Tuesday, July 13, 2010

Conspiracy Sports- The Economics of Football

In the wake of a spectacular finale to the much anticipated event of the decade, another world cup has finally come to an end. An era for the underdogs, Spain managed to successfully scale the ladder and not only participate in its first world cup final, but also go on to win it, upsetting the 3rd-time-no-charm Dutch team and in the process, lifting the spirits of the Spanish Nation.

To the victor shall go the spoils of war; and a war it was that day.

However, I am not here to delve into the physical attributes of the game, I spy with my all seeing eye, a trend of sorts in sports.

As many, or most, or few know, Spain is one of the countries dubbed the PIGS nations. That is no insult, wait, it is an insult, however it is merely an acronym for the countries that are on the brink of economic collapse; Portugal, Ireland, Greece, Spain.
The BBC article on Spain’s celebrations had an interesting passage, here is an excerpt:

It is the first sign that perhaps the huge feel-good factor provided by this win can help Spain's struggling economy.

The team's victory has certainly lifted the nation, at least briefly. With mass unemployment and recession, Spaniards have not had much to smile about recently.

Another article reads:

In Spain unemployment continues to edge up. It is close to 20% and is more than 40% for those aged between 16 and 24. The International Monetary Fund forecasts that Spain's economy will shrink this year by 0.4%. It is struggling to emerge from recession. Spain has a budget deficit of 10%.

In the private sector there is still huge debt, some of which may have to be written off. The Spanish good years were built on a housing boom. It was, for a time, the biggest creator of jobs in the EU. The burst bubble has left behind an injured coastline, 800,000 unsold homes, and companies burdened with debt.

A question to ponder, how is it that, a team as rich, diverse, talented and drive as Germany’s young squad, claiming victories of 4-0, 4-1, 4-0 on Australia, England and Argentina respectively, could lose 1-0 to Spain? Some may argue the pitch decides, there are a myriad many more factors etc. Germany were the fan-favourites to go on to the finals this year, no one ever suspected Spain.

Is there an invisible hand that drives and manipulates the games? Could this be the conspiracy of the century? I have other facts, albeit they all loosely tie together, I shall weave this intricate portrait and let you draw your own conclusions.

To answer the first question, FIFA, the Fédération Internationale de Football Association.

This year, FIFA’s stranglehold on countries and politics was made eminent on two separate occasions, they’re rebuffing of France’s inquiry into the dismal performance of its world cup squad, as well as their reversal of President Goodluck Johnsons decision to disband Nigeria’s squad for two years pending an inquiry.

Sports = Revenue, not just for the players; there are international referees, endorsements etc. it is a multi-trillion dollar industry, and FIFA has sole bragging rights, a monopoly on international sports. Blatter, or one of his predecessors, stated that they provide people with the “commodity” of football, not the sport.

In global terms, FIFA is a source of income and wealth for all participating nations, much like the World Bank and the IMF (International Monetary Fund), however, in ranking the strictness of policies, FIFA holds all the cards, followed by the IMF which basically purchases controlling interest by giving loans to “rich” countries and setting certain covenants on how the debt is to be repaid, last but not least, the World Bank, the poorer nations source of funds. That is basic economics.

On every continent, in every country, FIFA has a foothold, referred to as CONCACAF in North America, CONMEBOL in South America, UEFA in Europe, CAF in Africa, AFC in the Asia and OFC in Australasia.

One case is not enough to be a conspiracy. Correct. So let us examine two other cases.

First, Euro-cup 2004, Greece upset Portugal and won; its first international victory in its history in lieu of Athens 2004 (The Olympics). The Greek economy was not struggling at the time; they already had Athens 2004 in the bag. What of the expenses required in setting up Athens? Could they possibly have been financed through the Euro-cup victory? Is it not a possibility, that in light of winnings awarded to teams, countries, economies, also share a piece of the proverbial pie?

Greek Celebrations in Athens

FYI The world cup payoffs this year:

1st place: €30million

2nd place: €24million (or 25, disputed reports heard on TV)

3rd place: €20million (or 15, disputed reports heard on TV)

4th place: €18million

3rd round knockout: €14million

2nd round knockout: €9million

1st round knockouts: €8million

One could argue that the euphoria of hosting the Olympic Games fuelled the excitement that made Greece’s miraculous victory a reality. Again, I say, what if?

In terms of marketing, being a country that hosts the Olympics, along with also winning the Euro-cup a few months previous, further adds to the country’s worth.

Second, African Cup 2006, Egypt claims another victory, in wake of the tragic sinking of the Egyptian ferry in the red sea, and the loss of 1600 lives. Egypt is an economy that has been subsiding on 40% of its true income, as the rest is lost, stolen or squandered by the Powers-That-Be. Adding to that, the death toll of the sinking ferry, Egypt was in need of a respite. Hosting the games, and effectively winning. Their previous victory in 2004 not withstanding, the hand that feeds decided that that year, the victory should quell the tragedy.

All in all, the world revolves around Marketing. Everything is a product, everything is an endorsement, money makes the world go round.
To every rule, there is an exception, this could be naught but a whisper in the wind, however,,,

What If?

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