Sports Integrity Initiative: Transparency International’s Global Corruption Report

Transparency International (TI), a non-governmental organisation that monitors and publicises corporate and political corruption in international development, published its much anticipated Global Corruption Report: Sport earlier this week. According to TI, the report ‘sets out a roadmap of reforms that international sports organisations (ISOs) should implement in order to restore public trust in sport’.

Over 372 pages the report provides extensive analysis and reform recommendations for sport, some which it says ‘can be put in place very quickly’, while others will ‘require a more incremental consultative approach’.

It’s a beast of a report bursting with analysis from some of the world’s leaders in the field of anti-corruption and sport, and a valuable consultative resource for anyone with an interest in sport around the world, on and off the pitch.

Here, the Sports Integrity Initiative has broken down the six core parts into digestible, easily referenced chunks. Transparency International’s full report can be found at this link: Global Corruption Report: Sport


(1) Governance of sport: the global view

‘Sport has created many heroes – but too few role models.’

Interesting points
– FIFA’s income of US$2.1 billion in 2014 was larger than the gross national income of over 25 countries

– In China, government bodies and sports organisations are known as GONGOs (governmental non-governmental organisations)

– The cost of the 2022 World Cup in Qatar, by some estimates, will top US$200 billion

– About 60 international sports organisations are headquartered in Switzerland, including the IOC and FIFA

– The salary of Sepp Blatter, president of FIFA, has been refused to be released by FIFA. But we do know the salaries of the Secretary General of the UN, the President of the USA and the CEO of Nestlé

– Africa has produced close to 200 (13%) of the medals on offer in the ten most recent World Athletics Championships, nearly five times the total tally of Asia

– The President of Confédération Africaine de Football (CAF), Issa Hayatou, is into his 28th year in charge, following his unopposed re-election in 2013

Summary
Ideals and governance
The opening section uses a personal account of using sport for good as a framework for expanding ‘sport-for-development’ initiatives worldwide, while referring throughout to the concepts of sporting ideals in relation to its governance. The first two chapters (1.1 – 1.2) then introduce the qualities we look for in sport before the next two (1.3 – 1.4) delve into the impact of governance on those ideals, and the need for regulation of that governance.

Specific governance examples
The next few chapters (1.5 – 1.7) look at specific examples of corruption in governance, namely in Asia, Africa and South America. Needless to say, this is not an exhaustive list, and ensuing chapters explore the use of sports as portals of corruption in smaller footballing nations (1.10), Azerbaijan (1.11) and the state-sanctioned corruption through sports clubs and the building of sporting facilities in Hungary (1.12).

Combating corruption in sports governance
The final couple of chapters (1.13 – 1.14) combined with a handful earlier on (1.8 – 1.9) in this section offer a more optimistic note on how to combat corruption in sports governance, lined with examples of good practice. Chapter 1.9 in particular is dedicated to the solution, not the problem, citing ‘Examples of evolving good governance practices in sport’ as its headline, taking examples from netball, badminton and rugby governing bodies across the globe. 


(2) Money, markets and private interests in football

You have created a monster.’

Interesting points:
– A proposal asking FIFA officials to establish a limit on the mandates for themselves was unapproved

– The Brazilian Football Confederation (CBF) signed a secret contract with Saudi Arabian investors, giving them the full right to organise, explore and benefit from over 100 games of the Brazilian national side until 2022

– In the British professional football leagues, a total of 34 clubs are now owned by offshore companies (25% of the country’s professional football clubs)

– According to Deloitte, the 20 highest-earning football clubs in the world earned, between them, over US$6.7 billion in 2013/14

– Louis Tomlinson, of One Direction fame, failed along with a co-investor to pass the Football League’s fit and proper person test to become a co-owner of Doncaster Rovers

– Expenditure for international transfers reached new highs during the two last calendar years (pre-2015): US$3.98 billion in 2013 and US$4.06 billion in 2014

– In June 2011 50% of the players employed by the clubs of the five major European leagues were clients of just 83 individual agents or agencies

– Third party ownership (TPO) – the ownership of a player’s economic rights by third-party sources, such as football agents, sports-management agencies, or other investors

– TPO is considered a risk so significant to players, clubs and football’s integrity that a global ban was imposed by FIFA

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Summary
With FIFA’s Presidential elections this Friday and the scrutiny of football’s governance that comes with it, there’s little surprise that the world’s most popular sport has a section all to its own.

FIFA’s influence in football, alongside that of marketing companies, is the topic of the first chapter (2.1), while the administration of the game in the UK comes under scrutiny in chapters 2.2 – 2.3.

A less widely discussed issue is the focus of the final three chapters (2.4 – 2.6), which assess the risks of corruption in the transfer of players, including the commercial exploitation of players through ‘third-party ownership’, in which a third party, other than a club or player or anyone directly involved in a players transfer, has a stake in that transfer. The final chapter (2.6) in particular hones in on the widespread practice of third-party ownership in South America, and whether FIFA’s new prohibition of the practice will be realised.


(3) Events in the spotlight

‘Sports events remain primarily what they have always been: great spectacles.’

Interesting points:
– Of about 360,000 accredited personnel at the London 2012 Olympic Games, fewer than 3% were athletes

– The number of athletes at the Summer Olympic Games has remained ~10,000 for the past 20 years, but the number of media representatives has almost doubled, while that of security personnel has trebled

– The Olympic Games have an average cost overrun of 79%

– Tokyo supposedly spent US$150 million in its failed bid to host the 2016 Summer Games

– In the year before the 2010 FIFA World Cup the average profits of the ‘Big Five’ construction companies in South Africa rose from US$25 million in 2004 to US$200 million in 2009

– A corruption formula, by Robert Klitgaard: ‘corruption = monopoly + discretion – accountability’

– The private security company G4S was selected at a cost of US$398 million to provide security guards for the London 2012 Olympic Games

– Just ~21% of the total Sochi Winter Olympics spending (reportedly ~US$50 billion, the most expensive in history) is thought to have been directly related to sport

– A year after the Sochi Winter Olympics, according to a survey by the Russian Public Opinion Research Center, 75% of Russians said they would still support the holding of further sporting mega-events in the country

– For the 2014 FIFA World Cup final in Brazil, there were no fewer than 25,000 police personnel in Rio de Janeiro, and 19 activists were arrested on the eve of the match

– In 2014 Munich, Oslo and St Moritz all withdrew their bids for the 2022 Winter Olympics following negative referendum results and concerns about mounting costs

– The clubs of the Spanish First and Second Divisions collectively made more than US$1.1 billion from rezoning by 2008

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Summary
This section focuses on the hosting of major events and the economic and other impacts of these events on a city and nation, before analysing the use of these events as proxies for corrupt practices from both within the public sector and beyond.

Mega-events
Chapters 3.1 – 3.3 look at the impact and problems of hosting major sporting events and the side-lining of sport as the major focus of events.

‘The unanimous message of studies before events is that they stand to generate jobs, additional tax income and economic growth for the host region; this is a claim that almost never materialises,’ writes Martin Müller in the first chapter. Not only is the economic impact assessed, but also other non-tangible factors, before coming to the unfortunate conclusion that most large events ‘overpromise’ but ‘underdeliver’.

Olympics Games and FIFA World Cup
Chapters 3.4 – 3.5 zero in specifically on the bidding processes around the Olympics and FIFA World Cup, and the corruption that taints it, namely the limitless exploitation of bidding cities by the self-interest of those within FIFA and the IOC. Stefan Szymanski writes that these events are ‘inherently prone to corruption risks’ before offering solutions of ‘greater transparency’, before adding that it is ‘unlikely that the accusation of corruption, and perhaps the reality, can ever be completely removed’.

Preventing corruption at mega events
There is a more hopeful outlook from Chapters 3.6 – 3.7 where it’s offered that it ‘may be possible to identify ways in which the risk of corruption could be managed better in sports mega-events’, before offering suggestions of those ways.

Examples of corruption and mega-events
Chapters 3.8 – 3.15 look more at specific examples of these major events and how we can learn from past events, or events yet to go ahead but whose preparations are already underway, to improve future events. Examples include:

– 2010 Delhi Commonwealth Games
– 2012 London Olympic Games
– 2014 Sochi Winter Olympics
– 2018 World Cup in Russia
– 2022 World Cup in Qatar

Taking advantage of sporting events
The final chapter in Part 3 looks at corruption by powerful sporting clubs in collaboration with local authorities. It focuses on a case study of Spanish football clubs and the rezoning of public land to create huge, and illicit, profits for the clubs and public authorities, before calling for the ‘creation of a state agency that monitors urban planning, as well as a reformulation of urban-planning laws’ in Spain.


(4) Match-fixing

‘The war against match-fixers is being lost.’

Interesting points:
– One proposition for a ‘practical solution’ against match-fixing: to create an independent, anti-corruption agency for sport

– The gross gaming revenue (GGR) of the regulated sports betting market was estimated at US$58 billion in 2012 and is forecast to reach US$70 billion in 2016

– In a TI survey of Lithuanian sport, 15% of football players and 21% of basketball players admitted to having been personally approached to agree to fix matches

– Football did not start to tackle match-fixing seriously until 2009, when the big European football betting scandals were uncovered

– Most of the current match-fixing prevention programmes start with athletes from 15 or 16 years of age

– In 2010 the Finnish professional football players’ association (JPY) established a working group to design a mobile application against match-fixing called the ‘Players Red Button’, allowing players to report information about match-fixing cases anonymously and securely

– In Portugal, TI surveyed 1,185 referees of amateur, professional and international competitions about the perception of the problem of match-fixing; the respondents believed that as many as 8/100 referees participated in match-fixing

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Summary
The section starts with an introduction (4.1) by investigative journalist Declan Hill, which solemnly begins with ‘Why sport is losing the war to match-fixers’, Hill emphasises that match-fixing has been present since sport’s inception, but highlights the unfettered globalisation as the biggest challenge that the fight against match-fixing is facing, and losing.

Hill claims that the fight against match-fixing has been ‘misdirected’, through a combination of ‘commercial agendas, conflicts of interest and ignorance’ and calls for a return to ‘evidence-based work’. Hill’s solution, in a nutshell? To created an ‘independent, anti-corruption agency for sport’, akin or ‘linked’ to the World Anti-Doping Agency.

The section then goes on (4.2 – 4.5) to highlight the role of the betting industry, sports governing bodies, political institution and the role of public perceptions in tackling the practice.

This is followed by chapters (4.6 – 4.9) offering methods and policies to combat match-fixing and how to learn from previous attempts, as well as outlining ways to prevent the practice before it even occurs.


(5) The US model: collegiate sports and corruption

‘The United States is the only country in the world in which colleges and universities stage mass athletic spectacles for commercial gain.’

 Interesting points:
– In 40 of the 50 states in the United States the highest-paid public employee is the head coach of a collegiate athletic team

– Students of colour are over-represented in the sports of football and basketball and under-represented in most other National Collegiate Athletic Association (NCAA) sports

– The 128 members of the highest subdivision of NCAA’s elite Division I, the Football Bowl Subdivision (FBS), had annual budgets varying from US$10.7 to US$138.2 million in 2012

– Only 2% of all NCAA members operate at a profit. All of these were FBS members

– The NCAA invented its own graduation rate definition, which is less rigorous and not comparable to the federal definition of graduation rate.

– College sports programmes in the US, especially in basketball and football, take in approximately US$11 billion annually

– The United States is the only country in the world in which colleges and universities stage mass athletic spectacles for commercial gain.

– In 2013 the athletic programs in higher education accounted for an estimated US$6.1 billion from revenues

– Women are minorities among coaches of women’s teams (43%), and are hardly represented at all (3%) among coaches of men’s teams

– In 2010, at the University of Notre Dame, the campus police were not allowed access to a football player who had been accused of rape because he was in athletics department facilities

Summary
Acknowledging that US collegiate sport is a unique model, this section looks at the relationship between a country’s educational system and a financially well-supported elite sporting model which is integrated into it. The opening chapter (5.1) focuses on two sports, basketball and men’s American football, and the staggering amounts of money these sports involve, mostly without generating a profit.

Chapter 5.2 addresses the issue of academic fraud and commercialised collegiate athletics in a particular example, that of a long-running University of North Carolina – Chapel Hill (UNC) course scheme. The next chapter (5.3) addresses the evolution of professional college sport in the US and the ballooning revenues that it produces, despite those athletes remaining ‘amateur’, receiving only room, board, tuition and fees as compensation. Combating the infringement on academic integrity that this relationship generates is a particular focus.

The final chapter (5.4) deviates from the financial focus to examine what it calls ‘a pattern of inequality, discrimination and abuse’ rife throughout US college athletics, as well as offering remedies and ideas to combat these issues.


(6) The role of participants: within and beyond the sports family

We need to change because sport today is too important in society to ignore the rest of society.’

Interesting points:
– The ‘Olympic Agenda 2020’ is the ‘strategic roadmap for the future of the Olympic Movement’, launched by IOC president Thomas Bach in 2013

– The Convention on the Manipulation of Sports Competitions (CETS no. 215), introduced by the Council of Europe in 2014, is the only rule of international law on the subject

– The first International Conference of Ministers and Senior Officials Responsible for Physical Education and Sport (MINEPS) was convened by the United Nations Educational, Scientific and Cultural Organization (UNESCO) in 1976. The most recent was MINEPS V, held in Berlin in 2013

– The 45 main international sporting associations headquartered in Switzerland contributed an average of US$1.16 billion annually to the Swiss economy between 2008 and 2013

– In the ten years following the introduction of a Bankruptcy Law in Spain for sports clubs in 2003, 22 Spanish clubs have entered administration

– In the 2010 financial year, the net debt of Europe’s top divisions was an estimated US$7.8 billion, while owner and benefactor capital injections were an estimated US$3.8 billion

– Of 36 sports journalists interviewed in a study, almost 1/3 were required by their organisational guidelines to mention commercial aspects in their published articles

– One study shows that more than one-quarter of the articles in an analysis of 4,103 newspaper and online sports stories contained business, sponsor or product placement mentions

Summary
‘Sometimes ‘good governance’ is a concept used as a positive alternative to the word ‘corruption’, a euphemism or a means of avoiding the term,’ writes Stanislas Frossard in the section’s second chapter, highlighting the fact that one of the first challenges in tackling corruption, is identifying where and what it is.

This final section provides a form of collective summary of the report, looking at the ways of preventing corruption in sport and the erosion of its core principles by the various interested parties – sporting bodies (6.1 and 6.4), governments (6.2), non-governmental organisations (6.3 and 6.12), supporters (6.8), participants (6.6 – 6.7), sponsors (6.5), big business (6.10) and sports clubs (6.11), as well as news organisations (6.10 – 6.11).

Chapter 6.9 is brief but concise in highlighting the importance of a collaborative effort against corruption and the like, in this instance using the high profile campaign against discrimination in English football ‘Kick It Out’ as a framework for similar campaigns in other countries and sports.

Chapters 6.10 and 6.11 in particular highlight an issue that is rarely covered by the press because it involves and analysis of their own conduct – deficiencies in the manner in which the press cover sport. Faced with increasing interests from big business in news organisations (6.10) and the creeping presence of sports teams’ public relations staff ‘covering teams through their own websites, and pitching that material as virtually indistinguishable from the mainstream media’s work’ (6.11), sports journalists are quickly finding themselves locked in an evolving industry which, if they’re not careful, will undermine their efforts, however good intentioned, to inform the public in an impartial and truthful manner.

The final chapter (6.12) is a wrap of TI’s work over the years in the field of corruption and sport. The organisation’s branch in Germany first established its Working Group on Sport in 2006, and the chapter highlights how quickly the field has grown in just the last decade, through globalisation, increasing monetisation and increased media coverage.

The end note is a positive but serious one; ‘Sending a strong anti-corruption message within and through sport may prove a cornerstone in the fight for a world free of corruption.’ Sport and corruption have existed in tandem since the beginning, but new challenges are constantly evolving; this isn’t a new field, but it’s one in which the efforts to combat corruption need to evolve with it.

• This article was originally published in the Sports Integrity Initiative internet journal on 26 February 2016. To access the original, please click here.

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