How much of the current “public” sports structure would survive without a single penny of subsidies form the state? Olympic games? Soccer World Cups? Leagues? Pretty much all existing competitions and teams financed though publicity revenue, or just local teams playing for fun?
It’s impossible to know. Maybe just local. Maybe even more than now. Who knows how people like to spend their money? And most importantly: who knows what kind of things people will come up with when creativity and entrepreneurship is unleashed through the abolition of IP and licensing/regulation.
Many of Spain’s La Liga football teams make large revenues. But, their subsidization make it lucrative to have poor business models. Nevertheless, I think any sports league with big disparities between skills, like many European football teams, show signs of being profitable because this disparity is directly due to a disparity in incomes.
I heard the 96 Olympic games in Atlanta were totally privately funded. Some complained of too much “corporatism”. Most of the pro sports in America such as the NFL and MLB make most of their revenue from TV contracts. So they still should do quite well without the subsidies.
But what about all the people who perform in those games? Was their entire career privately funded, including all the places where they trained? And aren’t all the players trained by national coaches, etc, etc?
Stefbot on the Olympics:
http://www.youtube.com/watch?v=cLxYNM1ziFI
I’m just talking about the Olympic venues. I don’t know about the athletes themselves. I know countries such as China and Russia subsidies the best athletes completely. In the US, it’s more of a voluntary thing. I guess if you play sports at a public school, that would be subsidy. At big-time college football programs, the coach often makes seven figure salaries. But even that is usually funded by the athletic department or indirectly by alumni grants.
There is an IP issue about TV contracts though. Every time a foreign sports channel is showing a UEFA Champions League match my dear government blanks out that channel for me. So the TV contracts would be lower in a free society as they wouldn’t actually grant you a monopoly for broadcasting to a certain geographical area, just the opposite anyone could simply re-broadcast the picture as their own and try to compete with better commentary.
I guess that’s true, but they gotta find a way to subsidize those skyrocketing salaries. Right?
Hey UEFA has to live off something too. It is after all a giant non-productive bureaucracy braking the development of football, so what would we do without it?
Im pretty much certain it would ALL survive.
In cricket, there was a breakaway competition series called World Series Cricket that was created as a commercial enterprise. Players felt they wernt getting paid enought to make a living from playing cricket. It is the typical story where the state held the monopoly, and through entrepeneurship they created a very successful commerical enterprise.
In the old days of football people had to have another job aswell as play for there club, but this was due to no business model being put in place.
Most sports clubs revenue comes from merchandise and ticket sales, so even if there was no TV which is also a major source of revenue there would still be revenue. Fans and supporters loyalty are the ones that ultimately fund these sports. If there was no following for these clubs then there would be no demand for them, and all state subsidies would do is prop up something that nobody would want. However this is not the case, as there is a global following. TV doesnt need to funded by advertising, there is the option of pay-per-view. This had been successful with boxing, Oscar de la Hoya $696 million from pay-per-view, he made $30 million from one match alone! (de la Hoya - Hopkins match)
As for for training new talent, if i were a business owner i would not want the talent for the sport to just dry up, i would invest money in academies for young people and because this would be nurturing talent the chances are that new talent would found and it would contribute to future clubs success. Academys are already in place, if they are subsidies this is just the typical state capitalist demogogues using the safety net of the state for this long term investment.
It was supposed to be a joke.
I expect the olympic games will continue. However the non-state political groups will sponsor their own teams to compete against the state national teams. They may even be used as a form of publicity, those groups with the most prolific athletes as members will attract more membership and so this will create the incentive for sponsorship of athletes.
That seems intuitivly right to me. It seems as if there could be some approximate examples / precedents to choose from, but I can not think of any.
I know, I liked it. But it seems my own quip wasn’t as successful.
I think it would be pretty bad ass if an athlete refused to compete in the Olympics unless he was allowed to represent himself and himself only.
Most of it would fall apart overnight, trust me. Large football (soccer to you Americans) teams may be privately owned but they have come to depend on the State to build and run the giant stadiums they play in, provide security during games and even bailouts. A few years ago a huge scandal swept the seemingly hyper-rich Italian First Series (forgive errors but I am not into sports and I followed the case through economic newspapers) when it was discovered most of the teams were insolvent or downright bankrupt. An emergency law was drafted allowing large football teams to “spread” debts over a ten years period and other assorted fiscal magical tricks that would land an ordinary businessman in jail. Since football is some kind of national religion (and the only thing keeping secession at bay) nobody complained.
Italian sports federations are stinking rich but not because they have a good business model. They get hard cash from the State: they get a percentage out of State-approved betting agencies and lotteries and if that isn’t enough the State will simply move in and provide free gifts. It’s no small wonder so many ex-sportsmen, especially mediocre ones, become politicians and we have so many “professional athletes” even in obscure disciplines not usually associated with big sponsorships and large paychecks. During the recent Vancouver Winter Olympics a minor scandal broke out when it was discovered a figure skater had managed to attend a prestigious private sports academy by getting the State to pay the frankly jaw-dropping bill. The scandal didn’t break out because she managed to get her hands on these funds in the first place but because she performed very poorly. A minister even suggested she should be forced to give the money back because she was “a poor investment”… I hope His Excellency was just cracking a joke! [;)]
How come that Kakugo was the first to mention betting? TV rights and tickets? Come on people, if and only if betting will make it profitable, sports will go on. That’s my take at least.
Very good points but I think this is not universally true. AFAIK In England none of this applies.
Personally I don’t think football would fall apart without the state since as you said it is a national religion in many places but I think it would change. Right now the IP and and the bailouts you mentioned work in favour of the largest clubs which have national or even global reach far beyond its local matches-attending base and which can then throw silly money around. As income from TV rights, from merchandise and from the state dropped and the ticket sales again became the most important income stream you would have much more of a level playing field between the large and the small clubs.
The huge problem is this. (State-sanctioned) betting is a pretty new thing here: until a few years ago you could legally bet only on football matches and horse races and in a very peculiar way. But cash prizes were huge and both systems were immensely popular. But later the State started overdoing the whole lottery system: the new lotto, due to its even larger cash prizes has become unbelievably popular and it literally wiped away everything else. The whole horse race system folded overnight and had to be rebuilt from scratch using State-provided funds. Football bets now pay a pittance: while twenty years ago you could become a millionaire overnight right now a big win won’t get you enough money for a budget vacation. Recently scratch-and-win type lotteries have taken their toll too. In short people have started to shun conventional betting and moved to either huge-money lotto or quick cash scratch-and-win. The State doesn’t care as long as it gets money.
Originally football and horse race betting was envisioned as a way to finance sports: all profits went to the central sports authority (CONI) to be split up among federations. While we may shun at the idea of a State sanctioned monopoly on betting it was surely a better way than forcing hapless taxpayers to pay for yet another unnecessary burden. But sadly money was never enough: federations quickly became very good at milking money, no matter how insignificant their size. Stadiums, being public ventures, always ended up costing princely sums. So other ways of financing had to be envisioned: for example originally the State-owned TV and radio didn’t have to pay for sports rights but as sports costs spiraled out of control they started paying the federations money to broadcast events. Recently, as betting revenues are taking a hit after another, the broadcasting rights have become the main way of financing. And as you may well understand the money for broadcasting rights come from our blood-lined pockets.
I’ll give you yet another example. I live in very small town. We have a small football field, owned by the local council, which is rented out for a symbolic sum to the local sports club. Last year, before the elections, it surfaced the council had big plans for turning the football field into a fully-fledged stadium. It would have cost somewhere in the region of 7 million euros, a mind boggling sum considering the whole yearly council budget is less than a third of that. All to be forked by the hapless taxpayers. Thankfully the previous administration lost the elections and the election winners immediately scrapped the plan. And mind the local football teams are all at amateur/youth level. You can guess how much buildin a stadium for a First Series team may cost.