Money and sport have been an inseparable couple since the 2000s. This fusion began in Antiquity and really took off in England in the 19th century. The sport became professionalized and allowed runners like Allardice Barclay or Abraham Wood to live from their passion. This market just arrived in France at the beginning of the 20th century and then spread internationally from the 1980s. Even if it has been accepted by the International Olympic Committee (I.O.C.), never before has the Olympic motto Citius, Altius, Fortius taken on so much meaning to designate the flourishing economy of sport. Nevertheless, this couple raises questions. Indeed, can we consider sport as a commodity subject to the economic model of supply and demand? Do the salaries received by high-level athletes not distort the values of sport or even the Olympic motto? Especially in England, the economics of sport has a meaning since it aims at estimating the economic weight of sport and not at defining it as a simple creation of wealth. The economic concentrations of sport and all its derivatives such as press articles, television broadcasts (we can talk about the 114.4 million viewers at the 2015 edition of the Superbowl) require economists and analysts to mobilize a very particular reflection on the impact of sport. In this reflection we will study the commercial aspect of sport and we will ask ourselves if “is sport a commodity like any other?” If in a first moment, we will corroborate the idea that the sport is indeed a commodity subjected to the economic laws, we will have to ask ourselves if it is indeed an economic product similar with for example the oil which can be resold to him to possibly draw a profit from it. Finally, we will determine under which conditions sport can be considered as a real commodity similar to all others.
Pierre de Coubertin
It could be argued that sport is a real commodity and that it is subject to the laws of the market. In fact, according to the report of the Economic, Social and Environmental Committee, “sport is not a private matter, and the public authorities have always been interested in it”. Sport is a social activity that demonstrates a general interest and is supported by public funding from municipalities or states. Moreover, the attractiveness of sport is reflected in the 114 sports federations where more than 16 million members in France represent an economic value of 21.8 billion euros. It should be taken into consideration that some practitioners are recognized as professionals and others as simple amateurs. Professional sport is most often perceived as a supply that generates demand. This is proven by the World Cup soccer tournament, where the Fédération Internationale de Football Association (F.I.F.A.) produces the event and markets it by selling tickets to attend the matches, selling jerseys and even replicas of the trophy. Thus, sports events are an important part of the sports economy, as their benefits and costs are evaluated. Let’s take the current example of the 2020 Olympic Games in Tokyo. Following the epidemic of Covid-19, the Japanese Prime Minister Shinzo Abe announced the postponement of the Games while the I.O.C. categorically refuses its cancellation. The total cost of the organization is estimated at 11.5 billion euros and according to the economists of SMBS Nikko Securities the postponement would have a negative impact of 5.5 billion euros on the Japanese GDP. The absence of this event would also affect foreign consumption and deprive Japan of the revenue initially expected. We find here the fluctuating character of a commodity following an unforeseen situation. The state is one of the actors with the largest share in the sports economy. Like all goods, sport is controlled. Whether it is through anti-doping controls, corruptions, rules of taxation are defined in order to avoid financial drifts. This is particularly true in cycling, and let’s take the example of the Tour de France. Because of cheating such as the implementation of small engines in the bike or doping, the organizers of the Tour have decided not to let athletes accused of cheating race in order not to taint the values of the sport. This situation is also found in the Russian athletes at the Olympic Games because they are no longer competing for Russia but under the Olympic banner.
Let’s now look at the monopoly of this commodity and more specifically by sponsoring and media. The struggle to control the broadcasting of sport is becoming more and more important. Sport feeds television and is fed by a growing share of the revenues in return. On the occasion of major sporting events such as the World Cup or the Superbowl, the channels do not hesitate to broadcast advertisements for astronomical sums. (186,000 euros per 30 seconds for the 2014 World Cup final, 4.5 million dollars per 30 seconds during the 2015 Superbowl). Sport appears here as a luxury product and very coveted by the media. This relationship between the media and sport is increasingly fused. Indeed, for some channels like Eurosport, Canal plus sport or Beinsport it comes that if this link is broken, it will be the end for them because they survive only by the sport. We can note currently the inclination of the contents because of the stop of the sports competitions because of the Covid-19. Thus, we have here the sport which is like a currency but which would lose value because of the epidemic and which forces its channels to propose contents more focused on the oldness of the sport and not on the actuality. This phenomenon of recession occurs in the stock markets and the CAC 40 which lost 5.75% to 3,881.46 points which is its lowest level since 2013. Let’s talk about sponsoring which is a financial or material support given to an event, a team or a sports federation. Sponsorship is a means of communication using sport as a currency to promote items, products sold by the brand. This allows the company to promote itself to sports consumers and to persuade the sporting public to demonstrate the tangibility between the sport and the company. More and more soccer stadiums are using naming. This practice consists in renaming a soccer stadium into a brand of real estate group, communication company. (Stade Gerland -> Groupama Stadium, Vélodrome -> Orange Vélodrome) This technique allows the club to obtain a significant financial gain (2.7 million euros per year for the Marseille club, 5 million euros per year for the Lyon club) and in return to make the company known on an international scale (Companies turn to high level clubs participating in European competitions). Through these examples, sport is like a commodity that the biggest companies and brands try to seize in order to extend their image.
Allian Arena in München
If all these examples allow sport to be part of an economy analyzed and followed by many economists, we must return to the economic dimension and re-evaluate it in the light of the consideration of sport as a right and not a commodity.
One could indeed object that sport has precisely no market value but is rather articulated around values and morals. From a political point of view, sport seems to be underestimated and should be at the heart of emancipation. Sport is a school of citizenship, its first function was based on pedagogy, education and personal development. But since the arrival of money in sport, it creates an imbalance between amateur and professional athletes. This upsets certain ethical and moral principles because money destroys all human and sporting logic. Taking the example of the Tour de France, some athletes do not hesitate to dope because they are encouraged by the money. Especially since some journalists promote the legalization of doping in order to make sport more attractive. We have here a consideration of the neglected values of sport and health. This shows that sport is going out of its essence, which was based on sharing, solidarity and surpassing oneself. The massive arrival of money has benefited the main actors, i.e. the athletes. When an economic crisis occurs, such as the subprime crisis or the explosion of the real estate bubble in the United States, it can influence the economy of sport. A study was conducted by Éric Barget and Jean-François Brocard on the impact of these crises on soccer and transfers. The impact has been transmitted via the stock markets and the foreign exchange markets and has led to a decrease in the resources of the clubs. However, due to digitalization, television broadcasts, or the monopoly of sport in general, one can ask whether sport has negatively impacted the clubs and whether these stakeholders have not rather absorbed the financial difficulties. Relying on the evolution of the budget of European clubs between 2007 and 2012, the majority of clubs have seen their budget increase by 20%. Nevertheless, within the championship, the gap in the French championship amounted to 30 million euros, but following the arrival of the Qataris at the head of Paris Saint Germain in 2011, this gap has increased and reached 110 million euros. We can therefore note following these studies that sport (we can hardly rely on a single sport) does not really know the crisis and that it has rather revived. This argument confirms that sport wants to be independent of other goods and isolates itself from the financial markets.
PSG X QATAR
Let us now study the teaching and institutionalization dimension of the economics of sport. Sport has always been taught and developed in relation to the social sciences. The first course was given in 1978 at the University of Limoges and saw a multiplication of courses in the UFR STAPS, the specialty “Globalization of the economy of sport”. This evolution has been consolidated throughout Europe during the 2000s. This learning for this discipline shows that sport itself needs to be fed by money or by scientific research. Through this interest in science, sport is at the service of the economy. Sport generates employment with an increase of 17% since 2010 but also precariousness because 30% of educators are on fixed-term contracts, temporary work or apprenticeships. Sport is a social factor, which on a country scale does not show all its benefits. In the less developed countries, sport has benefited more the elite of the nation and not all citizens. This is due to the shortage of coaches and sports facilities. However, it is important to note that sport itself cannot lift a country out of poverty. However, it can help by bringing about social change as stated by Richard Attias, Moroccan businessman and former president of Publicis Even Worldwide.
It was thus possible to establish the link that sport seems to be antinomic between money, merchandise and passion, right, institutional.
But we must now try to define the conditions for considering sport as a commodity. Going back to the definition of a commodity, it is a good that can be bought or sold. A commodity is generally subject to laws for its transport, its ethics. We can see that these goods can be controlled by states, companies or lobbies that have full power over these goods. By considering sport as such, we realized that there were similarities such as the regulation of sport by anti-doping controls, organizations against corruption. Moreover, some clubs and stadiums are owned by companies such as the Russian Dmitri Rybolovlev, who became the biggest shareholder of the club A.S. Monaco. The value of an asset fluctuates according to different factors such as economic crises, demands. The fluctuating nature of sports has been studied through the subprime crisis, however it has not been impacted in the same way as a commodity since it has seen its value increase. Communication technologies, digitalization and the enthusiasm generated have allowed sport to remain in the long term and not to experience difficulties.
We have thus been able to demonstrate that the thesis initially stated that sport appears as a real commodity subject to rules but that it is not without ethical consequences. The economy of sport can appear as a capitalist system in which everyone tries to make the most of it. This economic model goes against the famous idealist expression of the humanist Pierre de Coubertin: “The important thing is to participate”. This morality seems to be alienated by “the important thing is to win, no matter what the means, legal or not”. However, the regulation, the controls made by the World Anti-Doping Agency allow to moralize these practices. For example, the introduction of the Financial Fair Play in soccer is a French initiative that aims to fight against excessive spending by professional clubs. And finally, as Mike Tyson said, “I’d rather be first and nothing in my pocket than rich and in second place.”