User:Matt Bevacqua/The impact of Business and Politics on World Football (Soccer)

From its humble beginnings in the 1860’s in England, to now having clubs worth billions of dollars, football has evolved to become one of the biggest industries in the modern world. The influence that business and politics have had on football are immense, and without industrialisation, commodification and bureaucratisation, football would not have the notoriety it has today, not to mention the extremely large sums of money the game now possesses. Business and politics have made the modern football industry what it is today.

Football
Football (Soccer) is a popular recreational and professional activity, in both Australia and around the world. According to FIFA’s Big Count 2011 there are 265 million male and female players, in addition to 5 million referees and officials involved in football worldwide. In Australia there are 970,728 footballers; 435,728 registered and approximately 535,000 unregistered, along with 67,632 officials and 3,868 clubs in operation. Football in Australia is regulated by Football Federation Australia (formerly Soccer Australia) and the highest and only level of professional competition is the Hyundai A-League. Each state and territory has a federation with numerous Tier 2 leagues (League System, 2011), which are considered the highest level of amateurism, being only one level lower than the A-League.

Football Origins
Modern day football began in England circa 1863, with the formation of The Football Association (FA History, 2011) however football wasn’t considered a business until 1956 when the English players association (Professional Footballers' Association) was revamped by newly appointed chairman Jimmy Hill. This was the birth of football as a business and thanks to Hill's efforts, player wages increased dramatically (Harding, J 2009). Today, the FA claims to have had an operating profit of £37 million by December 2010 (Gibson, O 2011) and in 2007, FA Premier League team Manchester United were worth a reported 1.8 billion US dollars (Richelieu, A, Lopez, S, & Desbordes, M 2008).

International
Away from its origins, football has become immensely popular, especially in the US. According to an article in the US Soccer Journal (National Soccer Coaches Association of America, 2010), for the 2010 World Cup held in South Africa, US citizens purchased the highest number of tickets (excluding South Africa) and for every English supporter in South Africa, there were two Americans. This boost in popularity has also seen an increase in promotional spending from well-known companies such as Coca-Cola, Pepsi, [http://en.wikipedia.org/wiki/Visa_Inc. Visa] and Budweiser, who have all decided to invest time and money on football in the US. The upsurge of football into mainstream consciousness has also seen broadcasting networks spend hundreds of millions of dollars on media rights for the World Cup (National Soccer Coaches Association of America, 2010).

Similar increases in popularity were seen throughout most of Europe, with most nations embracing the game in the early 1900’s. Between 1910 and 1925, Spanish football grew from middle-class fun into an immensely popular sporting activity (McFarland, A 2007). During the 1910s, Spain’s industries and economy quickly developed because the nation’s neutrality during the First World War. In this positive economic climate and as the nation’s urban population expanded rapidly, football became a regular part of Spanish culture (McFarland, A 2007). Almost 100 years on, research has discovered how many Spanish Primera División Clubs are struggling to keep up with business as it continues to grow. Barajas & Rodríguez (2010) have found that under recent changes to Spanish law, nine clubs were considered insolvent. The race for trophies has almost forced clubs to use money they don't have in order to procure more talented players.

Australia
Despite the apparent lack of football culture (Foster, C 2010), football has been played in Australia since 1879 (Trove Australia, 2011) and the oldest existing club, the Balgownie Rangers, is still competing since its formation in 1880. In 1913 the first attempt at a football federation was made (Trove Australia, 2011b) but it wasn't until 1921 that Australian football had its first fully functional governing body, by the name of the Australian Soccer Association. In the 1950’s and 60’s, football’s popularity grew amongst the various European immigrant communities and club names often reflected the players' cultural background. The Czech club was 'Prague', the Jewish was 'Hakoah' and the Italian was 'Apia' (Powerhouse Museum, 2010). The late Johnny Warren named his memoirs “Shelias, Wogs and Poofters”, illustrating the general public’s perception of footballers around this time (Warren, J 2002).

In 1977, the first national competition was established; the National Soccer League (A-League History). It ran for 28 seasons under various names, until 2004, where national competition went into hiatus for almost 18 months. This was partially due to decreasing levels of sponsorship, as well as the Independent Soccer Review Committee publishing a report in 2003 on the governance of football in Australia, commonly known as the Crawford Report. Initially, the report was dismissed by Soccer Australia, but after threat of funding being cut by the Australian Sports Commission, a majority of the board resigned (Vincent, M 2002). This brought about many changes to football in Australia. Soccer Australia, having been established in 1995, was disbanded and in 2003 the governing body was once again named the Australian Soccer Association, with Frank Lowy appointed as chairman. In 2005, the name was changed to Football Federation Australia to align itself with general international usage of “football” instead of “soccer”. They also formed the current professional competition, the A-League, which kicked off on August 26, 2005 (A-League History).

Since the formation of the new governing body and establishment of an elite national league, there has been unprecedented growth in popularity in several Australian cities (Warren, I and Hay, R 2010). In 2006, the FFA signed a seven year, $210 million deal with Fox Sports for exclusive rights of all A-League matches and Socceroos home qualifiers, and SBS bought the rights (directly from FIFA) for the 2010 and 2014 World Cup Finals (Sports Business, 2008) Due to some public discourse, Communications Minister, Stephen Conroy has placed all Socceroos matches on the anti-siphoning list from 2014 onwards, stating that “Socceroos World Cup qualifiers are of national importance [and] these matches should be available to all Australians” (Sports Business, 2008). In 2009, a national curriculum was launched, unifying every state, every club and every association (Foster, C 2010). The curriculum meant governance of Australian football could be more effective and the coaching of players would be united across all states and territories.

Business and Politics
The current state of football in the world, and in Australia, proves that football has become big business. There has been widespread growth in the commercialization, consumption and popularity of football over the past few decades (Cornelissen, S 2011) and the influence of business and politics on football is substantial and it is clear to see that without this influence, football would not be what it is today.

The business world covers a wide variety of aspects, from management, marketing and finance (Schwarz, E. C. & Hunter, J.D. 2008) and involves business owners, employees and consumers. In sports management and administration, the same business principles apply, where the planning, organising, directing and budgeting of a sport at all levels of competition is critical to the success of a sport.

Politics also play a pivotal role in the success of a sport. Politics is simply the “social relations involving authority or power” (die.net) and it’s arguable that these social relations have the greatest impact on the sport. Business and politics are so closely related that in regards to sport, when you mention one, the other is almost certainly involved. Business cannot be conducted without an authoritative body managing relations and governance, nor would politics or relationship management be needed if sport was not considered a major industry.

International
In present-day football, clubs are often seen as an international brand; “a name, a word, a sign, a symbol” (Kotler et al, 2000, p.478, via Richelieu et al, 2008) and not just a sports team. The value of the brand is measured as brand equity. It is defined by Kotler (2002, p.470, via Richelieu et al, 2008) as being “based on the extent to which it has a high brand loyalty, name awareness, perceived quality [and] strong brand associations”. Clubs, especially those in Europe, have reached such a high point of internationalisation, that they have become household names in foreign countries. According to Richelieu, Lopez and Desbordes (2008) internationalisation in sport is relatively standard and sports gain fans and media attention from all over the world. It is also argued that being a brand is the most important asset for a sports team (Bauer et al, 2005) and fans often see the team as an extension of themselves. This emotional connection with sports team is one of the reasons it’s believed sports branding is so important. Accompanying emotional benefits of supporting a team, are tangible benefits, such as the feeling of success after a win or the purchasing of merchandise and other affiliated commodities (Burton & Howard, 1999). For a club to be successful as a brand and as a business, they need to take advantage of the emotional relationship it shares with its fans; however on-field success is the first step in developing a strong brand (Waltner, 2000).

Australia
In a general sense, there were a few steps the Australian sports industry took to get it to where it is today. In its humble beginnings, sport was a recreational and cultural practice played for fun and organised by volunteers (Marriage, S 2011). An increase in commercialisation saw more revenue streams open up, meaning staff and players could be paid for services, and the value of sport attracted sponsors and crowds; this lead to specialised sporting markets which in turn lead to bureaucratisation and governance of sport (Marriage, S 2011). The structures of sport were more complex, administrative control was established and a business-like set of functions established for marketing, coach and athlete development and finance (Marriage, S 2011). The last step in sport’s transformation is the corporatisation of the industry; brand management is now increasingly important to sports and clubs, revenue is dominated by sponsorship and broadcasting rights, a formal industrial relationship model is in place for contract negotiations and collective bargaining was established. This required the government to regulate the industry a lot more, to ensure not only players’ safety, but the safety of staff and supporters (Marriage, S 2011).

Football as a business is still in its infancy in Australia. There was a push in the early 1990’s, especially by the Professional Footballers Australia (PFA), the player association started by NSL player Kimon Taliadoros, to have a better regulated and more professional working environment for players and staff (PFA, From A Joke…, 2010). The main goals of the PFA were supporting the players and building the Australian football industry into one respected throughout the nation and the football world. They followed the influence of Rugby League at the time (Dabscheck, 1994) and sought directions on how to negotiate with Soccer Australia and obtain an award wage for players and a fair player transfer system. Today, the PFA still negotiates player wages with the FFA, most recently securing a collective bargaining agreement for all A-League players (PFA, A-league Collective Bargaining Agreement 2008 – 2013, 2010.

FIFA and the World Cup
FIFA are the peak governing body for international football. They are responsible almost everything football-related, including rules, regulations and the organisation of events. The main event in FIFA’s calendar is the World Cup. FIFA ensure the competition runs as smoothly as possible, from the selection process of the hosting nation, to the awarding of the Cup to the winners of the final. Recently, FIFA has received negative media attention when there were allegations of bribery and the selling of host selection votes by FIFA committee members (Al Jazeera 2011). After the Sunday Times published an article, investigations were carried out and it was found that two members had indeed offered to sell their votes for large sums of money. Sepp Blatter, FIFA’s president, wrote a letter which was published on FIFA’s website, stating the negative impact that the article had created on FIFA and on the bidding process (Al Jazeera 2011). Keir Radnenge, a columnist for World Soccer magazine, told Al Jazeera that the bidding process was vulnerable to corruption and there was opportunity for an “unnecessary amount of politicking, persuading, dealing, and speculating” (Al Jazeera 2011).

Despite politics shining a negative light on FIFA and the World Cup, there have been positives as well. When it was announced that Qatar would host the 2022 World Cup, it meant it would “open new horizons”. By having the 2022 World Cup in country with an extremely hot climate, research has gone into cost-effective, environmentally friendly ways of keeping stadiums at a comfortable temperature. Recent research has been successful, providing incentive for people to travel to Qatar in 2022, without worrying about the temperature at matches. This can only ensure that more people and more money will enter the country at the time of the competition.

A major benefit to hosting the World Cup is the amount of infrastructural upgrading that is done to comply with FIFA standards. For example, in Australia’s Bid Evaluation Report there were many planned changes to most major cities to ensure the cities could handle the large influx of international supporter. It included renovating stadiums, building new ones, upgrading accommodation close to the stadiums, and upgrading transportation in and around those areas. By developing the amenities the host nation has it ensures that it will be competent host and after the World Cup, the financial advantages of new infrastructure will be of continual benefit.

Conclusion
It’s clear to see why football has become so popular across the world. At first it was just a game enjoyed by people on the streets or on ovals. It wasn’t until business and politics were introduced that football really took off. The influence of business and politics on football is the main reason why today people are paid millions of dollars just to maintain the standards that have been reached by the sport, not to mention kick a ball around for 90 minutes every week. Without the influence of business and politics, we wouldn’t have teams that needed management, marketing or financing; nor would we need someone at top regulating the way business was carried out. If it wasn’t for business and politics, football would not exist in the way it does today.

Presentation
This link will take you to my presentation on YouTube. An abstract can be found in the video description, along with references in the presentation itself.