece has seemed to pick up some ridicule from popular sport sites in the U.S. , though I will be curious how it is received in the U.K.  I understand many fans are suspicious of people using numbers and stats to understand their favorite sport, but if the results produce wins, should they really complain so much?  Looking at the Arsenal model again, they seem to have done quite well both on the field and financially in the last few seasons.

The Ongoing Saga of Liverpool FC

News has broken this morning that Liverpool FC, the iconic football (soccer) team, may well be sold by their current American owners (Tom Hicks and George Gillett) to New England Sports Ventures, the owners of the Boston Red Sox.

The rapid decline of Liverpool has been quite shocking: Just a couple of years ago they demolished Real Madrid 4-0 at their stadium, Anfield, yet last Sunday they were humbled 2-1 at the same stadium by Blackpool to lie in the relegation zone of the Premiership.  Furthermore, one of their debtors, the Royal Bank of Scotland, is getting a little tetchy and wants its loan repayed by 15th October otherwise the club will be placed into administration (bankruptcy protection) – something that would trigger a 9-point penalty and make the spectre of relegation, once unthinkable for the “Big Four” club, all too real.

This highlights the financial state of European football Brad mentioned in a recent post, something which perennially worries many commentators on football.  Yet the likely outcome of this whole saga will once again reinforce the long-standing cycle of deteriorating finances.  There will be some “bail out”, almost certainly not government-led, and the debts wiped off by some knight in shining armour.  While football clubs, especially those like Liverpool, remain as untouchable institutions (too big to fail!), the cycle will get worse and worse since owners can make the same kinds of bets made in financial markets in their heady days: Heads we win, tails the taxpayer loses.

The question probably is, then, will there ever be a Lehman Brothers of European football to kick off some kind of dramatic revolution in football?

Pakistani Cricketers and Corruption

I’ve been on vacation for a couple of weeks, and during that time much has happened in the world of sport.  Chris Dillow comments on the Pakistani cricketing scandal: It seems cricketers playing for Pakistan against England in a rather bizarre series (England hammered Pakistan for three of the four games and narrowly lost the other one when they should have lost by a mile) took bribes to bowl no-balls.

Chris basically makes the points I was planning on making in a much more eloquent way: Pakistani cricketers are paid pittance, are young, and hence they are good targets for bribes.