Risk

Risk

Assessing risk in sport - will Russia 2018 go ahead?

Professor Simon Chadwick

Posted: July 31, 2014

Tagged: events / legacy / management / risk

In recent days, there have been calls by Britain’s Deputy Prime Minister, Nick Clegg, for Russia to be stripped of the right to host the 2018 FIFA World Cup. Clegg has reportedly said that such action would be: “a very potent political and symbolic sanction”. Beyond this, there are security and safety concerns too.

http://www.bbc.co.uk/news/uk-28508509

At the same time, post-Brazil, some commentators have been contemplating the challenges potentially associated with hosting the World Cup in Russia. Among the issues identified, have been:

-Cost

-Legacy

-Racism

-Hooliganism

-Associated infrastructural developments

http://www.bbc.com/news/world-europe-28409784

Just in this one case of Russia and the 2018 World Cup, one begins to get a sense of the range and scope of the risks associated with sport.

To further illustrate issues of risk, below is the first of two posts (the first one early in 2014, the second later in the year) that were initially published as shortened, edited versions about risk in the ICSS Journal:

Two months into 2014 and one of the year’s biggest sporting mega events is already over – the Winter Olympic Games in Sochi. The $51 billion event has fuelled intense debate across a spectrum of issues from the costs, benefits and socio-economic impacts through to issues of gay rights, the control of civil protests and links to President Putin’s broader geo-political agenda.

Yet even at this general level there are innumerable lessons for sport and those managing within it. Some examples of these include notions of legacy and event bidding decisions; the monitoring and regulation of pressure groups and crowds; and the securing of sports venues against attack, both militarily and from commercial rivals.

Prior to the Sochi Games, security fears were heightened by two suicide bombings at the end of December in Volgograd. The attacks targeted the public transport network in the Southern Russian oblast, killing 34 people. This came only two months after a bus bombing in the same city.

As previous such attacks have shown, a nation’s transport infrastructure can be especially vulnerable, especially as security efforts are often be focused on protecting the premium sporting assets such as stadiums and athlete residences.

Given the large volume of footfall one often sees in places such as metro and railway stations, allied to the delays that closely monitoring and controlling the crowds can cause, securing transport infrastructure can be both complex and costly. Recent Russian experience nevertheless demonstrates how important this aspect of sporting mega-event management actually is.

We are now heading towards another important Winter Olympics decision – which city will win the bid to host the 2022 Games. Cities that have bid are Krakow in Poland, Oslo in Norway, Almaty in Kazakhstan, Lviv in Ukraine and Beijing in China. Stockholm withdrew its bid to host the games, citing lack of political support and general economic concerns.

This withdrawal came after both Oslo and Munich held referendums that allowed local people decide whether or not each city should bid to host the Winter Olympics. The former city’s population said ‘yes’, the latter’s ‘no’.

Democratically asking people for their views on an event hosting decision is an interesting step, which raises a series of issues around the governance of sport, most notably the extent to which democratic processes might underpin similar such decisions across sport. For instance, when public finance issues are likely to impose particular fiscal demands upon a city, we now appear to be witnessing the emergence of a crowd-sourced decision-making process.

The year’s other major sporting event – Brazil’s World Cup – continues to be beset by problems. Stadium construction issues were brought into sharp focus by the collapse of a crane at the Arena Corinthians, which killed two workers. Following last year’s riots during FIFA’s Confederations Cup tournament, further riots took place in January 2014 with almost 3000 people on the streets of Sao Paolo, 128 of them being detained by the police.

Alongside these incidents, Brazilian crime gang – the Primeiro Comando da Capital (in English, the First Command of the Capital), has threatened to bring a reign of terror during the World Cup. Adding to the already heady mix in Brazil, the country’s presidential election campaign begins in the middle of football’s premier international tournament.

Suffice to say that this summer promises to be a complicated one, both for the Brazilian authorities, and for FIFA. Stadium issues remain for the country, with some stadia still to be completed. The experience of Brazil holds some important lessons for event management, project planning and the importance of upholding strong standards of safety.

The latter issue similarly continues to attract attention from the world’s media and organisations such as Human Rights Watch as Qatar continues to grapple with the implications of its hosting the 2022 FIFA World Cup.

At the same time, the way in which popular and civil protestors have adopted the World Cup as a focal point for their actions highlights the challenges for event owners of monitoring threats, gathering intelligence and mitigating risks. In spite of the favela ‘cleansing’ process in which the Brazilian government has previously engaged, the PCC remains to pose a particularly interesting threat, both in terms of its extended network organisation form and its ability to perpetrate cyber-crime.

Two other recent stories are worthy of mention here as a footnote: one being the commercial deal agreed between English Premier League football club Arsenal; the other being the tragic skiing accident involving former F1 World Champion Michael Schumacher.

Arsenal’s deal with Huawei is a two-year agreement that sees the Chinese electronics corporation become the clubs official global smartphone provider. Given that Arsenal’s majority shareholder is American sports entrepreneur Stanley Kroenke, this is an interesting partnership choice.

The United States government has banned Huawei from bidding to to supply equipment to networks considered to be an important part of national infrastructure, and Australia and India have previously taken the same action. This means that the commercial deal between the Chinese company and Arsenal is locked into an arrangement that is potentially linked to an array of strategic, security and political issues.

Following a skiing accident in France at the turn of the last year, Michael Schumacher has been in a coma. While stories abound as to whether the former F1 star will emerge from his current state, the nature of Schumacher’s accident highlights some serious concerns about sports people, their security and risks to their financial/commercial worth.

Schumacher was thought be skiing ‘off-piste’, creating an element of personal danger many believe is what motivated the German to become one of the world’s leading racing drivers. There are echoes of Schumacher’s accident in what happened to fellow former F1 driver Robert Kubica several years ago. During an out of season rallying event, the Polish driver almost severed his hand and has not returned to F1 since.

As human resources that are acquired and remunerated by companies involved in sport, and as commercial entities in their own right, activities like skiing pose a constant threat to the economic security of athletes. While contracts will often prohibit such activities, some people argue that successful athletes are motivated by a sense of challenge. Hence, to prohibit them from engaging in dangerous pursuits this would therefore blunt the essence of who they are and what they do. This conundrum clearly poses some distinctive management challenges for the teams, commercial partners and other organisations with which athletes have a relationship.

 

 

 

About Professor Simon Chadwick

Professor Simon Chadwick set-up and edits The Scorecard. He is Director of CIBS (Centre for the International Business of Sport) at Coventry University, where he works as Professor of Sport Business Strategy and Marketing.  Simon tweets via Prof_Chadwick