05 governance of international sports

What is the difference between "government" and "governance"? Why is this distinction important for international sport?

• Government: Hierarchical authority performed by the (preferably democratic) state guarantees the provision of public goods.

• Governance: Interactions of state and/or non-state actors (TNCs, NGOs) that provide solutions to problems related to setting and implementing collectively binding norms and rules for the provision of public goods and services (Börzel, 2011).

• Key point: International sport is not governed by a central government – it is governed through governance involving many actors (IOC, FIFA, national associations, sponsors, etc.) without a single hierarchical authority.

How can we understand institutional dynamics in sport governance? What is the power perspective? What is resource dependency?

• Power perspective on institutions:

  • Institutions are social-political constructions relying on social ties and other modes of governance.

  • The most important variable for understanding institutional stability and dynamics is shifts in the coalitional foundations of an institution.

  • Methodological implication: analyse conflicts and moves among actors.

• Global sports governing bodies have come to be dominated by actors interested in commercialization.

• Power as controversial concept: In this lecture, resource dependency theory is used:

  • Resource dependencies exist where actor i is dependent on actor j, who controls resources critical for actor i's goals (Emerson, 1962).

  • Actors can try to refine or avoid dependencies (Pfeffer & Salancik, 1978).

• Key point: Power in sport governance is not simply "who commands" – it's about who controls critical resources (money, visibility, legitimacy) and who depends on whom.

What tasks do international sport governing bodies (like IOC, FIFA) perform?

• Regulation of the sport and its competitions

• Global development of a sport at all levels

• Development and governance of athletes within a sport

• Arbitration and/or resolution of disputes within a sport

• Holding of global events, such as world championships

• Maintenance of relationships with affiliated national associations

• Maintenance of relationships with public authorities

• Maintenance of relationships with commercial entities (sponsors)

• Key point: They are not just rule-makers – they are organizers, developers, arbitrators, and business partners.

What is the role of the IOC? What is its organizational architecture?

• IOC as contested governing body:

  • Key player in international sport governance, but not a central government.

  • Its authority only applies to the Olympic Games.

  • Problematic relationship with International Federations (IFs) – conflicts over power, money, competitions.

  • Great diversity in relationships: e.g., IAAF (influential IF with own commercial interests) vs United World Wrestling (struggling to survive).

• Organizational architecture:

  • IOC Session: General annual assembly; adopts/amends Olympic Charter; elects IOC President and Executive Board.

  • IOC Executive Board and Presidency: True locations of power; general responsibility for administration and management.

  • IOC membership: Restricted to 115 members; appointed by co-optation.

  • Only recently more representative allocation of memberships to athletes, IFs, and NOCs.

• Key point: The IOC is powerful, but it is not a world government – it must negotiate with IFs, NOCs, sponsors, and host cities.

What is the historical development of the IOC? What triggered its commercialization?

• History:

  • 1894: Founded by Baron Pierre de Coubertin.

  • 1896: First Olympic Games in Athens – huge crowd success.

  • 1920s–1930s: Increased popularity but financial troubles.

  • 1936: Nazi Olympics, boycott debates, beginning of modern presentation.

  • 1952: Soviet participation, beginning of Cold War politics.

  • 1976: Montreal Games – financial disaster.

  • 1980: Moscow Games – political boycott.

  • 1982: Abolishment of amateurism.

  • 1984: LA Games – start of total commercialization.

• Commercialization triggers:

  • 1976 Montreal Games: Loss of one billion dollars; lasting effect on cities' willingness to host (only one bidder for 1984).

  • 1980 Moscow boycott: Made dependence on U.S. TV revenues transparent.

  • 1980: New president Juan Antonio Samaranch – "most powerful man in global sports" – made financial sustainability top priority.

• Commercialization strategy:

  • Increase number of participating nations

  • Allow best/most popular athletes (accept professionals)

  • Commercialize the Olympics

  • Extend IOC to other competitions

  • Centralize Olympic marketing

  • Enter long-term partnerships with global sponsors

  • Professionalize marketing of broadcasting rights

  • IOC transformed into a revenue-maximizing transnational corporation (TNC).

What are the benefits and drawbacks of the IOC's commercialization?

• Benefits:

  • Global visibility and popularity of sports heavily increased

  • End of hypocritical amateurism

  • Olympic Games as only outlet and most important financial source for small IFs

  • Financial revenues generated for global sport development

• Drawbacks:

  • Goal conflicts within the Olympic movement: Marketing vs anti-doping, tradition vs popularity

  • Strong pressure on host cities to meet IOC's financial expectations

  • Increased resistance in democracies against financial burdens

  • Political exploitation by authoritarian regimes

  • Corruption within the Olympic movement

• Key point: Commercialization brought money and visibility but also created tensions between sport's ideals and business interests.

How is FIFA structured? What are its three roles?

• FIFA as rule maker: Defining the regulatory framework for global soccer.

• FIFA as rule enforcer: Sanctioning misconduct by excluding federations, clubs, and players from participation.

• FIFA as organizer: Owning and organizing the most important soccer competition (World Cup).

• Organizational architecture:

  • FIFA Congress: Annual assembly of FIFA members; changes governing statutes; approves annual report; decides on acceptance of new national associations; elects FIFA Executive.

  • FIFA Executive Committee and Presidency: True locations of power; main decision-making bodies.

  • FIFA members: National Football Associations (FAs); one FA = one vote; FAs must adhere to criteria for acceptance.

• Key point: FIFA is both a rule-maker, rule-enforcer, and event organizer – a rare combination of power in international sport.

What is the history of FIFA? How was it transformed into a commercial powerhouse?

• History:

  • 1904: Founded by European continental federations (France, Belgium, Denmark, Netherlands, Spain, Sweden, Switzerland).

  • Not much activity initially; tense relations with UK federations.

  • 1924: Organized Olympic Games football tournaments.

  • 1930: First World Cup in Uruguay.

  • 1934: Second World Cup in Italy, final broadcast live on radio.

  • Post-WWII: Rapid growth, lasting domination of European FAs.

• Transformation:

  • Decolonization created new key constituencies because of one nation = one vote principle.

  • New demands by FIFA members from developing countries.

  • Stronger stance against Apartheid.

  • More participation in tournaments and revenues = increase of distributional politics.

  • Transnational companies (adidas, Coca-Cola) interested in exploiting the commercial potential of the World Cup.

  • Joint coalition of new FIFA members and TNCs brought João Havelangeinto power in 1974.

• New governance coalition: United by interest to strengthen FIFA's commercial orientation; new presidency had to increase revenues: long-term business relationships with key sponsors, explore new commercial activities, secure FIFA's total control over revenue flows.

• FIFA transformed into a revenue-maximizing and redistributing TNC.

What is FIFA's web of power? What are the benefits and drawbacks of FIFA's governance?

• Web of power:

  • FIFA executive ↔ Strategic commercial partners: long-term deals, financial stability; partners influence FIFA decisions.

  • FIFA executive ↔ Member FAs: votes vs financial transfers, World Cup hosts and places.

  • FIFA executive ↔ World Cup hosts: uncompromised enforcement of FIFA's commercial interests.

• Benefits:

  • Financial stability of global soccer movement

  • Visibility of soccer in global media = increased popularity of soccer and FIFA (more members than UN)

  • Substantial development aid to member FAs – redistribution from key markets to developing countries

• Drawbacks:

  • Maximal exploitation of host countries

  • Distributional politics dominate FIFA's politics

  • Candidates for presidency have to offer financial promises

  • FIFA executive can "organize majorities" by offering revenues

  • "In formal terms FIFA is a democratic institution accountable to its members and to its congress. In reality, it was operated more like a fiefdom or a medieval court." (Sugden & Tomlinson, 1998)

  • Corruption due to underdeveloped accounting procedures

• Key point: FIFA's commercial success came at the cost of democratic accountability and integrity.

Why do athletes have economic power? What limits it? What is the superstar effect?

• Athletes' economic power:

  • "Prime athletic talent is scarce" (Scully, 1995) → low elasticity of supply.

  • Elasticity of supply = responsiveness of quantity supplied to changes in demand.

  • If supply is inelastic (limited talent), top athletes can enjoy monopoly rents.

• Limits to athletes' economic power:

  • Popularity of their sports

  • Career duration and further career prospects

  • Individual or collective character of sports

  • Capacity and willingness to carry the economic risk of organizing

• Superstar effect:

  • Sport represents a "superstar economy" – demand focuses on the most talented/successful athletes.

  • A few athletes concentrate most revenues → substantial interest heterogeneity among athletes.

• Key point: Top athletes are scarce and powerful, but their power is constrained by sport structures, career length, and organizational risks.

What gives organizers and teams economic power? What are their risks?

• Organizers (competition/event organizers):

  • Central to professional sport; provide event funding and pocket the profit.

  • Provide funding by risking own capital or through advance payments by spectators, sponsors, TV companies.

  • Profit if revenues (tickets, sponsoring, broadcasting) exceed advance payments.

  • Carry substantial economic risks.

  • Sources of power: general popularity of a sport, competition among organizers, brand character of a competition/event.

  • Brand character makes a competition distinct, creates consumer loyalty, is hard to copy, requires time.

• Teams/clubs:

  • Central to team sports; screen, select, bundle, and train athletic talent.

  • Provide athletes' salaries and funding for team management and training.

  • Profit if revenues (participation, team rights) exceed salaries and costs.

  • Carry substantial economic risks.

  • Sources of power: general popularity of a sport, competition among teams, ability to provide top athletes, brand character of a team (size of fan base).

• Key point: Both organizers and teams are powerful because they control brands and talent, but they also bear significant financial risks.

What is the interest constellation in professional tennis? How did the ATP revolution change governance?

• Players: Face excess demand for their services; long careers make collective action possible; interested in increasing their share, reasonable match calendar, long-term financial stability.

• Event organizers: Compete for appearances of top players; heavily dependent on players but owners of brands; carry main economic risk.

• Governing bodies: For a long time paralyzed by conflict about professionalization; benefitted from "shamateurism"; owned economic interests in certain tournaments.

• Industry structure:

  • After WWII: competition among amateur tournaments → "shamateurism" but continued player exploitation.

  • Professional tennis circuit in U.S. demonstrated athletic superiority of professional players.

  • Concerns about hypocrisy and decreasing attractiveness led to the "open era" in 1968.

  • Permanent interest conflicts between professional bodies (WCT, NTL), amateur body (ILTF), and player union (ATP).

• Institutional revolution:

  • ATP walked out of Men's International Professional Tennis Council (MIPTC) in 1989 and took over the professional tennis circuit – from player union to sport governing body.

  • Former amateur body ITF controls Grand Slams, Davis Cup, Fed Cup, Hopman Cup.

  • All other tournaments are sanctioned by ATP.

  • ATP mediates between players and organizers: categorizes tournaments based on revenue potential, requires top players to participate in a minimum number of tournaments to secure organizers' profits.

• Governance structure: ATP serves to balance the commercial interests of players and tournament organizers.

• Key point: Tennis shifted from amateur-controlled governance to player-controlled governance, balancing commercial interests.

What is the interest constellation in professional cycling? How did organizers reinforce their power?

• Riders: Limited market for talent; strong superstar effects.

• Race/tour organizers: Own and control decisive brands (Tour de France, classic races); regulate access to competitions according to economic concerns; carry economic risk.

• Teams: Select, bundle, train, and finance talent; carry economic risk for running teams.

• Sponsors: Central importance due to lack of ticket revenues; interested in maximum media coverage.

• UCI (Union Cycliste Internationale): Weak governing body struggling to become competition organizer.

• Reinforcement of organizer power:

  • Strong professional tradition; major competitions created by newspapers to increase visibility → became major brands attracting media/audience attention.

  • Administrations turned into professional organizers (e.g., Amaury Sport Organisation – ASO) organizing Tour de France and other races, imposing strict athletic quality standards.

• Attempt of UCI to become competition organizer:

  • Formed coalition with teams, offering guaranteed participation in a certain number of races (UCI Pro Tour) with lower requirements.

  • Top organizers sabotaged the plan by denying participation.

  • UCI had to compromise in 2011: UCI World Tour respects interests of top organizers.

• Governance structure: Serves mainly the commercial interests of tour and race organizers; strong pressure on teams and riders.

• Key point: In cycling, organizers (not the governing body) hold the power because they own the valuable brands.

What characterizes the governance of professional boxing? What are the consequences of fragmented governance?

• 
  Diffuse governance structure: No single governing body; multitude of sanctioning bodies.

  • Four major sanctioning bodies: WBC, WBO, IBF, WBA.

  • Different "world champions" for each weight class.

  • Best boxers rarely fight each other.

• Interest constellation:

  • Boxers: Limited market for talent; need for career investments.

  • Promoters: Organize bouts; due to minor role of sponsorship, invest their own capital; carry investments in boxers' market value; carry almost all economic risk.

  • Boxers' market value: Depends on rankings; evolves slowly, requires preparatory fights; with every fight, promoters risk losing previous investments → promoters try to avoid risky fights.

  • Sanctioning bodies: Make money by providing rankings and recognizing fights as championship bouts; dependent on and compete for promoters' demand for sanctioned fights.

  • Implication: Sanctioning bodies are most attractive for promoters if they provide unworthy contenders and allow risk-minimizing voluntary defenses.

  • "Often years can go by without having a champion defend his title against the No. 1 contender." (Tenorio, 2006)

• Governance structure: Serves mainly the commercial interests of promoters.

• Persistence of problematic governance:

  • Maintenance of fragmented industry governance is in the best business interest of promoters.

  • Unified governance would reduce their power and increase economic risks.

  • Serious detrimental effects: exploitative business practices, poor policing of health and doping stipulations, manipulation of sporting outcomes, corruption.

• Key point: Fragmented governance in boxing is not accidental – it benefits promoters but harms the sport's integrity.

What is the overall summary of the lecture?

• Governance of international sports is fragmented, diverse, and reflects very different constellations of power and economic interests.

• Legitimacy and ambivalent impact of commercialization:

  • Objective reasons: IOC needed financial sustainability for mega-events; FIFA needed democratically legitimated increase of revenues.

  • Upside: increased popularity, redistribution from developed to developing countries, from popular to less popular sports.

  • Downside: goal displacement – sport governing bodies become money-making machines; corruption.

• Key point: Commercialization has both positive and negative effects on sport governance. Understanding the power dynamics (who controls resources, who depends on whom) is essential to explain why governance structures look the way they do.